Many of our clients have policies in place which set out clearly what their position is in relation to areas such as sick pay and medical appointments in working hours, and they all tend to contain the phrase “Any variation from this policy is entirely at management discretion”. They believe this statement helps them create a flexible working environment and gives them an opportunity to deal with situations on a case-by-case basis. This is true but it also leaves them very exposed to claims of discrimination.
In recent months, we have spoken with clients who have found themselves being accused of discrimination because they have treated individuals differently when it comes to areas, such as making up time for medical appointments or the approach they have taken to sick pay.
So, is it really possible to have HR policies which offer flexibility but prevent these types of claims of unfair treatment in the work place?
1. Why do you need to apply “Management Discretion”?
The first thing you ask yourself when considering applying management discretion is whether you need to.
If you are already expecting there to be a need for the policy to be altered in some situations then this could be a reflection of the fact that the policy isn’t really meeting the business need.
If this is the case, we suggest you take these quick steps:
- Take a look at the policy and think about the situations where you can see that it may be necessary to exercise “management discretion”;
- Consider whether the need for discretion is a common occurrence or infrequent;
- If applying management discretion is a common occurrence, update the wording of the policy to remove this need.
As an example, you may have a company policy in place which stipulates that you will not pay for any sickness taken in the first 12 months of employment other than at “management discretion”. It could be that the “management discretion” here is to deal with people who are seriously ill during this time and to whom you would like to be able to make some payment. You may therefore consider altering the wording to reflect that you will pay a set number of days sickness during the first 12 months if the absence is supported by a medical certificate. This way you are protecting the business from paying out for any Friday / Monday absence pattern but recognising that illness can strike at any time and you want to support your employees should this occur.
2. What if managers do need to use their discretion?
There is no way to have a policy in place which covers every eventuality and you may still find yourself in a situation where the right thing for your business and the employee is to take action which is outside of the prescribed policy.
In order to minimise the risk, make sure you put some safeguards in place:
- A single decision maker – have a single point of authority for final approval of any action that is outside of a stated policy. This way you should feel confident that similar situations will be treated in a similar way.
- Keep records – where you do make a decision to take action that is not aligned with a stated policy, make sure you keep records as to the exact situation and the reasons why you choose to act in the way you did.
- Be consistent – make sure that you exercise the same level of management discretion whenever a situation with similar circumstances arises, as it is this inconsistency that creates the potential for a discrimination claim. If you treat a male and female colleague differently in the same circumstances and you could find yourself in a difficult situation.
Our advice is to work ensure your policies avoid the need for management discretion where possible but where it is necessary, then be cautious, keep records and be consistent.