Tribunal claims rose 56% last year to 236,000 last year, with each claim costing the company concerned an average of £4,000 to defend itself. The government has responded to employers’ concerns that the system has become too costly and lengthy and clogged up with unmerited or vexatious claims.
Prime minister David Cameron said: "A critical element of the government's growth strategy is to create the conditions which allow businesses, especially smaller businesses, to flourish and expand, by reducing regulation and maintaining a flexible and dynamic labour market.”
He added: “Giving businesses the confidence to take on somebody new will be a real boost to the economy, and help generate the sustainable growth we need."
Business secretary Vince Cable said: “Disputes in the workplace cost time and money, can affect morale, reduce productivity and hold back businesses. We often hear that knife-edge decisions about whether to hire new staff can be swung by concerns about ending up in an employment tribunal if things don’t work out. Today’s proposals address these concerns and should help give employers more confidence.”
“But let’s be clear – resolving disputes earlier is also in the interests of workers. No one wants to spend month after month worrying about a claim – we need to make what can be an extremely stressful time in people’s lives as short as possible. In the business world there is also a common misconception that employment protections are all one-way - towards the employee. The Charter we are publishing tackles this myth by setting out clearly some of the most important rights that employers already have in the workplace.”
The government said that it wants to enable workplace disputes to be resolved as early and as easily as possible. The key proposals are:
- Increasing the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years
- Encouraging parties to resolve disputes between themselves as early as possible– requiring all claims to be lodged with Acas (Advisory, Conciliation and Arbitration Service) in the first instance to allow pre-claim conciliation to be offered. This also includes introducing settlement offers to encourage parties to make reasonable offers of settlement to avoid Tribunal hearings and encouraging parties to consider other forms of early dispute resolution such as mediation;
- Speeding up the tribunal process – extending the jurisdictions wherejudges would sit alone to include unfair dismissal, introducing the use of legal officers to deal with certain case management functions and taking witness statements as read.
- Tackling weak and vexatious claims – providing the Employment Tribunals with a range of more flexible case management powers so that weaker cases can be dealt with in a way that does not mean disproportionate costs for employers.
The Ministry of Justice will consult separately on introducing fees for Employment Tribunal cases and appeals, to ensure that users contribute towards the cost of running the system.
Justice Secretary Kenneth Clarke said: "It's in everyone's interests - employers, employees and taxpayers - to have a dispute resolution system that is efficient, simple to use and supports the employment relationship.
"We have heard clear calls from users for reform to the Employment Tribunal system, particularly the need to ensure robust powers and procedures are in place to deal with claims more efficiently, more effectively and - importantly - more proportionately.”
The consultation document also includes proposals to:
- Increase the provision of information – aimed at reducing speculative claims, this would require more information on the nature of the claim being made and to include a statement of loss. It will help parties to decide whether to agree a settlement offer or proceed to a tribunal hearing;
- Withdraw the payment of expenses - encouraging parties to either settle earlier or reduce the number of witnesses they call; and,
- Introduce financial penalties for employers found to have breached rights – aimed at encouraging greater compliance from employers and thus a reduction in the number of tribunal cases.
Unite, the country’s biggest union, said the plans were “an opportunistic assault on UK employment rights”.
General secretary-designate Len McCluskey said: "The Tory-led government is taking us back in time to the days when your boss could say 'Get your coat your fired'. This is the clearest signal yet that working families are on their own under this government.
"It is utter nonsense to suggest that granting employers the power to sack workers on a whim will stimulate employment. It's equally wrong that the bulk of claims are vexatious. Plainly and simply, these proposals are a shameless, cynical attack on workers' rights which are already the poorest in the EU.
"Unite will fiercely oppose the government on this issue. Working people breathed a sigh of relief when Labour reduced the qualifying period for unfair dismissal, now workers are holding their breath."
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