Do Government proposals spell a turning of the tide for the Employment Tribunal System?

Friday 25th March 2011

Disputes in the workplace cost valuable time and money for the employer, employee and the Tribunal system itself.  They can affect morale, reduce productivity and ultimately undermine economic growth.  Whilst there are many instances of employers treating their staff unfairly, there are equally instances where disgruntled employees with no real claim threaten employers with the cost and inconvenience of an Employment Tribunal claim with the aim of securing a financial settlement.  Whilst neither situation is fair, systems do need to be in place to enable both sides to address genuine employment disputes.

The Government has started a consultation over ways to make the existing Tribunal system fairer and more efficient, and to discourage unethical or illegal practices and "nuisance" claims.  Part of this review looks at ways to encourage employers and employees to work together so they can resolve disagreements and avoid ending up in the Tribunal at all.

The proposals include:
•    Introducing fees for Tribunal claims and appeals;
•    Financial penalties for employers found to have breached rights;
•    Increasing the qualification period for unfair dismissal from one to two years;
•    Introducing costs penalties for employees who reject an offer to settle from their employer and then receive an award from the Tribunal which is less than the sum offered.
•    Giving Employment Judges stronger powers to strike out weak claims.

The consultation period ends in April, and the outcome is expected in the summer.  Employment law specialist at Ashfords Solicitors, Rhiain Lewis, considers this a step in the right direction.

Rhiain says: "If adopted, these proposals could go some way towards redressing the imbalance that has existed in recent years between employers and employees.  Employers will certainly welcome the measures proposed to remove weak claims in the system and the possibility of financial implications for Claimants who do not accept reasonable offers of settlement.  However, the risk of facing a fine, payable to the Exchequer, on top of compensation to the Claimant, if they breach employment rights is likely to concern employers.

"We can expect some debate over the proposal to raise the qualification period for unfair dismissal to two years.  The Government's rationale for this is to encourage growth by giving businesses more confidence when they consider taking people on. However it is debatable whether this measure would actually achieve this aim.  The Government is certainly likely to face the arguments raised in the 1990s when the qualification period last stood at two years that this discriminates against female employees."

Ashfords LLP is regulated by the Solicitors Regulation Authority.  The information in this note is intended to be general information about English law only and not comprehensive.  It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.