Dispute Resolution Shake-up: What the Economy Needs

Business groups have welcomed measures outlined by business secretary Vince Cable this week to shake up dismissal and dispute resolution procedures and speed up employment tribunals.

Forum of Private Business (FPB) spokesman Robert Downes said that the plans, which include compulsory Acas involvement in disputes and a fast-track tribunal scheme for simple claims, “could be just the medicine the UK’s flagging economy needs for real growth in 2012.”

“Tribunals cost small business a fortune regardless of the outcome because of legal fees. So in financial terms, the new legislation would save a lot of small businesses hard-earned cash.”

However, the Chartered Institute of Personnel and Development said that some aspects of the proposals could lead to “unintended consequences”, and employee groups have accused the Government of eroding workers’ rights.

But the Government said its shake-up of dispute resolutions procedures will balance the needs of business with rights of employees. It will also take the pressure off an overworked employment tribunal system which has seen a 40 per cent increase in cases over the past three years.

Announcing the measures, business secretary Vince Cable said: “We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems, which is why we want disputes to be solved in other ways.”

The key measures announced were:

  • all disputes to go to Acas for pre-conciliation before entering the tribunal system from next year
  • an increase in the period after which employees can claim for unfair dismissal, from one to two years ― from April 2012
  • a consultation on “protected conversations” ― frank discussions between employers and employees which can’t be used as evidence in a tribunal
  • a consultation on a fast-track scheme for straightforward claims to ensure they are dealt with quickly and cheaply
  • a proposal to commission an independent review of existing tribunal procedures
  • a proposal to modify the formula for calculating tribunal awards and redundancy payments which will save small businesses £5.4 million a year.

Paul Kenny, general secretary of employee union GMB said the Government was tilting the balance in disputes too far in favour of employers. “These changes will make it harder for hundreds of thousands of workers to bring cases of victimisation, unfairness and bullying at work,” he said.

A Department for Business, Innovation and Skills spokesman responded:

“We’re not trying to stop people making tribunal claims ― if you have a serious and valid claim we’re not trying to stop you taking that to tribunal. We’re trying to make it easier to understand on both sides.”

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