Employment tribunal reforms “to help small businesses in particular”

Proposed reforms to the employment tribunal system are designed to help small firms in particular, the Government has said, following the end of a consultation.

Key proposals in the consultation Charging Fees in Employment Tribunals and the Employment Appeal Tribunal (PDF) included issuing bills to employee claimants who currently get their say free. Businesses, who pay their own defence costs throughout, will continue to do so.

Tribunal claims have been rising fast for several years, although much of the increase comes from group (such as unions) claims. Employees on benefits will not have to pay a fee, but working claimants will have to contribute.

A Department for Business, Innovation and Skills (BIS) spokesman explained the changes were specifically aimed at helping small businesses.

“The measures will encourage the early resolution of disputes in the workplace, ensure the system is as simple and effective as possible for all users and give employers more confidence to hire new workers,”

said the spokesman.

“Our reforms are designed to help small firms in particular, which often don’t have the legal or HR resources to deal with workplace problems,” he added. “By extending the qualifying period to bring an unfair dismissal claim and by giving business longer to get the working relationship right, we are improving their confidence to take on new staff.”

“We have also announced our intention to introduce fees into employment tribunals as well as the Employment Appeal Tribunal. Currently, the taxpayer bears the entire £84 million cost per year of resolving other people’s employment disputes at tribunals. This is not sustainable.”

“We believe that people should pay a fair amount towards the cost of their case. Fee waivers will be available for people on low incomes to protect access to justice.”

The Institute of Directors (IoD) 2011 survey showed that 35% of its members have had a tribunal claim against them, but of those just 9% were won by the claimant, while 40% of cases were settled. “Too many litigants simply put in a tribunal claim because there is no cost to them, little downside and potentially much to be gained,” said an IoD spokesman. “For employers on the other hand, the potential cost and the time involved in dealing with a case, even one which is clearly vexatious, can be prohibitive.”

However, Trades Union Congress (TUC) head of employment rights Sarah Veale said:

“The introduction of tribunal fees will hit vulnerable and low-paid workers hardest. Given that tribunals already have powers to throw out vexatious claims, it is hard to see how these proposals will do anything other than price victims of injustice out of pursuing perfectly valid claims.”

The BIS spokesman said:

“Our proposed fees will encourage businesses and workers to settle problems earlier, through non-tribunal routes like conciliation or mediation and we want to give businesses, particularly small businesses, the confidence to create new jobs without fear of being dragged into unnecessary actions.”

Employment Tribunal Reforms “to help Small Businesses in particular”

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