Employment Tribunals – changes afoot or not!?!

Firstly, the Department of Trade and Industry indicated that employees would have to pay up to £100 for taking a case to an employment tribunal. The Institute of Directors and the Confederation of British Industry claimed that, without charges, the cost of the employment tribunal system would continue to soar. Ruth Lea, head of policy at the Institute of Directors, said: "We are very disappointed because there is no doubt that employment tribunal costs are one of the biggest nightmares employers face."John Cridland, deputy director general at the CBI, said employers were in favour of charges as part of measures to cut the number of disputes going to tribunals.

Then Trade Secretary Patricia Hewitt announced that the government were abandoning their plans in this direction. Bill Morris, general secretary of the TGWU, said: "I am delighted that the Government has removed the burden from the victims of unfair treatment at work." I see his point but does he know how difficulty it is for a small business to get costs and does he realise that not all claimants are ‘victims of unfair treatment’.

However, evidence of yet another U-turn.

The CBI’s John Cridland, hit the news again in September when he suggested that employers were losing confidence and patience with the employment tribunal system and want changes to make it simpler and fairer. Too many companies are settling cases they have a strong chance of winning because of costs and the feeling that tribunals are too sympathetic to "weak and vexatious" claims, the employers' body says. I can support this with evidence of my own.

Whilst the changes due next April are still under consultation and not yet finalized, it seems the major players are setting out their stalls.

A CBI-Pertemps employment trends survey shows that every business with fewer than 50 employees settled every claim despite advice that they would win almost half the cases. I do not think this is completely true but a majority certainly do.

The CBI wants more cost awards made against unsuccessful claimants, more consistency by the tribunals service in processing claims and charges for bringing claims to deter weak and nuisance cases.

A few days ago, Stephen O'Brien, the shadow trade secretary, said he believes the current arrangements are unfair because firms normally have to pay their own tribunal bills, even when they win. The press picked this up with the heading ‘Workers could be discouraged from claiming unfair dismissal under Tory plans to reform the employment tribunal system.

Apparently, the Tories will publish a policy document suggesting that it should be easier for employers to recover their costs from workers who failed to prove wrongful dismissal.(Do they really mean only ‘wrongful dismissal’ or is this a general term to cover unfair dismissal and other claims?)

Mr O'Brien wanted to change the law because the "blame and claim" culture of employment tribunals was damaging the competitiveness of British business. Alternatively, Labour accused him of "jumping on to a bandwagon" and said the Government has only just introduced new employment tribunal rules to reduce the burden of the system on business.

This is all in an environment in which Employment Tribunal applications have soared over the past 10 years. A recent CBI survey said 69 per cent of firms believed that the problem of "weak and vexatious" claims was getting worse.

A tribunal can order a worker who loses to pay the employer's costs if it believes he has acted unreasonably. But the Tories believe the law needs to be changed because this almost never happens. Losing parties only pay the costs of the winning side in one per cent of cases.

Two years ago the Institute of Directors published research showing firms that successfully defend a claim for unfair dismissal spend an average of £7,399 fighting their case. Afterwards, they almost always fail to get any of their money back.

What do you think?