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?

Pregnant Employees

In both my commercial work and voluntary work with the Citizen’s Advice Bureau, I have seen a disturbing increase in cases involving pregnant employees. These include forced resignations, imposition of detriments, failure to follow health and safety requirements and a general reluctance to follow correct procedures. I ask myself, is there a general increase in similar complaints? Is it an indirect result of the difficult trading environment?

Of course, I understand that pregnant worker can cause the small firm problems in areas such as continuity and temporary cover. These are issues that a large organisation takes in its stride.

This said, the law is quite clear and, whether you like it or not, must to be followed. There are few circumstances in which an employer can dismiss a pregnant employee with impunity.

I may be wrong, but I get the feeling that many employers know what should be done but take a risk – maybe hoping that the lady will work away, content with her new bundle, and never return. However, any are finding to their cost that this is not the case. What are your experiences?

Finally, if you are in this situation seek advice before you take action not afterwards.

Employment Updates

There are a couple of up-dates to report.

1. In May 2008 the Government announced they would be extending the right to request flexible working to those employees with parental responsibility for children aged 16 and under. You may be aware that the right currently exists in respect of children under 6 and children with a disability under 18. Apparently, this proposal, strongly challenged by employers associations, has been shelved due to the 'credit crunch'.

2. The default retirement age of 65 has been subject to challenge from an off-shoot of Age Concern called 'Heyday'. The case is with the European Court of Justice. Many readers with increasing mortgages and reducing pensions may welcome such a move. However, the Advocate-General, a legal adviser to the ECJ, has rejected the claim in support of the Government position. It may change but I am not confident.

The Risks of Redundancy

I have had several clients asking about redundancies, which is good. What is not so good is that other clients have told me that they have already made staff redundant. Beware, you could be setting yourself up for a series of claims!
Employment tribunals seldom challenge the business case for a redundancy. In the current environment the reasons are often patently obvious.
Where the claims can arise is in the area of selection or using a redundancy situation to get rid of that awkward character you have been trying to shift for years.
Selection of staff to reduce numbers of those on similar jobs needs to be by an agreed selection process against reasonable criteria. If in doubt get in touch.