Defending a claim in the Employment Tribunal is an expensive business for an employer (£8,500 against an average settlement of £5,400: British Chambers of Commerce) but they seem to be increasing in popularity with disgruntled employees (latest figures show a 56% increase in 12 months: British Chambers of Commerce).
However, proposals to change the Employment Tribunal process have been announced which aim to reduce the number of claims and also streamline the “costly and time-consuming” procedures.
The plans announced include a proposal to introduce an issue fee of up to a possible £500 or even up to a week’s salary. There is also a possibility of increasing the qualifying period for an employee to be able to bring a claim for unfair dismissal from one year’s continuous service currently to two years under the new proposals.
The government’s main motivation behind these proposals is to prevent employees from bringing spurious claims in the hope of obtaining a favourable settlement from their ex-employer simply because they wish to avoid the nuisance and expense of defending these claims. Ministers also hope that these proposals will encourage growth by giving small employers more confidence to take on new staff.
There is also talk of an Employer’s charter to remind employer of their ability to manage poor performers and ultimately dismiss them, insist on annual leave being taken to suit the business and to remind employer that pay cuts be may be permissible in certain circumstances.
While these initiatives have been welcomed by business groups, unsurprisingly they have not been met with unanimous approval. Some trade unions have predicted that these reforms will not achieve the stated aim of encouraging growth, but will simply reduce job security for those looking for work in these troubled economic times, and give employers a free reign to dismiss new employees on a whim.
It is likely that there will be much lively debate before the final referrals are implemented. In the meantime, watch this space!