Changes to reduce number of employment tribunals

THE Government has announced two changes which it says will reduce the number of employment tribunal claims and encourage growth in the economy.

It says the reforms will lead to savings of £6 million and 2,000 fewer tribunal claims.

Rena Magdani, employment law partner at law firm Freeth Cartwright said: “From April 2012, the qualifying period of service for employees to bring an unfair dismissal claim will be increased from one year to two years. In addition, from April 2013, employees will, for the first time, have to pay a fee if they wish to bring a tribunal claim.

“The new proposals, which are part of a range of initiatives published earlier this year in the Government’s consultation “‘Resolving Workplace Disputes’, are intended to save businesses £6 million a year and lead to a reduction of 2,000 employment tribunal claims per year.”

“The increase in the qualifying period of service is intended to give businesses greater confidence to hire new staff, a move aimed at bolstering the economy and generating growth and is aimed at giving employers a longer period of time to assess an employee’s suitability for the job.”

Rena added: The introduction of fees is particularly welcome news for businesses. They should help to weed out claims, which are time consuming and costly for employers to defend and will bring the tribunal system into line with the family and civil courts. The level of the proposed fees has not yet been announced and will be subject to further consultation beginning in November 2011, although reports suggest that there may be an initial fee to lodge the claim and a further fee once the case has been listed for hearing.”

The CBI has described the new measures as a positive step, whilst, the unions have accused the Government of eroding workers’ rights for little economic gain.

Mrs Magdani continues: “Whilst the proposed increase in the qualifying period to bring an unfair dismissal claim is welcome news for employers, there is a risk that this will lead to an increase in employees bringing other tribunal claims such as discrimination and whistle blowing claims, which do not require a minimum qualifying period of service. Such claims are usually complex, time consuming, expensive to defend and have uncapped compensation, so the net effect may not be as substantial as anticipated in reducing the number of tribunal claims.”

“So, although the new legislation will benefit employers, there will still be a need for a high level of vigilance when handling employment matters to ensure that employers do not open themselves up to costly tribunal claims.”