Further speculation has arisen this week that employment tribunal practice is to be reformed by the Government, following up on its post- Election pledge to “review employment and workplace laws to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive.” Options the Government is rumoured to be considering include the introduction of a fee system for the commencement of employment tribunal claims or, more potentially controversially, an increase in the qualifying period for bring an unfair dismissal claim, from the current one year period to two years. Martin Warren, Head of Employment law at International Law Firm Eversheds, comments:
“Reducing the number of claims which actually get to tribunal has been a long held aim of successive governments, the costs and administrative burden for employers and a stretched tribunal system being considerable. Some of the recent suggestions for reform have been mooted in previous reviews of the system but not pursued. However, with tribunal statistics for the last year once more revealing higher than ever numbers of claims – up 56% on the previous year, one can understand why the Government is wanting to explore a tightening up of the tribunal system. We tried compulsory discipline and grievance procedures a few years ago, with a view to deterring claims prior to reaching tribunal, but this proved cumbersome for everyone concerned and did nothing to reduce the number of claims.
“An employers’ poll conducted by Eversheds LLP earlier this year revealed that a third of respondents saw tribunal procedures and unfair dismissal practice as their primary areas for change. With a high percentage of claims being withdrawn following commencement in the tribunal (approximately 33%) and a relatively low median award in unfair dismissal claims, it seems likely that an increasing number of employers may be taking things in to their own hands and deciding to settle cases rather than defend claims through the tribunal system with little hope of recovering their costs, whatever the outcome. Amicable resolution of disputes through sensible discussion is clearly to be welcomed but undue pressure on businesses to settle even unmeritorious claims is not. The Government will need to tread a careful path if it is to address the latter whilst ensuring opportunity for legitimate claims.”
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