Tribunal Reforms: A Positive Move for Employers?

On 27th January 2011 the Department for Business, Innovation and Skills announced a number of fundamental reforms to employment law, with the aim of reducing the burden on companies of the present employment system and speed up the resolution of disputes. The proposals stem from a 56% increase in employment claims in 2010 from the previous year, up to 236,000 claims.

For smaller businesses in particular, it is suggested that the current system discourages the hiring of new staff for fear of resulting claims.

The proposals include extending the qualifying period to two years for unfair dismissal, requiring all claims to be lodged initially with ACAS so that they automatically go  hrough arbitration at a preliminary stage, handing more powers to Tribunals to enable them to deal with vexatious or weak claims and finally, the introduction of a ‘small’ fee for lodging a claim of between £30 - £500.

The question is whether the reforms will really have the effect of decreasing the amount of claims and lead to a more confident approach in recruitment? By extending the qualifying period to two years for unfair dismissal, employers can ‘trial’ their employees for much longer.

However whilst seemingly very positive for employers, it is expected that there will be a corresponding increase in spurious claims where employees have tried to argue the facts of their particular circumstances to fit within those causes of action which require no qualifying period, such as whistleblowing or discrimination. This is not in line with the objectives of the reforms and in many cases employers will expend more time and costs establishing that the claim does not fall within these parameters than they might otherwise have spent defending a straightforward unfair dismissal claim.

What we feel will be more effective from the perspective of reducing claims is the imposition of a fee to lodge a claim. Provided that this is set at the right level, this should help to prevent vexatious claims with questionable motives.

Kuits will be putting in a response to the consultation.

For further information contact Fiona Chadwick

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