25th March 2011
The Government is committed to reviewing employment legislation and the employment tribunal procedures, with a view to easing the “burden” on business, creating jobs and reducing the number of cases taken to tribunals. A consultation document was published in January and is available on the BIS website.
The consultation document suggests a number of ways in which more employment rights disputes could be resolved out of court, mainly by beefing up existing ACAS procedures. This will no doubt command support from both sides of industry.
It then becomes much more controversial. Three proposals in particular stand out and are already the subject of disagreement between business on the one hand and unions and advice agencies on the other.
The proposals are: to increase the qualifying period for unfair dismissal protection from one to two years; introducing a fee for making a claim at an employment tribunal; and making it easier for an employment tribunal to throw a case out without hearing it, or at an early stage during the proceedings.
There is no evidence that increasing the qualifying period for unfair dismissal or making it harder for people to pursue claims at employment tribunals would create jobs, as the Government claims. When the qualifying period for unfair dismissal was raised to two years by the previous Conservative Government, unemployment soared. When the Labour Government subsequently reduced it to one year unemployment dropped.
Employers’ claims that the number of employment tribunal cases is rising inexorably is disingenuous and misleading. The vast majority of the 236,000 cases taken in 2009 (the most recent official statistics) were multiple claims covering large groups of workers, often in disputes over equal pay or working time. The number of claims made by individual workers is still low. In 2009/10 there was a 90 per cent increase in multiple claims; single claims were up just 14 per cent on the previous year. Given the economic downturn this figure is modest.
In any case the main reason for claims going to employment tribunals is that employers do not have proper procedures in place to manage employees effectively, or simply treat their staff badly. Dismissal from a job is a very serious matter; the individual concerned will lose their livelihood, their economic and social status and struggle to find a new job if they cannot get a reference. If the Government is serious about improving matters they should focus on doing more to help employers manage their workforce fairly.
The TUC opposes any attempt to introduce a fee for claimants registering an employment tribunal claim. Such fees will prevent poorly paid workers and those who are unemployed as a result of dismissal from registering a claim, however meritorious the claim is.
There are already various procedures in place in the employment tribunal system that allow weak or genuinely vexatious cases to be weeded out at an early stage. Employment tribunals can require deposits from individuals taking cases and judges also regularly issue costs orders and strike out claims that they see as “vexatious or misconceived”. The employment tribunal system is based on the premise that employees should not be deterred from bringing cases through fear of large costs should they lose.
Employers appear to engage legal representatives, sometimes at a high level, for very straightforward claims which often involve factual rather than legal arguments. They are engaged at first instance, rather than after ACAS has attempted to conciliate claims. This over-use of lawyers means that employers are spending money unnecessarily, then arguing that it is cheaper to settle a claim even if they think it is spurious.
Currently the Government seems determined to press ahead with these changes; the TUC hopes that once they have examined the evidence presented during the consultation they will be persuaded that the changes would do little to improve employment relations and little to reduce employment tribunal claims.
Sarah Veale is Head, Equality and Employment Rights Department, TUC
