Employment Tribunal Reform
You may have read in the news recently that the Coalition Government is proposing to make it more difficult for employees to issue proceedings in the Employment Tribunal. This is partly in response to the increasing number of Tribunal claims and the spiralling cost to employers of defending those claims, but the Government has also identified that in order to stimulate the economy and reduce the deficit, the private sector needs more flexibility when dealing with employment issues.
Whilst the Government is in consultation to see how it can improve the Tribunal system, two proposals have so far attracted the public attention. The first is the proposal to increase the qualifying period an employee must be employed for before they gain the right to claim unfair dismissal to two years. Currently, employees only need to be continuously employed for one year before they gain the right to bring a claim for unfair dismissal. This would reduce the number of people who would be eligible to lodge a claim in the Employment Tribunal and give the employer greater flexibility to dismiss without fear of Tribunal proceedings.
The second proposal is to introduce issue fees into the Employment Tribunal process. The Tribunal is currently a fee-free arena which means that claimants do not have pay to bring a claim (as is the case in the civil courts) and have very little fear of having an adverse costs order made against them if their claim is unsuccessful.
The key issue however is the need to strike a balance between providing wronged employees quick, easy and cheap access to justice, with the needs of employers, some of whom often face spurious or vexatious claims.
Unfortunately, many inexperienced employers find to their cost that it is all too easy for a disgruntled ex-employee to lodge a claim with very little merit in the Employment Tribunal and that they have little hope of recovering their costs. More often than not employers prefer to settle outside of the Tribunal to avoid the expense, wasted time and stress of defending proceedings, despite the claim having little merit or prospect of success.
However, this costs free environment could be considered to be an important feature of the Employment Tribunal system. Often employees who have been unfairly dismissed have limited means with which to fund litigation against their former employer. Introducing upfront issue fees may only serve to dissuade employees with genuine claims from taking their case to an Employment Tribunal for fear of excessive costs.
With strong arguments on both sides, it will be interesting to see what the outcome of the consultation is given the Government’s stated aim of supporting the private sector to allow it to grow and create new jobs.
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