There must be something wrong with the law when it is cheaper and easier to say that you are guilty even when you are not. The reformed employment tribunal system still offers little comfort to businesses that have rightfully dismissed employees. Businesses are losing confidence in the system and are settling out of court even when they have a watertight case.
A new report from the CBI reveals companies are very concerned about the complexity of the new procedures even though the number of tribunal cases has fallen since the reforms were introduced last October.
The FSB believes that the number of tribunals is falling because more and more employers are giving in and settling rather than going through the expensive and time-consuming business of a court hearing (see previous article in Knowledgebase).
John Cridland, Deputy Director-General of the CBI, said, "The new tribunals procedures are falling short. They may be having an impact on absolute numbers but are unnecessarily complicated and run the risk of undermining business confidence. The number one priority for any review must be making the regulations more user-friendly.
"Tribunals, across the country, also need to adopt a more consistent, common sense approach. They must properly judge claims on their merit, allowing deserving ones to be heard while striking out unscrupulous ones".
The worrying picture emerges in the CBI report 'Restoring Faith In Employment Tribunals' which marks the first anniversary of reforms aimed at resolving grievances in the workplace rather than at tribunal. It found that:
- 100% of firms with fewer than 50 staff settled every claim despite advice they would win almost half the cases, and 26% of all firms settled even if they felt the claims lacked merit.
- 45% of employers believe the system is ineffective and 50% reported a rise in weak and vexatious claims in the last 12 months despite the reforms.
- 76% have encountered extra red tape because of the new reforms and 26% said the overall system is too costly - each claim costs a business £4,360 alone in legal fees, on average, on top of management time and stress.
- 55% say the tribunal system has become too adversarial. A further 19% believe it damages rather than helps employee relations.
The CBI believes changes to both the operation of the employment tribunal system and the statutory dispute resolution procedures are necessary to restore employer confidence in the system - and has a series of recommendations.
Claimants should be required to make it clear in writing they are lodging a grievance so employers know they have to begin the appropriate procedures. The CBI also recommends that the Government reviews the procedures in relation to redundancies. Since October this has been causing employers significant headaches.
Tribunals must make full use of their powers to dismiss weak and vexatious claims and for the process of dispute resolution to be speeded up (as was intended by the reforms). And tribunal chairmen must take a common-sense approach to the new procedures and concentrate on the substance and merit of cases - not overly focus on the technicalities of process.
Costs in weak and vexatious cases should be awarded against losing complainants to deter unscrupulous litigants. This happened in fewer than 1% of all cases last year and only half of all complainants were aware it could happen - notably 41% withdrew their claim when it was pointed out.
There also needs to be greater regional consistency with businesses reporting different practices in different parts of the country. A charge for going to a tribunal, set at an appropriate level to ensure people have access to justice, should be introduced to deter weak or vexatious claims, the CBI says.
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