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Tribunal system reform

29 March 2011

In recent months, employers’ groups have been voluble in their efforts to persuade the government to create a better climate for employers by reforming the employment tribunal system. Willans considers some of the issues.

The current regime is often criticised for allowing employees to bring claims in a very casual manner. Many argue that this does not make for a level playing field between employer and employee when disputes arise, particularly when the absence of cost penalties for the losing side means there is nothing to deter employees from bringing dubious cases so lightly.

In cases where there is little chance of success, tribunals do sometimes order claimants to pay a deposit, by way of security for costs, but there are suggestions that this should be done more often and in larger amounts. Research by BIS (Department of Business, Innovation & Skills) shows that the average cost for employers to defend themselves at tribunal is £8,500 compared with an average settlement between employer and employee of £5,400.

There are mechanisms in place (eg striking out and costs awards) that allow tribunals to prevent misconceived and spurious claims from proceeding. Business groups argue that these do not have enough effect and the tribunal’s weakness in this area has led to a culture of ‘economic blackmail’.

There is much speculation as to what will emerge from the government’s review. Many believe the ‘solution’ will be some form of semi-mandatory alternative dispute resolution. Such a process would not be cost-free for either party and certainly not for the employer. In practice, a not dissimilar attempt in 2004 to produce a less formal dispute avoidance approach had the opposite effect and created an overly-legalistic and litigious workplace environment.

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