Businesses believe tribunal system favours employees, survey finds

Only 3% of firms are satisfied with the current system whilst 97% of companies think the system is weighted in favour of workers, the survey by Pinsent Masons, the law firm behind OUT-LAW, said.

Pinsent Masons' survey received 109 responses from public and private sector organisations that employ more than 500,000 people in the UK combined.

The survey was conducted in order to provide a "comprehensive and robust response" to a consultation launched by the UK Government Department for Business, Innovation and Skills (BIS) and the Tribunals Service into improving the system for resolving workplace disputes, the Pinsent Masons report into the findings said.

The current dispute system hinders effective management of personnel, lasts too long and is inconsistent, the report said.

"66% of employers recognised that the fear of receiving a costly Tribunal claim impacted on their management decisions and the way they managed staff," the report said.

Tribunals should have more powers to weed out weak claims, the majority of respondents said, according to the report.

"81% of respondents reported having received a claim which they perceived as a 'try on', with 78% regularly receiving such claims," the Pinsent Masons survey report said. "Even allowing for the possibility that employers only see their side of the argument, this is still worryingly high."

The survey said 81% of respondents admitted to having settled weak claims because they deemed it cheaper than defending their case at a Tribunal.

Businesses are also concerned with the length of time it takes for the system to deal with claims, and the number of hearings that are cancelled at short notice, the report said.

"One possible solution is for more claims to be heard by a judge alone," the report said. "87% of respondents said that they supported the proposal in the [BIS and Tribunals Service] Consultation paper that simple unfair dismissal claims should be heard by a judge alone."

Employers believe that Tribunal rulings vary depending on where hearings take place, the report said.

"81% of respondents felt that Tribunals were inconsistent between the regions, with 58% believing they were inconsistent even in the same region," the survey report said.

Mediation delivered a better outcome than contesting a claim at a Tribunal, 82% of businesses that responded said, according to the report.

Most companies are in favour of a new measure being introduced to force disputing companies and employees to talk through issues before employees can make a claim, the survey said. 62% of respondents would like ACAS, the conciliation service, to be given the power to make recommendations following the pre-claim discussions, the report said.

"Increasingly we find that claimants are unrepresented and have unrealistic expectations of how much their claim is worth, fuelled by tabloid headlines about large awards to employees in the City," Jon Fisher, employment law expert at Pinsent Masons, said in the survey report.

"Guidance from ACAS that an offer is reasonable should help claims settle early and at the right level – particularly if there are costs consequences for claimants if they ignore the recommendation," Fisher said.

Government proposals to increase the period of service that workers need to have served before they can bring unfair dismissal proceedings against a firm to two years received 65% support from respondents, the Pinsent Masons survey report said. Only 16% of firms said that such an increase would encourage them to employ more staff, it said.

Proposals to charge a fee to bring a claim against an employer received 29% of support from respondents. Other deterrents, such as Tribunals being stricter in not hearing unmeritorious cases and being more willing to award costs against those bringing claims, were preferred by other respondents.

The Government announced proposed changes to existing employment laws in January and asked businesses to comment on its plans.

"Our survey shows that change is urgently needed to restore confidence in the system," Chris Booth, Head of Employment at Pinsent Masons said in the company's survey report. "We will continue to engage with BIS and the Tribunal Service over the reforms which we hope will result from this consultation."