British firms are losing faith in employment tribunals because reforms brought in last year are too complex, according to a report by the CBI. The employers’ organisation called for the rules to be made more user-friendly.
The report marks the first anniversary of reforms that changed workplace dispute resolution practices and the Employment Tribunal's rules of procedure. It confirms that the number of tribunal cases has fallen since the new rules came into effect; but the CBI does not see this as proof of success.
"The new tribunals procedures are falling short," said John Cridland, Deputy Director-General of the CBI. "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."
Cridland argued that tribunals need to adopt a more consistent, common sense approach. "They must properly judge claims on their merit," he said, "allowing deserving ones to be heard while striking out unscrupulous ones."
The system is supposed to provide cheap and effective resolution of workplace disputes. But according to the 450 respondents to the CBI/Pertemps Employment Trends Survey 2005, every single firm with less than 50 staff said that they settled every claim despite advice they would win almost half the cases. Twenty-six percent of all firms settled even if they felt the claims lacked merit.
This demonstrates a clear lack of confidence in the current system, says the CBI.
Forty-five percent 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. Fifty-five percent said the tribunal system has become too adversarial, while a further 19% believe it damages rather than helps employee relations.
On top of this, 76% of respondents said they 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 in legal fees, on average, on top of management time and stress, says the CBI.
The CBI argues that changes to the employment tribunal system and the statutory dispute resolution procedures are necessary to restore employer confidence in the system.
It recommends that claimants should be required to make it clear in writing that they are lodging a grievance so employers know they have to begin the appropriate procedures.
Tribunals must make full use of their powers to dismiss weak and vexatious claims and to speed up the process of dispute resolution, while 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.
The CBI also wants costs in weak and vexatious cases to be awarded against losing complainants to deter unscrupulous litigants. It says there should also 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, it says.
The Government is to review the changes next year.
TUC General Secretary Brendan Barber told the BBC, "The CBI should not pre-empt the outcomes of this review before in-depth research has been conducted on how the procedures are operating in practice."
"The suggestion that the tribunal system is clogged up with vexatious claims is ill-founded," he added.
