30/09/2005

CBI report says employment tribunal system reforms fall short

A report from the CBI has found that despite reforms to the employment tribunal system, businesses are "losing confidence" as the system was falling short

The employers' organisation says companies are concerned about the complexity of the new procedures even though the number of tribunal cases had fallen since reforms were introduced.

While the system is supposed to provide cheap and effective resolution of workplace disputes, the CBI reported that many firms were settling cases they have a strong chance of winning because they fear the costs of going to tribunals.

CBI Deputy Director-General John Cridland 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."

Calling for a more consistent, common sense approach, Mr Cridland said claims should be judged on merit, "allowing deserving ones to be heard while striking out unscrupulous ones."

One year on from the reform of the system, the CBI report 'Restoring Faith In Employment Tribunals' found:
  • All firms with fewer than 50 staff settled every claim despite advice they would win almost half the cases;
  • Around a quarter of all firms settled even if they felt the claims lacked merit;
  • 45% of employers believed the system was ineffective and half reported a rise in weak and vexatious claims in the last year;
  • Three-quarters of firms encountered extra red tape because of the new reforms and one-quarter said the system was too costly;
  • Each claim costs a company £4,360 in legal fees;
The report also found that 55% of respondents said the tribunal system was "too adversarial" and a further 19% believed it damaged rather than helped employee relations.

The CBI said it believed changes to both the operation of the employment tribunal system and the statutory dispute resolution procedures were necessary to restore employer confidence in the system. Recommendations included requiring claimants to make it clear in writing they are lodging a grievance and a review of the redundancy procedures.

Commenting on the survey, TUC General Secretary Brendan Barber said employment tribunals were an "important last resort in resolving workplace disputes." and access to them should not be limited to those who can afford to pay.

"CBI proposals to introduce charges on individual's bringing claims and increase cost awards to employees would limit access to justice for genuine claimants and disadvantage lower paid workers," he said.

He denied that the tribunal system was clogged up with vexatious claims, and that while dispute resolution legislation was complicated, government planned a review in two years.

"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," said Mr Barber.

(SP/KMcA)

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