PROPOSED reforms to employment tribunals are flawed and will not help businesses, the Institute of Directors (IoD) said today.
The IoD is calling on the coalition government to bolster its plans in order to protect companies from costly, spurious claims.
“Being timid will get us nowhere,” said IoD director-general Miles Templeman. “Employment tribunals need radical reform.”
Tribunals should have stronger powers to “strike out” spurious claims early in procedures, Templeman said, responding to the government’s Resolving Workplace Disputes consultation.
The IoD reported that over a third – 35 per cent – of its members have had a tribunal claim against them, yet just nine per cent of cases were won by the claimant.
In 40 per cent of cases the claim was settled without a tribunal ruling.
“Very often employers will choose to settle rather than face the time, expense and stress involved in defending a claim at tribunal,” the CBI said.
“If someone has made multiple claims against different employers in the past, a tribunal should be able to see this,” added Michelle Chance of London law firm Kingsley Napley.
“Some people actually make a profession launching spurious claims,” she told City A.M.
Claimants should have to pay deposits when launching a case, the CBI said. Yet Chance disagreed: “This could be a barrier to people with genuine claims who can’t afford to bring them to trial,” she said.
“Instead, there should be a mechanism whereby claimants have to pay the defendants’ costs if the trial results in a settlement lower than a pre-trial offer.”
Such a system would deter spurious claims that harm businesses, Chance explained.