FIRMS WELCOME TRIBUNAL REFORM

THE GOVERNMENT will today unveil sweeping reforms to employment tribunals, in a bid to clamp down on spurious claims and rebalance the system in favour of businesses.

Vince Cable, the business secretary, is expected to announce that firms will be able to sack workers during the first two years of employment without being taken to a tribunal for unfair dismissal.

Currently, employees are able to bring an unfair dismissal claim after just one year in the job.

The government will also launch a consultation on charging employees fees for tribunal cases, in a bid to deter them from making claims that are unlikely to succeed.

Currently, workers can take their employer to tribunal without incurring any costs, meaning they have nothing to lose by bringing an unfair dismissal claim – even if their case is unsuccessful. And all claims will be lodged with conciliation service Acas, which could help prevent a large number of claims from actually reaching tribunal and reduce costs for businesses.

A raft of smaller changes will also be introduced, in a bid to simplify the process and make it less costly for firms.

Employers and witnesses will be able to submit written evidence to tribunals rather than attending in person, meaning fewer business hours are lost, while claims will be heard by a single judge instead of two.

Prime Minister David Cameron is hoping the reforms will encourage private sector firms to employ thousands more staff, helping to soften the blow of public sector job cuts.

A Whitehall source said: “We want to give businesses, especially smaller businesses that are critical to the recovery, the conditions and confidence to grow by reducing regulation and ensuring a balance of rights between the employer and the employee.”

Employers have long said the tribunal system is skewed in favour of workers. Claims rose to 236,000 last year – a record figure and a rise of 56 per cent on 2009 – and firms have to spend £4,000 on average to defend themselves. Most firms decide to settle cases, even if they believe the claim has little or no merit, because the cost of fighting – or losing the claim – is much greater.

Cameron is hoping the reforms will counter suggestions the government is thwarting economic growth by pursuing policies that are costly for firms, such as the abolition of the default retirement age and new paternity rights. The government will unveil the plans alongside a new “employers’ charter”, which will outline the rights of firms over their workers.