Tribunals to be shaken up in "most radical reform of employment law for decades"

Tribunals will be overhauled as part of “the most radical reform to the employment law system for decades”, Business Secretary Vince Cable has announced.

The package of measures include a Ministry of Justice consultation on introducing fees for people wanting to bring a claim in the Employment Tribunal.

This consultation will analyse two options. The first would see payment of an initial fee to lodge a claim, and a second fee to take that claim to hearing. The second option would introduce a £30,000 threshold, so those seeking an award above this level would pay more to bring a claim.

Mr Justice Underhill has meanwhile been appointed to lead an independent review of the existing rules of procedure governing employment tribunals. “This review will look to address concerns that they have become increasingly complex and inefficient over time and are no longer fit for purpose," the Department for Business, Innovation and Skills said.

Other elements of the reforms include:

• A call for evidence on proposals to introduce the controversial “compensated no fault dismissal" for micro firms with fewer than ten employees
• A call for evidence on ways to slim down and simplify existing dismissal processes “including potentially working with the Advisory, Conciliation and Arbitration Service (Acas) to make changes to their Code, or supplementary guidance for small businesses.”
• A call for evidence on whether the 90-day minimum consultation period for collective redundancies should be reduced
• A call for evidence on proposals to simplify the Transfer of Undertakings (Protection of Employment) - TUPE – rules
• The merger, simplification or scrapping of more than 70 of the 159 regulations subjected to the recent employment law Red Tape Challenge
• Closure of a whistleblowing case law “loophole” that allows employees to blow the whistle about their own personal work contract
• Merger of 17 National Minimum Wage regulations into one set
• Consultation on streamlining the current regulatory regime for the recruitment sector
• Creation of a universally portable CRB check that can be viewed by employers instantly online, from early 2013.

DBIS has also announced that – as part of the response to the Resolving Workplace Disputes consultation – the government was committed to:

• All employment disputes having to go to Acas to be offered pre-claim conciliation before going to a tribunal
• From April 2012, increasing the qualification period for unfair dismissal from one to two year
• Publishing a consultation in the new year on ‘protected conversations’. These would allow employers “to discuss issues like retirement or poor performance in an open manner with staff – without this being used in any subsequent tribunal claims"
• Further consultation on measures to simplify compromise agreements, which will be renamed ‘settlement agreements’
• Announcing plans to consider “how and whether to develop a ‘rapid resolution’ scheme which will offer a quicker and cheaper alternative to determination at an employment tribunal”
• Modifying the formulae for up-rating employment tribunal awards and statutory redundancy payments to round to the nearest pound.

The Department also pointed out that from April 2012 witness statements would be taken as read, expenses will be withdrawn for witnesses and judges would sit alone for unfair dismissal claims.

The maximum level for cost awards to businesses in winning a vexatious tribunal claim is meanwhile to rise from £10,000 to £20,000. Deposit order amounts for claimants, when a judge determines that a part of claim in unmerited, will also rise from £500 to £1,000.

In a speech to manufacturers' organisation EEF, Cable said: “Our labour market is already one of the most flexible in the world. This flexibility benefits businesses, staff and the wider economy. But many employers still feel that employment law is a barrier to growing their business.

“We’re knocking down that barrier today - getting the state out of the way, making it easier for businesses to take on staff and improving the process for when staff have to be let go."

Cable insisted that the government was not re-balancing employment law simply in the direction of employers.

"Our proposals strike an appropriate balance and we are keeping the necessary protections already in place to protect employees," he claimed. "Our proposals are not - emphatically not – an attempt to give businesses an easy ride at the expense of their staff. Nor have we made a cynical choice to favour flexibility over fairness.

“We know that disputes at work cost time and money, reduce productivity and can distract employers from the day-to-day running of their business. Tribunals should be a last resort for workplace problems which is why we want disputes to be solved in other ways.”

Some of the government’s proposed changes will require the introduction of primary legislation, subject to the Parliamentary timetable.

Philip Hoult