New employment tribunal rules will save businesses £10m per year

As well as saving businesses direct net savings of more than £10m per year, the government estimates it will deliver wider benefits to employers worth more than £40m per year.

The changes, which aim to streamline employment tribunals and keep businesses out of the courts where possible, came into effect last Friday April 6.

The major reforms include:

  • The qualifying period for claiming unfair dismissal will rise from one to two year
  • Judges will be able to sit alone in unfair dismissal cases
  • Witness statements can be provided in writing as opposed to the current rules where a witness reads their own statement out aloud
  • The maximum level for costs awarded to businesses winning a vexatious tribunal claim will rise from £10,000 to £20,000.
  • Deposit orders required by claimants when a judge determines that a part of claim is unmerited will increase from £500 to £1,000.
Commenting on the reforms, Business Secretary Vince Cable, who is a keynote speaker at the Real Business Entrepreneurs’ Summit on June 13, says: “For too long now the system in place for employment tribunals has been a bloated and bureaucratic obstacle for employers and the taxpayer.

“Employers found that weak and vexatious cases were too much of the norm and too easy to bring forward, while for the taxpayer, they were proving ever more expensive to run.

“We have seen claims drop in the last year and we want to see this continue as we introduce alternative measures in the coming months helping both parties resolve workplace disputes.”

These improvements to the tribunal system form part of a package of measures designed to reduce the burden of regulation on business, which includes the commitment to introduce sector-based reviews to ensure that regulations are enforced in a way that results in the lowest possible cost to business.

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