In addition to the Employer’s Charter, unveiled this morning, the Department for Business is setting out measures to reform the employment tribunal system.

There is certainly good reason to do so.

Tribunal claims rose to 236,000 last year – a record figure and a rise of 56 per cent on 2009 – and businesses have to spend an average of £4,000 to defend themselves against each claim.

Concerns have been raised by UK plc that the system has become too costly, takes too much time, places unnecessary strains on small businesses and that it is too easy to make unmerited or vexatious claims.

“Disputes in the workplace cost time and money, can affect morale, reduce productivity and hold back businesses. We often hear that knife-edge decisions about whether to hire new staff can be swung by concerns about ending up in an employment tribunal if things don’t work out. Today’s proposals address these concerns and should help give employers more confidence,” says Vince Cable, the business secretary.

“But let’s be clear – resolving disputes earlier is also in the interests of workers. No one wants to spend month after month worrying about a claim – we need to make what can be an extremely stressful time in people’s lives as short as possible.”

The key proposals set out in a consultation published today are:

• Increasing the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years – this will ultimately help reduce the number of disputes that go to employment tribunals.
• Requirement that all claims be lodged with ACAS (the Advisory, Conciliation and Arbitration Service) before being filed with employment tribunals. This will allow parties to resolve disputes between themselves as early as possible, and encourage parties to make reasonable offers of settlement.
• Speeding up the tribunal process – extending the jurisdictions where judges sit alone to include unfair dismissal, introducing the use of legal officers to deal with certain case management functions and taking witness statements as read. This will result in employment tribunal resources being used more efficiently and allow cases to be listed and heard more quickly, saving time and cost.
• Tackling weak and vexatious claims – providing the employment tribunals with a range of more flexible case management powers so that weaker cases can be dealt with in a way that does not mean disproportionate costs for employers.
• Introducing fees for employment tribunal cases and appeals, to ensure that users contribute towards the cost of running the system.

“We’ve heard clear calls from users for reform to the employment tribunal system. It’s in everyone’s interests – employers, employees and taxpayers – to have a dispute resolution system that is efficient, simple to use and supports the employment relationship,” says justice secretary Ken Clarke.

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