Most recently, business secretary, Vince Cable, has set out proposals designed to address the widespread compensation culture by proposing changes to the unfair dismissal claims system. This includes proposals to streamline the Employment Tribunal system.
Such proposals are all well and good, but only time will tell if they have the desired effect. Introducing change is the first step, but if this isn't capitalised on through effective implementation and communication, nothing much will alter.
It's hoped that Government proposals to reduce the cap on claims to just one year's salary and introduce so-called 'settlement agreements' should go some way to help re-balance the unfair dismissal claims system, which is often perceived as being skewed in favour of the employee.
At present, the system permits a disgruntled employee who has lost their job the right to pursue a compensation claim against their former employer, which could be worth anything up to £72,300, without incurring any personal costs. Many employers feel that this creates too much incentive for employees to bring claims and encourages vexatious or spurious claims.
Among the measures put forward by Government is a proposed reduction of the current cap on claims. This could help to prompt discussion between employers and employees, encouraging them to resolve performance-related issues and potentially reduce the incidence of workplace disputes. 'Settlement agreements' are potentially more problematic and could lead to a costly cheque book culture when managing the exits of key members of staff. Employers should therefore be reminded that they have the right to address performance issues openly and directly with members of staff and to make dismissals where necessary.
One of the most significant changes is likely to be the introduction of Employment Tribunal fees, which are due to take effect in summer 2013. As part of the changes, employees who decide to bring a claim against their employer will be required to pay £250 up front and a further £1000 if a hearing is granted. The money will be refunded to them if their claim is later upheld. Although those on lower incomes will still be eligible for assistance, overall, the new structure will ensure that only the most complex or well-evidenced claims will reach the Tribunal stage. This is a sensible measure which will deter time-wasters and opportunists while, importantly, ensuring access to justice is protected.
The earlier resolution of less serious or more spurious claims will allow individuals to get on with their lives and employers to get on with doing business. The cost of the Advisory, Conciliation and Arbitration Service (ACAS) which provides a complimentary service to help staff and their employers settle disputes before the prospect of a Tribunal arises, will continue to be borne by the taxpayer.
Whatever happens, it is vital that the Employment Tribunal system remains accessible to all those seeking justice but this must be balanced against the needs of business. Relieving some of the pressure on the current system will also help to improve efficiency and this is in everyone's interests. For the moment, however, these are just proposals and only time will tell if they will create a tribunal system that is more robust and user-friendly for all.
Paula Whelan (pictured) is an employment law partner at law firm Shakespeares
