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Tribunal revamp won’t boost jobs, say employers

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Employment tribunal reform, which the Government claims will boost economic growth, will not create new jobs, say employers.

Proposals for sweeping reforms of the employment tribunal system include extending the unfair dismissal qualification period from one to two years. It is a move the Government believes will encourage economic growth by giving employers more confidence when they take on new people.

But a survey by law firm Pannone found that while 83% of employers broadly welcomed the proposal, only 17% said that it will encourage them to hire more employees than they would previously have.

The consultation, which will close on 20 April, was launched by the Department for Business, Innovation and Skills (BIS) and sets out a number of proposals to help speed up the often drawn-out tribunal system and reduce the cost to taxpayers.

Measures include plans to make all claimants engage in compulsory pre-claim conciliation. Three-quarters (74%) of employers believe this will reduce the number of claims, while 87% said they would want to be involved in pre-claim conciliation.

While the majority of the proposals attempt to make employment law more 'business friendly', plans to fine employers up to £5,000 if they lose a case will deter around half - or 48% - of employers from defending a tribunal.

The survey also found 85% welcomed the proposal to introduce a rule whereby either party can make a formal offer to settle a claim - backed up by penalties for failing to accept if it turns out to be a reasonable offer.

Some 87% said that if they knew the value of a claim at an early stage, it would make them more likely to consider a settlement.

Jim Lister, head of employment at Pannone, said: "It is clear that employers welcome the planned reforms, which they hope will encourage early settlements and stamp out weak claims.

"But it appears they also believe that while the UK economy continues to languish in the doldrums, the Government is naïve if it believes an extension of the unfair dismissal period will lead to more job creation."

Pannone surveyed 122 UK HR directors online last week.