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How Will Employment Tribunal Changes Affect You?

Chancellor George Osborne has confirmed that the Government intends to implement some major changes to the process in which an employee launches claims against his employer through an employment tribunal. By doing so, Mr Osborne argues that British businesses will be saved an annual bill of around £6 million by lessening the number of cases that can add up to around 2000 per year. However, employee groups are seeing this as yet another nail in the coffin for employees’ rights. How will these changes affect the ordinary, working man or woman?

Tribunal Claims

In the first of the changes, the government is doubling the qualifying period in which an employee can be employed before they can launch a tribunal claim. Currently, an employee need only have been employed for one year before they are able to do so. But from April 1st 2012, this will become two years. Business owners welcome this as it makes it ‘less risky’ to hire new people, given that they will find it easier to make them redundant if they are found to be under-performing. However, employee groups believe that this system will be open to abuse by unscrupulous employers and a significant number of unfair dismissal cases will now go unreported. Dr John Philpott, Chief Economic Advisor at the Chartered Institute of Personnel and Development, warns that: “While less job protection encourages increased hiring during economic recoveries, it also results in increased firing during downturns.”

Tribunal Fees

The second change is the introduction of a fee to take an employer to trial. Although no decision has as yet been reached as to exactly how much an employee will have to pay to undertake a tribunal hearing, it has been suggested that it will cost £250 to file a claim, with a further £1000 incurred when the matter is listed for hearing. Claims in excess of £30,000 may well incur higher fees. While businesses are likely to applaud this system as it could significantly reduce the number of unfair dismissal claims seen each year. Sceptics argue that claims of this sort counted only for around 15% of employment tribunal cases seen between 2010 and 2011, and inclusion of the fee is a serious erosion of employees’ rights.

However, for employers taken to tribunal, the changes will not make much difference, so it is still in their best interests to avoid tribunal action at all costs. The Government has said that it wants to increase the possibilities for non-legal resolution between employees and employers, and that this particular change is aimed at doing just that.

July 2004 saw employers raising their hands in horror as the Government introduced additional compensatory awards for hard-to-define matters such as stress, injury to feelings and personal humiliation. It seems that the pendulum is now swinging firmly in their favour, although the onus seems to be more on positive resolution outside the tribunal, rather than complete abolition of employees’ rights. While it will no doubt be harder for employees with genuine grievances to launch cases, substantial sums will be saved from no longer having to deal with cases that would otherwise be ‘thrown out’.

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