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Businesses believe tribunal system favours employees

81% of companies said claimants had 'tried it on'

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Almost all employers think the current Employment Tribunal system favours employees over businesses, a new survey has found.

Only 3 per cent of firms are satisfied with the current system while 97 per cent of companies think the system is weighted in favour of workers, the survey by law firm Pinsent Masons said.

Pinsent Masons' survey received 109 responses from public and private sector organisations that employ more than 500,000 people in the UK combined.

The survey was conducted in order to provide a "comprehensive and robust response" to a consultation launched by the UK Government Department for Business, Innovation and Skills (BIS) and the Tribunals Service into improving the system for resolving workplace disputes, the Pinsent Masons report into the findings said.

The current dispute system hinders effective management of personnel, lasts too long and is inconsistent, the report said.

"Sixty-six per cent of employers recognised that the fear of receiving a costly Tribunal claim impacted on their management decisions and the way they managed staff," the report said.

Tribunals should have more powers to weed out weak claims, the majority of respondents said, according to the report.

"Eighty-one per cent of respondents reported having received a claim which they perceived as a 'try-on', with 78 per cent regularly receiving such claims," the survey report said. "Even allowing for the possibility that employers only see their side of the argument, this is still worryingly high."

The survey said 81 per cent of respondents admitted to having settled weak claims because they deemed it cheaper than defending their case at a Tribunal.

Businesses are also concerned with the length of time it takes for the system to deal with claims, and the number of hearings that are cancelled at short notice, the report said.

"One possible solution is for more claims to be heard by a judge alone," the report said. "Eighty-seven per cent of respondents said that they supported the proposal in the [BIS and Tribunals Service] Consultation paper that simple unfair dismissal claims should be heard by a judge alone."

Employers believe that Employment Tribunal rulings vary depending on where hearings take place, the report said.

"Eighty-one per cent of respondents felt that Tribunals were inconsistent between the regions, with 58 per cent believing they were inconsistent even in the same region," the survey report said.

Mediation delivered a better outcome than contesting a claim at a Tribunal, 82 per cent of businesses that responded said, according to the report.

Most companies are in favour of a new measure being introduced to force disputing companies and employees to talk through issues before employees can make a claim, the survey said. Sixty-two per cent of respondents would like ACAS, the conciliation service, to be given the power to make recommendations following the pre-claim discussions, the report said.

"Increasingly we find that claimants are unrepresented and have unrealistic expectations of how much their claim is worth, fuelled by tabloid headlines about large awards to employees in the City," Jon Fisher, employment law expert at Pinsent Masons, said in the survey report.

"Guidance from ACAS that an offer is reasonable should help claims settle early and at the right level – particularly if there are costs consequences for claimants if they ignore the recommendation," Fisher said.

Government proposals to increase the period of service that workers need to have served before they can bring unfair dismissal proceedings against a firm to two years received 65 per cent support from respondents, the Pinsent Masons survey report said. Only 16 per cent of firms said that such an increase would encourage them to employ more staff, it said.

Proposals to charge a fee to bring a claim against an employer received 29 per cent of support from respondents. Other deterrents, such as Tribunals being stricter in not hearing cases that are not meritorious and being more willing to award costs against those bringing claims, were preferred by other respondents.

The government announced proposed changes to existing employment laws in January and asked businesses to comment on its plans.

"Our survey shows that change is urgently needed to restore confidence in the system," Chris Booth, Head of Employment at Pinsent Masons said in the company's survey report. "We will continue to engage with BIS and the Tribunal Service over the reforms which we hope will result from this consultation."

Copyright © 2011, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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