Tribunal system is ‘broken’, says CIPD

Two-thirds of employers say that they have no effective protection against employees making unjustifiable claims to employment tribunals, according to research published today.

The Chartered Institute of Personnel and Development’s (CIPD) conflict management report surveyed employers’ experience of conflict management and collated the opinions of more than 200 senior CIPD members with employee relations interests.

Chris Mordue, partner at Pinsent Masons, says the current employment tribunal system is stacked against employers and reforms are needed.

The report found that 61% of respondents have experienced an employee claiming unfair dismissal and “tagging on” a discrimination claim in the hope of getting more compensation, while 55% have endured a complaint against their organisation on malicious grounds. More than half (52%) think that the law on unfair dismissal should be amended to make it easier for employers to dismiss members of staff.

Mike Emmott, employee relations adviser at the CIPD, claimed that the current tribunal system is “broken”, saying: “Despite many attempts in recent years to find a solution, the volume of tribunal claims has increased and employers believe they have no protection against weak or speculative claims.

“However, the survey findings also suggest that recent plans outlined by the Government – to increase the minimum period employees serve before they can claim unfair dismissal from 12 months to two years – will have only limited impact on the number of claims. This is because many claims are linked to discrimination claims which can be made from day one of employment.

“The real problem is that the employment tribunal system itself is broken and its costs and benefits are wholly out of line. The Government needs to take a radical look at the existing machinery for protecting employment rights.”

The survey also showed that employers have no faith in the current dispute resolution system. Seven employers in 10 (70%) use compromise agreements to avoid the risk of tribunal claims and more than half (52%) say that their use of compromise agreements has increased in the last two years.

Major reasons for using compromise agreements (other than to settle an existing claim) are: to remove an employee on grounds of poor performance or misconduct (39%); to avoid legal challenge in relation to redundancy (26%); and to make it easier to remove senior staff without embarrassment (24%). The median compensation payment under compromise agreements is £10,000, while one employer in five (20%) reports that the typical payment is £25,000 or more.

Since the CIPD’s last survey in 2007, the average number of days spent on managing disciplinary and grievance cases has gone up, from 13 to 18 days (disciplinary) and from nine to 14.4 days (grievance). The average number of days that management (excluding HR) spends on handling grievances is nine days in the public sector compared with 5.5 days in the private sector.

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