Employers are calling for a tenfold increase in the maximum costs that can be awarded against people who take hopeless cases to employment tribunals.
The Birmingham Chamber of Commerce and Industry, which represents 5,000 employers in the Midlands, is writing to Trade and Industry Secretary Stephen Byers to ask him to raise the £500 limit to £5,000.
It also wants a change of attitude among tribunal chairs who rarely use their power to award costs to deter frivolous claims.
Head of personnel at Midland News Association John Harris said higher costs would be a good way to deter time-wasting cases.
“Now that the maximum limit for unfair dismissal has gone up to £50,000, a lot more people will chance their arm on taking companies to tribunal. But there is nothing in place in the employer’s favour to balance the system,” Harris said.
Colin Goodier, chair of the chamber’s working party and head of employment law at Pinsent Curtis, Birmingham, said costs are so low and so rarely awarded that they have no effect in deterring people from bringing hopeless cases.
Such cases can costs employers thousands of pounds to defend in preparation work, legal advice and the time of managers and directors who have to attend. “We want to get the message out there that going to tribunal is not a free run,” Goodier said.
Personnel Today revealed last month (16 May) that the Government is considering a shake-up that would force people with weak cases to pay a deposit or costs if they lose.
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A DTI spokesperson said the department recognises that £500 does not represent the real cost of taking a company to tribunal.
“We agree that there should be a higher amount of money,” she said. “We have not fixed a figure yet but £5,000 is within the range we are thinking about, albeit at the upper end.”
