Plans to reform the tribunal system have been met with relief from employer
bodies. For them, the radical proposals hold the key to establishing effective
company grievance procedures and tackling the claims explosion. By Ben Willmott
Proposals announced by the DTI to reform the employment tribunal system have
received an enthusiastic welcome from employers.
The CIPD called the plans "a watershed" and the CBI, British
Chambers of Commerce and the Engineering Employers’ Federation have given
backing to the government initiative (News, 24 July).
Employment relations minister Alan Johnson, who announced the proposals,
believes they will promote conciliation in the workplace and put a brake on the
soaring number of employment tribunals.
Figures released by the Employment Tribunals Service show that applications
for employment tribunals have increased from 43,243 in 1990-91 to more than
130,000 last year. "More than three in five applications to tribunals come
from applicants who have not attempted to resolve the problem directly with
their employer first. Many of the disputes concerned could potentially have
been resolved before they reached the tribunal stage. They are often minor
disagreements that escalate," said Johnson.
The proposals published in a consultation document would give employment
tribunals the power to penalise employers and employees if they fail to use
internal grievance procedures as a first step in any rift.
The Government also wants to charge employees for making tribunal
applications, which they would get back if their claim was successful.
Peter Martin, director of employment for the EEF, whose members have
experienced a 50 per cent increase in the number of claims submitted since
1998, says the DTI’s plans will prove very helpful.
He told Personnel Today that the organisation’s lawyers had handled more
than 3,000 claims on behalf of employers last year, yet only 6 per cent of
cases were upheld.
"There is widespread concern among employers over the ever-increasing
number of employment tribunal cases. Government must act swiftly and firmly to
ensure that no claim proceeds to tribunal without proper attempts to resolve
the dispute first," said Martin.
The EEF would like to see greater emphasis on promoting Acas as a means of
resolving disputes, with additional resources being allocated to the
development of the service.
CBI deputy director general John Cridland is confident the DTI’s plans for
tribunal reform will help avoid unnecessary tribunal cases but not handicap
individuals who are pursuing legitimate grievances.
He does not think it unreasonable to charge employees before they are able
to use the tribunal system.
"There is plenty of evidence of the employment tribunal process getting
out of control. Given the record number of cases, the Government is right to
think radically about employment tribunal reform and better dispute resolution
"These are reasonable ideas which should reduce the continual spiral of
claims to employment tribunals without threatening anyone’s right to
justice," said Cridland.
The government review will create a more efficient employment tribunal
process and encourage better handling of disputes in the workplace, according
to the BCC.
David Lennan, BCC director general, claims the Government has responded to
the organisation’s calls for a system that allows employers and employees more
opportunities to resolve disagreements before the tribunal machinery is set in
"It is a ridiculous and costly way of resolving disputes when an
employer has to answer a complaint through a tribunal before having an
opportunity to discuss the dispute internally," said Lennan.
The CIPD described the DTI’s reform plans as a watershed in the Government’s
approach to resolving issues about employment rights.
Mike Emmott, CIPD employee relations adviser, feels the proposals will
enable workplace disputes to be tackled at an earlier stage and more flexibly.
"We share the Government’s belief that, where an employee is not happy
with the way in which they are being treated by the employer, the issue should
as far as possible be resolved in the workplace.
"We welcome the Government’s recognition that it is preferable to deal
with issues on a voluntary basis rather than have recourse to legal
enforcement. It cannot be right that in two-thirds of all complaints to
employment tribunals, the first an employer knows about it is when the tribunal
application is lodged."
But The Industrial Society and the TUC are both opposed to the tribunal
reform proposals, claiming that they would unfairly penalise workers.
"Charging tribunal applicants is not the way forward. It will
discriminate against low earners and ration justice to the better-off,"
said Patrick Burns, head of policy at The Industrial Society,
Burns is also unhappy that the Government has not increased funding for
Acas, which he says already has a proven record of conciliating cases before
they get to tribunal.
"A major expansion in Acas services would repay the Government’s
investment by curbing the employment tribunal explosion, while helping
employers install the kind of procedures that ensure problems don’t turn into
TUC general secretary Bill Morris commented, "Plans to charge employees
who seek to take cases to employment tribunals are yet another punitive attack
on workers seeking justice."
Road to reform: steps to shake up the system
– All organisations are to have dispute resolution procedures in place
– Claimants will be charged for use of the employment tribunal system
(exemptions for those on benefits and in cases of genuine need)
– Awards will be increased against employers and reduced for staff if either
party has not used internal grievance procedures
– Improvements will be made to the existing statutory requirements for
employers to provide a written statement of employment terms to employees
(currently businesses with fewer than 20 employees are exempt)
– There will be a limited extension to the time limit for lodging tribunal
claims where an internal disciplinary or grievance procedure is still in play –
in order to increase the chance of an early resolution
– A fixed period of conciliation will ensure both parties make every effort
to come to a settlement
– A limited amendment to unfair dismissal legislation will allow employment
tribunals to disregard minor procedural errors by employers, provided such
errors have made no difference in practice and the dismissal is otherwise fair
– A fast-track system will be introduced for certain jurisdictions (such as
unlawful pay deductions and breach of contract)
– Tribunals will be allowed the discretion to award wasted non legal costs
(such as a party’s overnight expenses) in circumstances where a party has acted
– Presidents of employment tribunals will issue practice directions to
achieve greater consistency throughout the country
A background paper on dispute resolution and employment tribunals is
available at www.dti.gov.uk/er/individual/et.htm
Responses must be returned to the DTI by 8 October
New laws designed to weed out weak claims in the employment tribunal system
came into force on 16 July. The maximum deposit which tribunals can impose as a
precondition of continuing a case where the tribunal believes a claimant has no
real chance of success has been increased from £150 to £500 and the award level
has been increased from £500 to £10,000
Feedback from the profession
Mike Taylor, group HR director for Lorne Stewart, welcomes most of
the proposals for tribunal reform but he thinks there should be more scope for
employers to recover their costs if they have been forced to defend a vexatious
"I think these proposals will help but I am disappointed that the
Government is not planning to introduce recovery of costs as a general
principle," he said.
Taylor is also opposed to plans to extend the time limit for lodging
tribunal claims when a company’s disciplinary procedure is still in play.
Philippa Harrison, HR manager for Britannia, wants the DTI to take an
even tougher line on employees who make tribunal applications without first
going through employers’ internal grievance procedures.
She explained, "If an employer has a proper procedure in place and the
employee is aware of that process but there is no attempt to resolve the issue
then the employee should not be allowed to go through the employment tribunal
Russell McCallion, HR director for London Luton Airport, is
optimistic that the reform package will reduce the burden on the tribunal
"I would be strongly in favour of most of the proposals contained in
the paper, especially those that encourage settlement of grievances at an
appropriate level and force parties to realise that application to tribunal
ought to be a last resort rather than a first resort, as often seems to be the
case under the current environment," he said.
Marie Cleary, HR manager for Poole Hospital NHS Trust, believes the
HR profession will have a major role to play if the DTI’s plans are to be successful.
"The changes present a clear message to organisations that competent
human resources policies, procedures, advice and expertise in managing such
conciliation needs to be available," she said.
The Employment Lawyers Association has highlighted a number of controversial
issues in the DTI’s proposals to reform the employment tribunal system.
Raymond Jeffers, chairman of the legislative and policy committee at the
ELA, believes the consultation paper is a positive document but he is concerned
about new rules concerning staff contracts and procedural errors.
He told Personnel Today, "One suggestion is that tribunals would be
able to make an additional award to reflect the absence of a written statement
of employment – that is, the statutory obligation upon employers to provide
"However, if the absence of written particulars was not to the
detriment of the employee, one might question why the employee should be
awarded compensation. Further, how do you value – in compensatory terms – the
absence of a written statement?"
Jeffers is also dubious about the plan to remove the Polkey rule which would
mean employers could still win unfair dismissal cases if they have made minor
procedural errors, providing the mistakes made would have made no difference.
He added, "Employees might query why employers are seemingly being
given a green light to ignore procedure. Also, this proposal seems somewhat
inconsistent with an earlier proposal in the consultation document which
promotes the use of disciplinary and grievance procedures."
Makbool Javaid, a partner with DLA, thinks that the proposal which would
have the biggest impact is the plan to allow tribunal presidents to issue
practice directions in order to achieve greater consistency throughout the
He said, "First, this will help introduce consistency throughout the
country and, second, it will give tribunal chairmen guidance about using the
powers they now have. It is all very well having the power, but if you don’t
use it then it is not going to get you very far."
Javaid is not sure that giving tribunals power to alter awards where
employers or employees have not used an internal grievance procedure will be
workable or fair.
Javaid explained, "The person the employee has the grievance against
could be well connected in the company and so they might feel they will not get
a fair hearing from the internal disciplinary procedure."