Time to put an end to the compensation culture

How do we solve the employment tribunal conundrum?

There is no dispute that there should be an accessible and responsive
employment tribunal system that allows aggrieved staff to bring employers to
task. But we also need to be rid of the damaging hoards of ‘gold diggers’ who
see the tribunal system as an easy way to fund a new kitchen.

The CBI estimates that employment tribunals currently cost business £663m
per year. And with Acas predicting that tribunal applications are set to rise
again, at least in the short-term, with a raft of new employment law about to
come on stream, it is time for the Government to act.

Its main weapon in trying to combat spiralling tribunal applications has
been the Employment Bill, due to become law in the coming year. These measures
include the expansion of internal grievance and disciplinary procedures, and
the introduction of a fixed-period conciliation process.

But many believe more needs to be done, and few agree with the Government’s
optimistic predictions that these measures will cut applications by 30 per

The Employment Tribunal Taskforce’s call for the Government to put more
focus on dispute prevention is a start. But while mediation will help, it will
not tame the compensation culture.

Despite laws being introduced last year allowing tribunal chairmen to charge
a deposit for weak claims to be taken forward and award costs against vexatious
claimants, anecdotal evidence suggests these powers are little used. Until they
are compensation-seeking staff will continue having a punt at the employers’

And whatever happened to the proposal of charging tribunal applicants £100
or so for lodging a complaint, as proposed in the Routes to Resolution
consultation paper? Everyone (except of course the unions) agreed this was a
way forward.

While the Government needs to take its lead from the taskforce and
strengthen the role of mediation in dispute resolution, it must have the
courage to tackle the compensation culture head on. The Employment Tribunal
System needs further reform.

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