The Employment Tribunal system is failing employers and employees. This at least is the view taken by the CBI in its submission to the Government's consultation on Employment Tribunal reform. It argues that a 173% rise in the number of claims over the last five years has put a significant strain on UK businesses and has led to an unacceptable backlog for employees with legitimate complaints who are faced with excessive delay and stress in navigating the system. The CBI criticises the current system as being "remote, slow, legalistic and costly" and calls for more to be done to weed out weak or vexatious claims and encourage settlement at an earlier stage.
Encouraging early settlement
A key concern is tackling the problem of employees who submit weak or vexatious claims simply to provoke their employer into settling rather than pay the costs of defending their position at Tribunal. The CBI notes that the legal fees and management time involved in defending claims means that many employers, even those who are likely to win if the case proceeds to a hearing, would still rather pay to rid themselves of a claim at an early state.
Many employees read about the six figures compensation sums won by City employees in high profile cases, and may be left with the misconception that they too are entitled to similar awards. In fact, the average award for unfair dismissal cases in 2009/10 was approximately £9,000 and the median award £6,275. The CBI believes that publishing such statistics on claim forms, together with information on the average waiting time and length of hearings, could discourage the "claim first, think later" approach of some employees and encourage earlier settlements by realistically managing the expectations of employees.
The option of engaging in pre-claim conciliation with ACAS may also assist employees to better understanding their prospects of success and adopt a more realistic approach to settlement, provided that ACAS has sufficient resources to be provide the service effectively.
Perhaps unsurprisingly, the CBI are opposed to the Government's proposal to introduce additional financial penalties on businesses which are found not have complied with employment law. It argues that this merely raises the potential price tag of employment litigation, and therefore adds to the existing difficulties in encouraging parties to settle early and for a realistic price.
Increasing a tribunal's powers to dispose of weak claims
The Government proposes to strengthen the power of Employment Tribunals to strikeout weak or vexatious claims, use deposit orders, and make costs awards against claimants.
Whilst these proposals have been generally welcomed, as the CBI correctly points out, these powers are only effective if Employment Tribunals are prepared to use them. Employment Tribunals currently have a wide degree of flexibility in relation to striking-out claims and awarding costs but often seem reluctant to exercise those powers. A more robust and proactive approach may be required by Tribunal members themselves if the proposals are to have any meaningful effect.
The CBI has also suggested that league tables should be introduced to monitor performance and highlight differences between regions and particular Tribunals. It argues that there should be transparency and consistency across the system and there should not be any perception that either employees or employers are likely to have a more favourable result in one region rather than another. In addition, publishing statistics should encourage greater efficiency in the management and conduct of hearings.
Clearly, the CBI has considered the proposals primarily from the point of view of business and employers. Groups representing employees and workers, particularly the TUC, have been equally vocal in their criticisms of the proposals as destroying employees' rights and undermining access to justice. It remains to be seen how the Government will respond to the views of each side. However, the CBI is undeniably dissatisfied with the current system and will be hoping for a radical overhaul when the Government publishes its proposals in final form.