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Government acts to change unfair dismissal tribunal system

Staff who believe they have been unfairly dismissed could, in future, face extra barriers when taking their employers to an employment tribunal.

The Goverment has said that it wants to see the qualifying time for bringing a claim raised from one to two years of employment.

Any employee making a claim may also be obliged to lodge a fee before the case can proceed. The Government argued that the current system leads to a large number of unmerited or vexatious claims.

A government spokesman commented: "We've heard loud and clear the concerns from businesses up and down the country that the system has become too costly, takes too much time, and that it is too easy to make vexatious claims.

"We're particularly concerned that it places unnecessary strains on small businesses."

However, the plans only extend to claims for unfair dismissal and not to other issues, such as discrimination, for which employers can be taken to a tribunal.

The number of tribunal claims climbed to 236,000 last year, a rise of 56 per cent.

It is estimated that the average cost to employers of defending a claim is in the region of £4,000.

The announcement is the first in a planned series of reforms to employment law.

The Prime Minister, David Cameron said: "The announcements on reforms to employment law are among the first conclusions of our government-wide growth review, and highlight our determination to ensure that employment law is no longer seen as a barrier to growth, while making sure that employees and employers are treated fairly.

"Giving businesses the confidence to take on somebody new will be a real boost to the economy, and help generate the sustainable growth we need."

It is hoped that, by doubling the qualifying period for unfair dismissal claims, the number of cases going to tribunal will shrink.

Other proposals include first-stage compulsory mediation stage for workplace disputes through the Advisory, Conciliation and Arbitration Service (Acas). The Government also wants to see the tribunal process speeded up via a number of measures, such as widening the scope for cases where judges can sit alone.

John Cridland, the CBI's director-general designate, welcomed the move.

He said: "For far too long the tribunals system has put the interests of lawyers above those of employers and employees. Given that 2010 saw a 56 per cent rise in tribunal claims, the Government must look at ways of strengthening the process.

"It is in everyone's interests that disputes are resolved swiftly and fairly. Introducing an element of charging would help weed out weak and vexatious claims, clearing the way for more deserving cases to be heard.

"Extending the qualifying period for unfair dismissal is a positive move that will give employers, especially smaller ones, the flexibility and confidence they need to hire."

David Frost, director general of the British Chambers of Commerce (BCC), agreed: "Employment tribunals are one of the top business issues and we strongly welcome the government's move to reform the system.

"The current system wastes business time and money, and distracts employers from growing their businesses and creating much-needed jobs. In particular, the introduction of a fee for claimants will help to discourage spurious and baseless claims."

Mr Frost also applauded the proposal requiring all claims to be lodged with Acas to allow conciliation before they reached a tribunal: "This is a very positive step but must be accompanied with enough resource for Acas to deal with new claims."

The measures are to be put out to consultation.

The Government said that it wants views on achieving earlier resolutions of workplace disputes in a way that is fair and equitable for both sides, without having to go to an employment tribunal, and ensuring that, where parties do need to come to an employment tribunal, the process is as swift, user-friendly and effective as possible.