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Shake-up to stop 'bonkers' tribunals

Paul Waugh, Deputy Political Editor
29 Sep 2008


Britain's employment tribunal system will be radically overhauled by the next Tory government in a bid to stop "bonkers" rulings against firms, shadow business secretary Alan Duncan signalled today.

Mr Duncan said it was time the 40-year-old system was shaken up to give bosses more flexibility to hire and fire in line with their company's needs.

His call for urgent reform was sparked by the verdict of a tribunal this summer which force a London hair salon to pay £4,000 compensation to a Muslim woman who was refused a job because she wore a headscarf. The woman had been rejected for 25 hairdressing jobs.

In another case this month, a Scottish woman is taking action against Lothian and Borders Police because it refused her a Pc post on the grounds that she had poor eyesight. The woman is claiming discrimination on grounds of disability.

Businesses now feel that the tribunals are so heavily stacked against them that it makes it easy for employees with a grudge to use the system to extract outof-court settlements.

The Confederation of British Industry has found that all firms with fewer than 50 staff now settle every claim despite legal advice that they would win almost half of the cases.

Among the plans being considered by the Tories are moves to impose a fee on any litigant who loses their case. At present there is no deterrent from a claimant lodging a complaint.

Other changes will be aimed at restoring employer confidence in the system by changing statutory dispute resolution procedures. The CBI wants to require all claimants to make clear in writing they are lodging a grievance before the situation can escalate to a tribunal.

Mr Duncan said he believed some small firms felt "intimidated" by the current system, adding: "Some of the recent employment tribunals have been bonkers."

Reader views (7)

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In accepting a claim from an employee, the Employment Tribunal should provide all claimants with a clear official warning that taking this action can result in costs which can run into hundreds of thousands. A claimant can be subjected to multiple costs orders simply because the claims are found to be misconceived and where the employee has filed a number of claims against the same employer. The Tribunal Service is suppose to be a free service intended to discourage employers mistreating their staff. However, the costs rules means that claimants can no longer afford to attempt to get justice, since they may be faced a big cost order, even if they have been dismissed or are on a low income. I also agree with Mr NonVextatious regarding the difficulty discrimination claimants face. Race discrimination claimants, in particular, face an additional problem concerning credibility. Tribunals often chose not to believe their statements, despite overwhelming evidence in support of their case. The legal professionals owe a duty to their clients, particularly employees, to explain that despite them having a well founded argument, the claim may still fail and a lot depends upon whether the Tribunal decides to be fair. My experience is that trying to get justice from an unfair judicial system is a time-consuming, soul destroying, expensive business that instead of compensating you against appalling treatment from your employer will tend to charge you and make you lose your sanity.

- Bev, London, 23/12/2008 21:40
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It is of course correct that EU Directives lie behind many UK employment laws, nor least in the area of non-discrimination. But the Government has "gold-plated" almost all of them, to a greater or lesser extent, so in fact there is quite a lot of scope to improve the law.
For example, with discrimination law there is no need to allow compensation for "injury to feelings". Also, it is possible for the law to cap compensation in the case of job applications. And there are many other examples.
But it will probably take a Conservative government to do anything about it.
Non-discrimination law is an absolute legal minefield, especially for small firms. It is not surprising that so many business owners (72%) choose not to employ anyone, for fear of falling foul of the rules.

- Philip Sack, Uxbridge, 23/10/2008 11:26
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Mr Duncan's sentiments may be well placed but his proposals will be very difficult to introduce in reality. We are members of the EU and that means that the UK can not cherry pick which laws to apply. The cases cited in your article are essentially based on existing discrimination law - and I suspect that if the facts of those cases were known that they would not be as ridiculous as the headlines suggest. I am an employment lawyer (acting on both sides of the fence)and there is no doubt that it is extremely frustrating for employers (large and small) who are forced to deal with vexatious and unmeritorious claims. However, the existing tribunal system already permits applications for costs orders to be made in those circumstances. In addition, if an employer believes that a case is weak then an application can be made to have the case struck out or alternatively for an order that the employee be required to pay a deposit to the Employment Tribunal before their case is allowed to continue. The system could however be improved in my opinion by the introduction of measures which would impose a financial penalty on an employee who unreasonably refuses a reasonable settlement offer (as is the case in litigation in the County and High Courts). As for employers wanting more power to hire and fire - isn't that always the case?

- Nathan Combes, Yorkshire, 08/10/2008 11:25
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I work in this area. It's not true that employment tribunals are stacked against employers. The vast majority of discrimination claims fail, even where well founded, because the evidential burden on claimants is high. The test for unfair dismissal gives employers huge discretion to dismiss as they see fit, and costs can be and increasingly are imposed on claimants who bring unreasonable, spiteful or unfounded claims or don't conduct themselves properly during their cases. Contrast this with the numbers of people who have been treated appallingly at work but don't bring claims because they are either unaware of their rights or can't find representation; the people who are intimidated by the aggressive tactics used by employers' representatives; and the people who don't get any compensation when they win their claims because employers simply refuse to pay up, and because the system for enforcing awards is expensive and lacks teeth. On each tribunal panel there is a judge who is an employment lawyer, and 2 wing members who respectively represent employer and employee interests, to provide the balance of an 'industrial jury'. It's easy to give the impression of 'bonkers' decisions by summing up without the wealth of evidence and detail that the tribunal will have considered in each case, when reaching its decision, and all those 'settled' claims are likely to have been settled at a fraction of their real value because unrepresented claimants have been bullied into acceptance.

- Nonvexatious, London, UK, 02/10/2008 14:36
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The fact that a tribunal claim does not succeed does not necessarily mean it was unfounded - it can be very hard to prove a case to the satisfaction of the law. But you also have to wonder whether Mr Duncan has thought this one through. For imposing fees on claimants AFTER their tribunal claim has failed would be unworkable - why would people pay them, especially if they are low paid or, having been dismissed by their employer, living on benefits? Or is Mr Duncan suggesting that the State would chase such individuals for the fee? If he is, then I hope he also favours the State chasing the one in ten employers who don't pay the tribunal awards made against them. Will The Standard ask him?

- Richard Dunstan, London, 01/10/2008 15:56
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"The Confederation of British Industry has found that all firms with fewer than 50 staff now settle every claim despite legal advice that they would win almost half of the cases."
This sentence and the CBI's contention is preposterous. As an employment lawyer, I have first-hand experience of many small employer successfully defending employment tribunal claims; in some instances they have even been able to recover costs due to the vexatious nature of the claimant.

- Peter Frampler, London, 01/10/2008 14:31
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This sounds a bit one sided. Are the Tories going to propose that costs will be levied on Employers if they lose their case as well?............They want to be careful here they are sounding like "the same old same old" Workers v Bosses.

- Nick Cattrall, PLYMOUTH, 01/10/2008 09:57
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