Chancellor confirms tribunal reform - Change can boost hiring activity, says REC

Chancellor confirms tribunal reform - Change can boost hiring activity, says REC

Speaking at this week’s Conservative Party Conference, Chancellor George Osborne confirmed Government plans to reform employment tribunals. This was one of the priority areas identified by REC members during our last year’s initial consultation on red tape in the sector.

Specific measures include introducing a fee for taking a case to a tribunal that litigants only get back if they win. In addition, workers will only be able to lodge unfair dismissals claims after two years of employment, rather than after one year. 

Speaking at the Conference in Manchester, the Chancellor said:

“We respect the right of those who have spent their whole lives building a small business not to see that achievement destroyed by a vexatious appeal to an employment tribunal. We're ending the one-way bet against small business. Fears of vexatious claims often act as a disincentive for businesses to employ new people. Introducing fees will help give businesses the confidence they need to create new jobs.”

Picking up on what the changes will mean for hiring activities, Tom Hadley, the REC’s Director of Policy and Professional Services, says:

“Employment tribunals are a major source of concern for recruiters and for the wider business community. Reform of the current system is long overdue and was one of the key recommendations in our submission to Government.  Anything that can boost hiring activity and increase employer confidence has to be welcomed. These and other measures in the pipeline should increase fluidity in the jobs markets which will be good news for recruiters.”

From April 2013 the Government will introduce fees for employment tribunals. The Government will be consulting of what levels these fees should be set at. Currently an employee can claim for unfair dismissal after being employed for only a year. From April 2012 employees will only be able to make a claim after two years.

"Day one" rights - such as the right not to be discriminated against - will not be affected.

There is general consensus that the existing ET system doesn't work for anyone -- employers or claimants. Looking ahead, the Government will be seeking to strike a careful balance to ensure that fees put off those who are trying to 'work' the system, but are affordable for genuine claimants.