Government launches plan to cut down on workplace disputes

The proposals aim to boost job creation by providing more protection for employers. But are new laws the answer?

by James Taylor
Last Updated: 19 Aug 2013
We suspect that for many employers, news of potential reforms to the workplace tribunal system, announced by the Department for Business this morning, will prompt a reaction of 'not before time'. The Government is probably right that there's a perception that the current set-up has become too heavily weighted in favour of employees; so any changes that give employers more confidence about their rights - and thus make it more likely that they'll hire people - are to be encouraged. Although promoting better management is probably the best possible solution in the long term...

Official figures show that the number of tribunal claims jumped a massive 56% to 236,000 last year, while businesses spent an average of £4,000 defending each claim. So the goal - which seems emninently sensible to us - is to make the process cheaper, faster and more efficient. This means, principally, trying to stop disputes actually getting all the way to tribunal. So the plan is that employees won't be able to lodge unfair dismissal claims for at least two years after joining - and all claims will have to go via conciliation service ACAS in the first instance, to try and find an amicable solution (although ACAS isn't getting any extra funding, so this might be easier said than done).

Discouraging 'weak and vexatious claims' will also be a priority - so there'll be a fee for anyone bringing a claim, and efforts made to reduce the cost to employers. But there'll also be harsher financial penalties on companies who are found to have breached the rules, the idea being to encourage greater compliance in the first place.

All of this forms part of something called an Employers' Charter, which is intended to debunk some of the myths about employment law and give employers more confidence to hire people. Things like tribunals are particularly burdensome for small firms - and since, as the CBI's Richard Lambert pointed out this week, SMEs are the main source of new jobs in this country, the Government needs to be trying to reduce that burden.

Not surprisingly, the unions aren't convinced: they argue that it's unfair to remove protections for workers, particularly at a time when they're being pushed harder and harder by employers. And there are also doubts over whether extending the unfair dismissal threshold to two years will make much practical difference.

But in general, pro-employer moves are surely pro-jobs moves - so this is a step in the right direction. Although it's worth remembering that the best possible way of avoiding workplace disputes is by having managers who are able to avoid problems in the first place, or resolve them quickly if they occur. So working to improve line management skills will ultimately be far more powerful than any changes to the law.

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