'Employer's charter' to protect firms from claims

The prime minister, David Cameron, is to launch an overhaul of employment law to give employers more protection from claims by workers.

According to reports in The Daily Telegraph today, staff would have to work in the same post for two years, rather than one, before being able to bring claims for unfair dismissal.

The government would introduce fees for claimants at employment tribunals, and small firms could be exempted completely from certain legal obligations.

It has also been reported that the new 'employer's charter' would cut the number of weeks that workers are entitled to statutory sick pay.

No further details of the changes were available this afternoon, as the prime minister met the heads of some of Britain's biggest companies in a 'jobs summit'.

A spokesman for the department for business, industry and skills said the changes were part of the coalition's wider review of employment law, which was already under way. He could not say when the first conclusions would formally be announced.

James Davies, joint head of employment law at Lewis Silkin, said increasing the limit for unfair dismissal claims from one year to two could cut the number of claims by around ten per cent.

'They are looking at the problem the wrong way round,' Davies said. 'The problem they are trying to tackle is too many spurious claims, but there may be better ways to achieve this.

'There is too great a reluctance by employment judges to award costs against parties who pursue claims with no merit or defend meritorious claims.'

Davies said that introducing a fee for bringing tribunal claims could discourage low-paid workers from bringing claims which had merit.

He warned that cutting the number of unfair dismissal claims by restoring the two-year time limit would increase discrimination claims.

Davies predicted that a quarter of the unfair dismissal claims blocked by the new time limit could take the form of discrimination claims by older, female or ethnic minority workers.

'Discrimination claims are much more complicated and potentially damaging to an employer's reputation,' Davies said.

'Unlike unfair dismissal, they are covered by European law. Employers are more likely to instruct expensive lawyers and settle them early.'