Employment tribunal changes 'will reduce claims'

Extending the qualification period for unfair dismissal from one year to two and introducing fees will cut the number of claims at employment tribunals, solicitors have agreed.

The changes were announced by chancellor George Osborne at the Conservative Party conference and will come into force on 6 April 2012. The MoJ said the fee changes would feature in a consultation document published by the end of November, but declined to confirm the reported figures of £250 to lodge a claim and £1,000 on listing.

Jo Davis, head of employment at BP Collins, predicted an increase in discrimination claims from those who could no longer rely on unfair dismissal.

'Those with under two years' service will want to find a way to have their day at a tribunal,' she said.

'It may be that more discrimination claims are struck out, for example where a worker has been dismissed for being a poor performer, rather than being black or female.'

However, with the introduction of fees, Davis said even discrimination victims would be taking a risk, as the fee would not be refunded if they lost. 'You could say it's the end of 'no win, no fee' in employment cases.'

Davis said the changes, taken together, were likely to cut the number of all kinds of employment tribunal claims.

Robert Riley, partner at Addleshaw Goddard in Leeds, said employers welcomed the changes and felt the balance had swung too far in favour of claimants.

He said some workers could benefit from the extension of the qualifying period.

'It might turn out to be a good thing if employees are given a longer go at settling in or dealing with teething problems. Employers might adopt less ruthless practices.

'Fees will put off the more speculative applications, which I think is a good thing, though this must be balanced against access to justice.

'Why should employment claims be dealt with in a way different to other civil claims? You have to pay county court fees. There must be some cash coming in to pay for the system.'

Riley added that claimants would have to think 'much more deeply' before bringing a claim in the first place.

James Davies, joint head of employment at Lewis Silkin, said: 'Unfair dismissal law is not fit for purpose and is flawed, but the answer is not to arbitrarily reduce the numbers who can claim.'

Davies said research by his firm had shown that the only other country with a two-year limit for unfair dismissal claims was Panama.

He rejected the idea that workers might be given more time to prove themselves. 'Employers know well before a year whether they've made the right choice or not.'

He said fees might be reasonable for high-value employment tribunal claims, with hundreds of thousands of pounds at stake, but not for small claims.

'There are lots of little claims where parties are unrepresented and arguing about small sums of money,' he said.

'There must be no denial of access for justice for genuinely-held small claims.'

Davies added that, if disproportionate fees were introduced, a challenge could be launched under article 6 of the Convention.

Business secretary Vince Cable said: 'A key part of the government's growth strategy is to create the conditions which allow businesses, particularly SMEs, to grow and expand by reducing regulation and maintaining a flexible and dynamic labour market."