The law of firing and hiring

Hannah Langworth takes a look at employment disputes
Employment tribunals

Employment law is something that no business can afford to ignore. And indeed it's hard for anyone to do so. The papers are often full of the juicy details of unfair dismissal or discrimination claims; in the past few weeks, ex-Countryfile presenter Miriam O'Reilly's victory in her ageism claim against the BBC has been widely covered and in the City, the fall-out from the credit crunch has led to a number of high-profile courtroom battles, often revealing goings-on on trading floors and in boardrooms in lurid detail.

The media coverage of such cases often portrays the employer as the villain. But now, following a 56 per cent rise in tribunal cases last year, employers are fighting back, claiming that they are battling an ever-increasing number of nonsensical claims from opportunistic ex-employees.

Payback time

The British Chamber of Commerce (BCC) and the Confederation of British Industry (CBI) claim that the employment tribunal system (the quasi-court forum by which employees can bring unfair dismissal, wrongful dismissal, discrimination and other claims) is weighted against employers and in need of reform.

The BCC and the CBI complain that the employment tribunals infrastructure, overloaded with a heavy backlog of cases, is too slow and unwieldy. They also protest that the way in which the system works is inevitably financially punitive to employers; they argue that sometimes it is more cost-efficient for employers to pay out on claims rather than defend them - but doing so can encourage further claims. And even if employers fight and win a case, they may still be forced to pay legal costs. They argue that employees should be asked to pay a deposit of somewhere between �30 and �500 when they lodge a claim so that those considering making spurious claims are deterred, protecting employers and reducing the numbers of claims so that the process of hearing them runs more quickly.

It's the economy, stupid

The coalition government is sympathetic; the deposit idea is expected to be one of the proposals considered when a consultation on the reform of the employment tribunal system is launched later in January. The government is also adding some ideas of its own. Government advisor Lord Young has recently suggested that the period of time employees must have served on a job before bringing a claim should be raised from one year to two.

As with the spending cuts, the Government is billing these potentially unpalatable changes to employee rights as in the best interests of the British economy. It's suggested that they'll be packaged in a new �employers charter" intended to stimulate recovery together with a raft of other measures, including a reduction in the amount of statutory sick pay available and a waiver of certain employment law provisions for companies below a certain size, who often bitterly complain that strict adherence to the law on issues such as illness and maternity leave makes it difficult for them to remain economically viable. So it's probably no coincidence that the government is considering these steps as David Cameron hosts a high-profile �jobs summit" for business leaders to discuss how the economy can be jumpstarted by creating new roles.

All rise?

As you'd expect, the Trade Union Congress (TUC) takes a different view, arguing that employer lobbies such as the BCC and the CBI are not justified in representing employees bringing claims as greedy troublemakers. They point out that, once multiple actions are disregarded, the increase in the number of claims was a much smaller 14 per cent, which seems understandable in a year when the effects of the recession are beginning to really have an impact on businesses - lawyers expect the number of employment claims, like any kind of corporate litigation, to rise during hard economic times. They argue that the proposed requirements for a two-year service period and claimant deposits would prevent many deserving employees from bringing claims, and so increase the hardships of many workers in a difficult economic climate. The TUC has further suggested that government time would be better spent ensuring that all companies complied with their legal obligations to their employees rather than tinkering with tribunal mechanics.

The question of which side is right probably depends on your political allegiances. However, it's interesting to note that both factions agree on one thing: more employment disputes should be settled in the workplace and fewer should end up at a tribunal. There's a perception on both sides, despite the fact that many claimants and defendants choose to represent themselves, that due to the ever-spiralling nature of legal fees and the tendency of the profession to procrastinate, the only true winners at a tribunal hearing will be the lawyers. 

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