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Coalition’s Tribunal Reforms aim at Building Business Confidence with Worker Insecurity

Authors: The Work Foundation Stephen Overell

01 March 2011


This blog has noted before the back-to-the-eighties feel of the government’s tribunal reforms. But what practical effect will there be on the numbers seeking ‘workplace justice’ and what is the underlying philosophy behind the reforms?

Our sources are the recently published impact assessment and consultation document which set out the proposals in more detail.

Aside from the more technical elements of the changes, there are perhaps three main aspects: doubling the qualification period for unfair dismissal rights, the introduction of fees to bring a claim, and the use of ‘pre-claim conciliation’ to encourage employees and employers to settle their differences prior to making a claim to a tribunal.

Potentially, lengthening the qualification period affects some 11.8% of all workers (2.9 million people) who have been in their jobs for more than one year, but less than two; they face having their legal position at work worsened. Yet as a proportion of existing tribunal claims, up to 15% would be rendered ineligible at a stroke. So how many people are projected to be put off bringing their work-woes to an employment tribunal by the plan? At most, 4,700 reckons the government. Considering 236,000 claims were registered last year, that sounds paltry. Why so few?

The main answer is that only a minority of unfair dismissal claims are for straightforward unfair dismissal. Generally, applicants claim other things besides – discrimination, loss of wages, breach of contract and so on. Although unfair dismissal is currently the number one grievance brought before tribunals, the qualification period change could cause litigants to look to other laws to seek their justice, displacing activity, but not necessarily deterring it.

Compare this figure to the hopes invested in pre-claim conciliation. In future, all claims will not be made initially to a tribunal, but to Acas, the official employment relations go-between agency, which will have a month to see if things can be patched up (though conciliation is not to be mandatory). The government thinks this could deter as many as 12,000 tribunal claims – perhaps an ambitious number considering that relationships are generally pretty bad by the time outside intervention is sought.

The introduction of fees to bring a claim will also doubtless put off a few too. But neither document puts a figure on this: a further round of consultation may shed some light. For underlying philosophy, however, the section of the impact assessment on fee-charging is most revealing.

The document argues we ought not to think of taking a case to an employment tribunal as a right, but more as a service that should be funded by service-users rather than taxpayers. Tribunals are akin to private disputes, it reckons – the kind of thing that happens in county courts between motorists and over-zealous car-clamping firms – and so should, for the sake of consistency, not be fully funded by taxpayers. And it goes on to make this argument on both fairness and efficiency grounds. Charging fees 'generates equity gains' by removing the taxpayer 'subsidy', while providing tribunals free of charge causes it to be 'over-consumed, which generates a welfare loss for society'.

These are extraordinary arguments made in apparent ignorance of the history of the tribunal system and of the dynamics of the employment relationship. Employers and employees are not and never can be equal participants in the employment relationship. The reason tribunals have historically been 'free' to claimants is that they offer a degree of counter-balance to the labour market power of employers by enabling people to access justice relatively easily (though they are never free in emotional and career terms). And in doing so they provide an important mechanism for ensuring decent standards in employment practice.

Obviously, perspectives have now changed. Justice is apparently best-served by reducing the possibility for the embittered to have a go. This position is even more peculiar given that the documents (see page 35 of the consultation) rightly observe the number of weak and vexatious claims in the system is actually low.

Business confidence is the stated aim of the reforms rather than reducing the number of claims. The price of this confidence is a shifting of risk onto the shoulders of workers: they will be more insecure and more wary of the multiple stages that will be involved in exercising workplace rights.

Comments in Chronological Order (Total 1 Comments)

James R Gibbs

27 Oct 2011 2:03PM

Yet another informative article. I am wondering however as to how many of those 236,000 unfair dismissal claims were actually successful.