ARC think-tank on employment tribunal reform provides crucial input into government consultation

Hirers and senior recruitment professionals unanimously rejected the government’s proposal to impose a financial penalty on employers for breach of employment laws, at a think-tank meeting held by the Association of Recruitment Consultancies (ARC) to provide input into the government’s consultation on employment tribunal reform.

ARC brought together its members and senior HR practitioners to put forward their views and concerns directly to a panel of government representatives, including dispute resolution officials at the Department for Business, Innovation and Skills (BIS) and the head of the Employment Tribunal Service, on 14 April.

At the heart of the debate was the desire to eliminate the ‘blackmail effect’ of employment claims that have little merit, and yet employers feel obliged to make payments to claimants. Under the current system, it is difficult to have a claim struck out, and in 90% of the claims settled through ACAS, the employer had to pay out.

The 40 HR directors and recruitment agency owners at the meeting believed that financial penalties would compound this blackmail effect. One agency owner said: “It is outrageous that the government is contemplating this. It could put smaller companies out of business, and I think we need a much fairer solution for all parties.”

Attendees at the meeting also rejected the proposal to increase the qualifying period for bringing an unfair dismissal claim from one year to two years. The HR director of a major UK employer said: “I don’t like this at all. A year is long enough to work out if the employee is right for the business, and whether we’re getting something wrong. We would see a rise in discrimination cases if the qualifying period were to be extended. There would be a displacement to a different type of jurisdiction, and this type of claim is much more difficult to defend.”

Suggested reforms to the tribunal system that prompted a positive reaction from attendees were:

• Moves to encourage mediation and earlier dispute resolution.
• Tackling weak and vexatious cases by setting up an early vetting process to strike out claims or where appropriate asking claimants to pay a deposit to pursue their claim.
• A costs regime to encourage settlements.
• Incorporating a mandatory statement of loss into the ET1 tribunal claim form.
• Simplifying and shortening the employment tribunal process so judges can sit alone, with much of the administrative work delegated to legal officers.
• Organising hearings so that Tribunals start earlier and end later.

Commenting after the meeting, Craig Robb, Head of Employment Policy at HM Courts & Tribunal Service, said: “When Government proposes a suite of reforms like this, it is important for ministers and their officials to meet people in the real world who are dealing with employment tribunal claims. ARC’s meeting has helped us to gather evidence and develop thinking on matters of technical details, all of which will help as this work moves forward.”

ARC chairman Adrian Marlowe said: “It is our intention at ARC to facilitate relationships between hirers and recruiters – and to ensure that hiring organisations gain the best value. This meeting is a great example of government engaging with business, and the outcome of the discussion will help formulate the changes that have been planned. In our opinion, far too many employers are subject to the ‘blackmail effect’, and the balance is unfairly tipped against respondents – whether employers or agency suppliers. Our pressing concern is that, if the current employment tribunal process is not reformed, there could be a raft of unfounded and vexatious claims springing from the Agency Workers Regulations, which come into force on 1 October.”

For further comment on reform to the employment tribunal system, contact Ben Grover on 01273 777997 or [email protected]