Firms welcome tougher penalties for ‘time-wasting’ tribunal claims

Staff in the UK who take their employers to a tribunal but fail to turn up for the hearing could be charged up to £10,000 under tough new proposals announced by
the government.

Staff in the UK who take their employers to a tribunal but fail to turn up for the hearing could be charged up to £10,000 under tough new proposals announced by the government.

The measure is part of a long-awaited package of reforms drawn up by the Department of Trade and Industry to reduce ‘spurious’ claims. The new £10,000 ceiling on cost penalties that can be imposed for unreasonable behaviour is a significant increase on the previous £500 limit, and has been welcomed by business.

In addition to no-show cases, it could also be imposed when an employee seeks to damage a company’s reputation by airing unfounded allegations.Other proposed reforms include raising the deposit required from an employee who pursues a weak case from £150 to £500. There is also a new power for tribunals to strike out claims with no real chance of success.

Announcing the changes, trade and industry secretary Stephen Byers claimed they would bring about real improvements. He said: ‘I am concerned there are too many weak cases in the system causing significant delays for those with genuine claims. They also place unacceptable burdens on businesses.

‘Bringing a case is a serious step. People pursuing a claim with no reasonable prospect of success must be prepared to face heavy financial penalties.’

The reforms follow a raft of government legislation introducing new rights for employees such as the working time regulations and the minimum wage. Meanwhile, employers have complained that they face a constant rise in the legal cost of defending themselves against claims.

Digby Jones, director-general of the Confederation of British Industry, welcomed the proposals, but said their impact would depend on the willingness of tribunal chairs to use their new powers. The existing power to impose cost penalties of up to £500 for unreasonable behaviour is rarely used.

He said: ‘Businesses face a situation where it is often cheaper to settle than defend a case. We need tribunals to respond positively and ensure the measures are put into practice.’

The proposals will be published as draft amendments to the employment tribunal rules in the new year. Subject to consultation and parliamentary approval, they are expected to come into force next spring.