The Enterprise Minister has welcomed figures showing a decline in the number of employment tribunal cases, saying that the old system “ruthlessly exploited” small businesses in the UK.
Matthew Hancock (pictured) said that the 79 per cent fall in the number of tribunal cases over the final quarter of 2013 was positive news for businesses. He added that thousands of dishonest employees had been “squeezing the life” out of firms by making fake claims for issues ranging from harassment to discrimination under the previous system.
Since the roll out of new rules governing tribunals at the end of last year, the sharp decline in the number of cases brought against companies is proof of the scale of false accusations previously made, Mr Hancock said.
The number of unfair dismissal claims fell by 58 per cent while the number of sex discrimination claims fell by 77 per cent in the final three months of last year. Overall, there were less than 10,000 new claims in 2013, compared to more than 40,000 in 2012.
The reforms included the implementation of fees of up to £1,200 for claimants, where previously they could bring a claim for no charge. The reforms also saw the amount of time that an employee must be in a job prior to bringing a claim double from one year to two. Many have argued that the reforms represent a “barrier to justice” for workers, while Mr Hancock said that they would make firms more willing to take on new staff.
“British business has been forced to battle a silent job-killer in recent years”, Mr Hancock told The Telegraph.
“Below the radar – unnoticed by many – firms big and small have fallen victim to the insidious growth in vexatious employment tribunal claims.
“Employment protections are vital in any modern economy. But this had become a system that in too many cases was being ruthlessly exploited by people trying to make a fast-buck… It put some small businesses off hiring at all.”
From this month onwards, employment tribunal claims must also be submitted to the conciliation service Acas prior to proceeding to a full tribunal.