Tribunal reforms could lead to rise in out of court settlements, admits employment minister
20th December 2011
Posted by Richard McKenna
Out of court settlements for workplace discrimination cases and other employment disputes could rise under changes to the tribunal system being proposed by the government.
The government wants to see a move away from what it sees as an overly litigious approach to resolving disputes between employers and workers by encourage early conciliation between the two parties without resorting to a tribunal.
A key component of proposed reforms would see all cases sent to mediation service Acas automatically before reaching court.
However, employment minister Ed Davey has admitted that this could lead to a rise in companies agreeing to settle disputes out of court by making a lump sum payment in order to avoid legal costs, even if the claim is spurious.
"We do think settlement agreements will go up, we don't have the data, but yes I would expect they would go up," he told the Telegraph.
Out of court payments could be further encouraged by the fact that under the government's proposals, employers who lose tribunal cases will face a fine for the first time, worth up to £5,000.
They could also end up reimbursing newly introduced claimant fees for lodging a case.
Adrian Crawford, partner at law firm Kingsley Napley, told the newspaper that some employees may try to take advantage of this by seeking payments for cases they may have been unlikely to win at tribunal.
"Employees know the price of an employer going to court and losing and they will exploit that," he said.
However, organisations working in the mediation sector have given their backing to the proposals this week following a meeting between Mr Davey and representatives from the Civil Mediation Council, the Chartered Institute of Personnel and Development and Acas.
"Resolving disputes through discussion and agreement rather than confrontation is at the heart of Acas's ethos," said Andrew Wareing, national operations director at Acas.
"We are delighted that Mr Davey is making such a strong commitment to promoting the mediation approach to workplace disputes."
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