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NEW EMPLOYMENT TRIBUNAL RULES TO CUT COSTS FOR NORTH EAST FIRMS BY TACKLING ‘CLAIMS CULTURE’

 A specialist north east employment lawyer has broadly welcomed plans for new rules designed to cut the number and resulting cost of dubious employment tribunal cases being brought against north east businesses.

 Sarah Fitzpatrick, associate solicitor at employment law firm Collingwood Legal, was speaking after the government announced two changes to the regulations around employment tribunals which will be introduced in the summer.

 For the first time since their introduction in the 1970s, employees will have to pay a fee to present a claim to the employment tribunal, a move which is designed to discourage the number of weak claims that are put forward and thus minimise the resources that businesses have to put towards opposing them

 The initial £250 fee to bring an unfair dismissal claim is part of moves to tackle the “claims culture” whereby employees who realise that it is often cheaper for a company to settle a claim than to fight it and win it, regardless of its merits, bring a claim against their employer in the hope of getting an easy pay-off.

 People on low incomes are expected to have to pay reduced fees, although full detail of what these would be have yet to be confirmed.

 A new limit on compensation awards for unfair dismissal will also be set at either the employee’s annual salary or a maximum of £72,300, whichever is the lower figure.

 The number of employment tribunals is falling year-on-year, and the changes are expected to reduce the number still further, but the most recent Government statistics still show that more than 186,000 employment tribunal claims were brought in the UK between April 2011 and March 2012

 Sarah Fitzpatrick says: “The cost to businesses in terms of both time and money of fighting an employment tribunal can be significant and this is critical at a time when a lot of companies need all the resources they have available to simply stay in business.

 “Having to pay a £250 fee just to present a claim to the tribunal, and to then have to pay an additional £950 fee if the case actually goes to hearing will hopefully lead to a reduction in claims being lodged which have little merit or prospects of success. 

 “The change in compensation limits will also help to address the notion that some employees have that because the compensation has a cap of £72,300 that is what they are going to achieve, and it will also give employers certainty of how much compensation could be awarded if the ruling goes against them.”

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