By Max Clarke

In response to today’s announcement on the reform of employment tribunals and changes to unfair dismissal rules, the Director-Generals of the Confederation for British Industry (CBI) and the British Chambers of Commerce (BCC) comment on how this will affect business.

David Frost, Director General of the BCC, said:

On Employment Tribunals

“Employment Tribunals are one of the top business issues and we strongly welcome the Government’s move to reform the employment tribunal system. The current system wastes business time and money, and distracts employers from growing their businesses and creating much-needed jobs. In particular, the introduction of a fee for claimants will help to discourage spurious and baseless claims.”

On the new role for ACAS

“We are pleased to see a new role for ACAS in viewing all claims before they even reach tribunal. This is a very positive step but must be accompanied with enough resource for ACAS to deal with new claims.”

On unfair dismissal

“The changes to unfair dismissal from one to two years will be welcomed by employers as a sign that the Government is serious in their efforts to reduce red tape that inhibits business growth. However, this must be accompanied with more changes — on its own, this will not change the business view that employment law is weighted too far in favour of the employee.

“In his Budget, the Chancellor must announce further deregulatory measures and, in particular, re-assess plans to change the parental leave system twice in four years, amend flexible working legislation and remove the default retirement age.”

The CBI today commented on the launch of the Government’s consultation on reforming the employment tribunals system.

John Cridland, CBI Director-General Designate, said:

“For far too long the tribunals system has put the interests of lawyers above those of employers and employees. Given that 2010 saw a 56% rise in tribunal claims, the Government must look at ways of strengthening the process.

“It is in everyone’s interests that disputes are resolved swiftly and fairly. Introducing an element of charging would help weed out weak and vexatious claims, clearing the way for more deserving cases to be heard.

“Extending the qualifying period for unfair dismissal is a positive move that will give employers, especially smaller ones, the flexibility and confidence they need to hire.

Conversely, Dan Watkins, director of the solicitors' network Contact Law predicts that the move may be a mixed blessing:

"On the surface, increasing the (unfair dismissal) qualifying period may well give employers the much needed confidence and protection to recruit staff without fear of facing lengthy and expensive unfair dismissal cases in the first two years.

However, the flip-side is that these reforms may also give more unscrupulous employers license to ride roughshod over their employees, which in the longer-term will reduce productivity and damage morale within the workplace. While the Government addresses the issue of how to restore business confidence, it shouldn't forget employees' rights."