By Marcus Leach

The announcement by the Chancellor George Osborne that employees will have to pay a fee to instigate an employment tribunal — with the fee returned only if they win — is great news for businesses according to a business group.

The announcement, which will see a £250 fee, with another £1,000 due when a hearing is listed, has been declared "fair and reasonable" — particularly when compared with the very significant direct and opportunity costs of management time and effort in supporting a tribunal claim response.

"We welcome the introduction of tribunal fees and are delighted with the charge rates," Bibby Consulting & Support's Managing Director Michael Slade said.

"We believe that at this level they will go a long way to deterring employees from making unfounded claims. We also think the charges will encourage companies and their staff to work closer together to resolve any differences, and that can only be a good thing."

In the last 12 months there has been a 14 per cent increase in the number of tribunal cases brought by individual employees, with just 0.13 per cent of them having to pay anything. Indeed, 60 per cent of cases were settled by employers before they reached tribunal stage to help keep company costs down.

“We don't believe that introducing a tribunal fee would prevent those employees with a truly genuine case from seeking justice. But we do believe that a reasonable fee will discourage those who bring proceedings against a company without any merit," Slade said.

“Most businesses will want to support employees if they have a real grievance but they will also welcome the ability to filter out some of the weaker claims and certainly those that have no substance at all.”

There is a belief that companies could be encouraged to recruit staff following the announcement by the Chancellor that from April next year employees (excluding those with discrimination based claims) will only be able to claim unfair dismissal if they have been in post for two years instead of one as at present.

In a survey by Bibby a staggering 69 per cent said that extending the unfair dismissal qualifying period to two years would make them more likely to offer employment.

"Rather than provide employees with less job security, the changes to dismissal rules will mean that workers should benefit from more support from their employers. They will also have a greater opportunity to prove themselves as valuable members of staff," Slade concluded.

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