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January 10, 2011 2:34 pm

Plan to charge for employment tribunal claims

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Ministers are preparing to stoke a row over job protection by introducing plans to charge hundreds of pounds to lodge an employment tribunal claim.

The move comes after trade unions responded with fury to proposals that will make it easier for companies to sack underperforming workers.

Business groups were delighted by the likely moves, part of a potential “employers’ charter” shaking up employment laws that will be announced within the next two weeks.

Ministers plan to increase the qualifying period before people can lodge unfair dismissal cases at a tribunal from one year to two.

The coalition also plans to introduce a fee to lodge a tribunal claim in order to discourage vexatious claims. Whitehall insiders say this is likely to be at the higher end of the £30-£500 proposed by employers’ groups.

The aim is to reverse a trend that saw a 56 per cent rise in claims last year. The increase was only 14 per cent when multiple claims on issues such as working time were excluded but employers say they face a growing number of spurious claims.

Unite, the largest union, said the plans would be a “rogue’s charter” and would not stimulate jobs growth. Ed Miliband, Labour leader, said David Cameron, the prime minister, was “making it easier to sack workers and he is letting bankers off the hook”.

Downing Street has asked Vince Cable, business secretary, to examine whether small companies could be excluded from some employment laws, although that is difficult legally, particularly in light of European legislation. Another idea is to reduce the length of time companies have to pay statutory sick pay.

David Frost, director-general of the British Chambers of Commerce, said while many large companies had pledged to create jobs this year, smaller ones needed more encouragement. “Some proposals aired by the government, including reform of employment tribunals and a radical reduction in regulation for small business, would make a big difference.”

But John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said it would be “particularly inadvisable” to extend the qualifying period for unfair dismissal claims.

“Such a move would do nothing for jobs in the short run against a backdrop of weak economic growth and would at best have only a limited impact on the economy’s underlying job creation potential,” he said.

The moves came as some of Britain’s biggest companies promised to create thousands of jobs in 2011 at a “jobs summit” hosted on Monday by Mr Cameron.

One senior businessman present said attendees told Mr Cameron they supported proposals to make employment laws more flexible for smaller businesses so they could hire and fire employees more easily.

The executive said Mr Cameron was in “listening mode” as business asked the government to do more to incentivise investment and speed the planning process to help them build more shops and factories and create more jobs. Retailers also complained that business rates remained too high.

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