Jobs: Employers want changes to dispute resolution system

MORE than two in three employers say they have no effective protection against employees making wholly unjustifiable claims to employment tribunals, a survey has found.

Friday, 15th April 2011, 8:55 am

The Conflict Management survey report by the Chartered Institute of Personnel and Development (CIPD) shows three in five respondents (61 per cent) have experience of an employee claiming unfair dismissal and ‘tagging on’ a discrimination claim in the hope of getting more compensation.

Fifty-five per cent say they have endured a complaint against their organisation on malicious grounds.

More than half (52 per cent) think the law on unfair dismissal should be amended to make it easier for employers to dismiss. A similar proportion (54 per cent) also support more effective case management to identify ‘vexatious’ claims, with exactly half supporting the move to require tribunals to award costs against losing claimants.

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Mike Emmott, employee relations adviser at the CIPD, said: “This survey reflects the strength of feeling among employers about the failings of the current system for resolving workplace disputes. Despite many attempts in recent years to find a solution, the volume of tribunal claims has increased and employers believe they have no protection against weak or speculative claims.

“However the survey findings also suggest that recent plans outlined by the government – to increase the minimum period employees serve before they can claim unfair dismissal from 12 months to two years – will have only limited impact on the number of claims. This is because many claims are linked to discrimination claims which can be made from day one of employment.

“The real problem is that the employment tribunal system itself is broken and its costs and benefits are wholly out of line. The government needs to take a radical look at the existing machinery for protecting employment rights.”

The survey also indicates a vote of no confidence for the current dispute resolution system. Seven out of ten employers (70 per cent) use compromise agreements to avoid the risk of tribunal claims, with more than half (52 per cent) saying that their use of compromise agreements has increased in the last two years. Also, half of respondents (49 per cent) say their organisation has increased its use of mediation in the last two years

Mr Emmott added: “It is encouraging to see that employers are increasingly using mediation to resolve workplace issues. Not only does the survey show that it is significantly cheaper than having to respond to tribunal claims, but a large majority of respondents say that it improves relationships between employees and reduces or eliminates the stress involved in more formal processes.

“In-house mediation, using trained managers and others, can reinforce a culture where people recognise they need to take some personal responsibility for sorting out their problems.

“It is also positive to see that organisations are increasingly training managers to have difficult conversations. This is vital if problems relating to employees’ performance or behaviour are to be nipped in the bud instead of escalating to the point where formal and often lengthy disciplinary action has to be taken.”

Other findings include:

> The number of days management and HR spent on managing both disciplinary and grievance cases has gone up since 2007, the last time the CIPD conducted a similar survey, Managing Conflict at Work: from 13 to 18 days (disciplinary) and from 9 to 14.4 days (grievance)

> There are significant differences between sectors – the number of days of management time (excluding HR) spent on handling grievances in the public sector (nine days) is much higher than private services (5.5 days)

> There have been significant increases in the use of most forms of managing conflict, internal and external. Almost half of respondents say their organisation has increased its use of disciplinary action (50 per cent) and grievance procedures (48 per cent)

> Three out of five (62% per cent) say their organisation is making increased use of training line managers in handling difficult conversations

> Major reasons for using compromise agreements (other than to settle an existing claim) are to remove an employee on grounds of poor performance or misconduct (39 per cent), to avoid legal challenge in relation to redundancy (26 per cent) and to make it easier to remove senior staff without embarrassment (24 per cent)

> The median compensation payment under compromise agreements is £10,000, while one in five (20.3 per cent) report that the typical payment is £25,000 or more

> Looking at the total costs involved in concluding compromise agreements, including compensation, the median is £11,000.