2012 will be a landmark year for employment reform – not least as we could see the introduction of fees for employment tribunals.

The Government’s consultation, which closes later this year in March, asks for views on two possible scenarios. The first would be an initial fee of £150-£250 to begin a claim, with an additional fee up to £1250 if the claim goes to a hearing, with no limit to the maximum award.

The second option would be a single fee between £200 – £600 for awards up to £30,000 with the payment of an additional fee of £1,750 if the claimant sought greater compensation. In both options, the tribunal would be given the power to order the unsuccessful party to reimburse fees paid by the successful party and there would be concessions to avoid hardship.

Although this consultation should be welcomed by businesses, as it is intended to provide confidence when taking on new staff, when looked at in detail there is a danger that the plans might not achieve the intended aims, could be seen as a barrier to justice and could create additional costs.

It might, however, be worth keeping an open mind on alternatives to charging across the board, including a combination of compulsory mediation with charging at a commercial level but only those who refuse to engage in mediation.

Such alternative proposals could work effectively alongside the introduction of a simple form of ‘no fault liability’ for dismissals other than discrimination.

During a probationary period, dismissal could happen for any reason, subject to the contract. After the end of the probationary period, dismissal could still happen for any reason, at any time.

If there is ‘cause’ – something which would need to be defined - the employer would not need to pay anything to the employee, apart from what is provided in the contract.

If there is no cause, there would be a statutory ratchet of sums sufficient to be a deterrent. This could also be proportionate, to ease the burden on smaller businesses.

The aim of the whole process is not to help employers to sack poor performers, but to create a simple and cost-effective process to manage dismissals with greater certainty of outcome for both employers and employees.

The Government is considering some radical ideas in relation to employment law and it will certainly be interesting to see what happens over the next 12 months.

 Fergal Dowling is employment partner at Irwin Mitchell