As we see taxes rise and public spending decrease, it is now more important than ever to make doing business as easy as possible.
In the greater Birmingham LEP we have declared our ambition to make our area the easiest place in Europe in which to set up and run a business by 2020.
Part of achieving this requires us to reduce red tape and the burden of unnecessary legislation. That’s why the Birmingham Chamber of Commerce group is urging the Government to introduce a fee for pursuing employment tribunal claims.
In a recession, the incidence of dispute between employer and employee over working time and redundancies would be expected to rise, but not by the extent seen in recent years. In the last 12 months, claims across the UK have risen by 56 per cent, to 236,000. In the last three years, claims have nearly tripled in number.
While tribunals have a legitimate role, there is evidence the system is being abused with a rise in the number of “no win-no pay” legal services and an increase in individuals making spurious claims in the hope of winning easy pay-outs, as employers seek to avoid costly legal fees. The Chamber estimates a typical claim can cost employers £8,500 to defend at a tribunal, while settlements average £5,400.
Our suggestion to the Government is that a fee or deposit, returnable if the claimant wins the case, be levied as a pre-condition to any claim being instigated. The size of the fee needs to be sufficient to stop speculative claimants, but also needs to be affordable.
Anything that can reduce the cost and time of employment-related claims has to be welcomed.
The rise in VAT plus public spending cuts, a banking system that is still weak, sluggish exports together with the inflationary impacts of rising raw materials/fuel costs threatening increased interest rates all point to a tough start for our local economy. In the teeth of these challenges, it is now unacceptable to carry costs like unnecessary employment tribunals as we seek to encourage employers to grow the private sector economy.
* Jerry Blackett is chief executive of the Birmingham Chamber Group
