Britain's employment tribunal system is encouraging a ‘have-a-go mentality’ amongst disgruntled employees that is fuelling a rise in speculative employment claims, the CBI has alleged.
The latest annual CBI employment trends survey of 500 companies has found that almost seven out of ten firms believe the number of "weak and vexatious" employment tribunal claims has increased over recent years.
More than four out of ten firms also per cent of companies believe the employment tribunal system is ineffective. One in three think it is too costly, while half say it is too adversarial.
According to the employers' body, figures from the Employment Tribunals Service showing a 17 per cent rise in tribunal cases in the year to April highlight the growing cost of the compensation culture on British business.
“With the compensation culture spiralling out of control, companies do not have confidence in the current tribunal system and are sceptical about the difference that government reforms will make,” said CBI deputy director-general, John Cridland.
"In fact, firms fear that legislation to be introduced on age discrimination will make matters worse, sparking an explosion of employment tribunal cases. In the current compensation culture, there is a risk that people will take advantage of a lack of legal clarity."
One case he raised involved a firm that had a security camera showing an employee leaving his shift, getting on his bike and falling off outside the factory gates.
"What he did then was to get up, get on his bike, come back inside the company's gates and fall off again," Cridland said.
Earlier this year, a survey by employment law firm Peninsula found that almost nine out of ten people said that they would be prepared to lie if it meant winning a case against their employer and a similar proportion said the main reason for them initiating a claim would be the prospect of a big payout.
The survey, carried out with the Pertemps employment agency, found that small businesses are particularly hard hit by these 'have-a-go' employees.
More than four out of ten companies with between 50 and 200 employees choose to settle with claimants rather than risk the expense of a tribunal, while fewer than one in five larger firms are prepared to do the same.
Pertemps chairman Tim Watts described the system as a lottery that is loaded against employers.
"It has become a kind of lottery and you might as well have a go, even if you have been sacked for some gross offence," he said.
"One man walked into one of our agencies and asked for work,"" he added. "We told him we did not provide the kind of work he wanted so he left without filling in a form completely. Then he sued me for wrongful dismissal!
"The court threw it out, of course, but that cost me £2,500."
Echoing one of the major complaints about the system, Watts added that it cost him at least £2,500 to defend every claim but that costs were never awarded against a false claimant.
Official figures reinforce this belief. A mere seven per cent of cases won by firms resulted in costs being awarded against employees
The new dispute resolution regulation that come into force on October 1 also get the thumbs down. More than four out of ten firms think they will fail to reduce the number of tribunal claims. Moreover, most feel that forthcoming age discrimination due in 2006 will lead to an "explosion" in tribunal cases.
But Brendan Barber, general secretary of the TUC, accused the CBI of getting "everything wrong" about employment tribunals.
"There is no long-term increase in applications, simply a one-off blip in cases about dress codes that could have been reduced to a single case if the law allowed group test cases," he said.
But while 7,000 of the 16,425 additional cases were accounted for by a single dispute over the dress code for workers in jobcentres, the trend is still upwards. The number of employment tribunal cases has increased by half since 1998, while a quarter of claims are mysteriously withdrawn by the applicant for no financial or other return before reaching a hearing.
Yet speaking as the annual TUC conference opened in Brighton, Barber attempted to place the blame for tribunal cases firmly in the employers' court.
"The best way for the CBI to reduce tribunal cases would be to encourage their members to recognise unions and agree fair procedures that can deal with difficulties without resorting to legal action," he said.