Business representatives have reacted angrily to proposals by the coalition government to fine employers up to £5,000 if they lose an employment tribunal case.
The plans, which are part of a raft of new proposals intended to reform the tribunal system, would see employers who lose cases having to pay the Exchequer half the amount of the total compensation awarded to the employee over and above the payout itself. A minimum payment of £100 and an upper cap of £5,000 are currently being considered.
The proposals were put forward in a document entitled "Resolving Workplace Disputes Consultation", which was published by the Department for Business, Innovation and Skills (DBIS).
The DBIS explained: "While we recognise that business will be opposed to such a proposal, we take the view that it will encourage employers to have greater regard for what is required of them in law and, ultimately, will lead to fewer workplace disputes and employment tribunal claims."
However, the proposals have been strongly opposed by businesses, who fear that such a "double jeopardy" system would incur extra costs at a time when the economy is already in a treacherous state.
Many see it as effectively a tax on businesses who make mistakes, and will lead to further pressures for companies to settle claims out of court even if they are spurious in order to avoid mounting tribunal costs.
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