The government’s new Employer’s Charter will give employers more confidence to hire staff, according to Prime Minister David Cameron.

Key proposals set out in a consultation document published today include:

• Giving businesses greater confidence to recruit new staff by increasing the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years
• Encouraging parties to resolve disputes between themselves as soon as possible – requiring all claims to be lodged with Acas (Advisory, Conciliation and Arbitration Service) in the first instance to allow pre-claim conciliation to be offered including the introduction of settlement offers to encourage parties to make reasonable offers of settlement to avoid Tribunal hearings and encouraging parties to consider other forms of early dispute resolution such as mediation
• Quickening the tribunal process – extending the jurisdictions where judges would sit alone to include unfair dismissal, introducing the use of legal officers to take on certain case management functions and taking witness statements as read
• Tackling weak and vexatious claims – providing Employment Tribunals with more flexible case management powers to deal with weaker cases in a way that does not mean disproportionate costs for employers
• Provide more information to cut reducing speculative claims, this would require more information on the nature of the claim being made and to include a statement of loss
• Remove the payment of expenses – encouraging parties to either settle earlier or cut the number of witnesses they call
• Introduce financial penalties for employers found to have breached rights so that there is greater compliance from employers to cut the number of Tribunal cases.

The government adds that in the next few months it will consider the requirements on employers when they take on staff to ensure that it is as simple and straightforward as possible, and intends to publish a model contract for employers shortly.

The prime minister says: “A critical element of the government’s growth strategy is to create the conditions which allow businesses, especially smaller businesses, to flourish and expand, by reducing regulation and maintaining a flexible and dynamic labour market.

“Today’s announcements on reforms to employment law are among the first conclusions of our government-wide growth review and highlight our determination to ensure that employment law is no longer seen as a barrier to growth, while making sure that employees and employers are treated fairly.

“Giving businesses the confidence to take on somebody new will be a real boost to the economy, and help generate the sustainable growth we need.”

Business secretary Vince Cable says: “Disputes in the workplace cost time and money, can affect morale, reduce productivity and hold back businesses. We often hear that knife-edge decisions about whether to hire new staff can be swung by concerns about ending up in an employment tribunal if things don’t work out. Today’s proposals address these concerns and should help give employers more confidence.

“But let’s be clear – resolving disputes earlier is also in the interests of workers. No one wants to spend month after month worrying about a claim – we need to make what can be an extremely stressful time in people’s lives as short as possible.

“In the business world there is also a common misconception that employment protections are all one-way – towards the employee. The Charter we are publishing today tackles this myth by setting out clearly some of the most important rights that employers already have in the workplace.”

Tom Hadley, the Recruitment & Employment Confederation’s director of policy and professional services, adds: “We have been calling for concrete action to help businesses, and this is a step in the right direction. REC members have flagged employment tribunals as a major source of unnecessary cost and bureaucracy, and so the government’s plans must deliver an effective filter.

“Reform of the tribunal system provides further reassurance to recruiters and their clients that the new regulations will not add significant risk to the supply of temporary and contract staff.”

Mike Emmott, employee relations adviser at the CIPD, says: “The Employers Charter debunks some of the common myths about the impact of employment law in the workplace and provides some useful guidance to employers which highlights that if they are reasonable, use common sense and are consistent in how they deal with their staff they are unlikely to fall foul of employment law.

“However, increasing the period of time before staff can claim unfair dismissal from one to two years’ service is unlikely to have a major impact on the number of tribunal claims because many claims for unfair dismissal are also linked to discrimination claims which are not limited by employees’ length of service.

“There is also a danger that the two-year threshold might be held to be sexually discriminatory – as the turnover rate for women is higher than that for men. Just such a challenge was brought in the 1980s when the two-year threshold was in place. It is hard to imagine that a return to the two years mark now would not be challenged in the courts on the grounds that it could exclude more women than men from claiming.”

The consultation document can be found here : http://www.bis.gov.uk/assets/biscore/employment-matters/docs/r/11-511-resolving-workplace-disputes-consultation