BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh

 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Commonwealth Games 2002

BBC Sport

BBC Weather

Wednesday, 22 August, 2001, 12:49 GMT 13:49 UK
CBI attacks compensation culture
Justice graphic
Fears of the growing compensation culture have caused British business leaders to hit out at the "punt-for-cash" culture.

We need all alternatives exhausted before anyone gets near a court room

Digby Jones, CBI
Business costs arising from employment tribunals have risen 50% during the past two years, according to the Confederation of British Industry (CBI).

The CBI has launched a new drive to make employment tribunals the last resort for resolving disputes in the work place.

But the unions have been quick to criticise the CBI, with the Trades Union Congress' John Monks saying that the CBI was "vastly exaggerating the extent of the problem".

Rising costs

The CBI estimates that legal, management and recruitment expenses for UK business will rise to 633m in 2001 compared with 426m in 1999.

TUC's John Monks
John Monks: the CBI is vastly exaggerating the problem

This means that basic tribunal costs rose four-fold during the past decade, with annual tribunal claims trebling to 130,000 cases.

And the total sum of money is millions of pounds more than this, as the cost of court settlements, productivity losses and staff cover are not included.

The CBI says that 64% of the tribunal applications come from employees who have not tried to resolve the problem directly with their employer first.

'Hardly big money'

But Mr Monks pointed out that the typical award for unfair dismissal was "hardly big money" at just 2,700, while just 130,000 people out of a workforce of 23 million had made tribunal claims.

CBI's Digby Jones
Digby Jones: worried that a punt-for-cash culture is taking hold

"This is a far cry from the climate of compensation the CBI claims the UK workforce is wrapped up in," he said.

But CBI chief Digby Jones warns that a punt-for-cash culture could be taking hold and that firms would be forced to pay out unnecessarily.

"While most cases are genuine, firms are worried that a punt-for-cash culture is taking hold. They are often faced with the choice of successfully defending a spurious claim, paying a big legal bill and using up valuable management time, or stumping up a few thousand pounds to make it go away," said Mr Jones.

Last resort

The CBI wants to ensure that employment tribunals are the last resort for resolving workplace disputes.

TGWU's Bill Morris
Bill Morris: punitive attack on workers seeking justice

The government has already unveiled some new measures, earlier this year, to limit time wasted by dubious claims.

Ministers are now thought to be considering an initial charge of 50 to register a case.

Bill Morris, general secretary of the Transport and General Workers Union, has labelled the proposed charges as a "punitive attack on workers seeking justice".

See also:

10 Jul 01 | Wales
Union pays out for 'abuse'
05 Jul 01 | UK
Ex-law chief wins tribunal
03 Jul 01 | UK Politics
Stammerer quits over role-play row
31 May 01 | Scotland
Compensation for call centre worker
20 Jul 01 | UK Politics
Ministers risk new union battle
20 Jul 01 | UK Politics
Tribunal fee plan under fire
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories