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.

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.

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.

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".