A rapidly expanding compensation culture
is placing a damaging burden on business, particularly smaller, owner-managed
enterprises, says Stephanie Smye, chairman of the Eastern Branch of the
Institute of Directors, which represents over 900 business leaders in
The number of applications to employment
tribunals rose from just 49,000 in 1989 to 113,600 in 1998 and 161,200 last
year. The Institute believes the situation will become even worse following the
introduction of the Human Rights Act on 2 October.
"Logically employers have not become
more oppressive in the past decade," said Miss Smye. "Such a huge
increase has been caused by massive expansion in employment legislation and
changes in social attitudes that encourage people to allocate blame and seek
She blames the increase on well-publicised
high pay-out cases that have prompted disgruntled people to take a chance on
making a claim - often encourages by 'no-win no-fee' promises from law firms. As
a result, 45 per cent of unfair dismissal claims are judged frivolous and fail.
In addition, many more case are being
brought on the basis of alleged work-related stress and depression, often
without regard to other lifestyle factors that may be influencing the
performance of an employee.
Meanwhile, employers are expected to
continue managing their businesses while suffering considerable anxiety, expense
and other associated losses caused by the threat of litigation.
"No responsible employer would ever
condone the ill treatment of employees," said Miss Smye. "However,
present attitudes that focus too sharply on employees' rights and employers'
obligations without acknowledging that employers also have rights and employees
have obligations are unbalanced and can only lead to distrust and suspicion in