Rayner's workers' rights to ‘flood broken courts with spurious claims'
Official statistics show the logjam of employment tribunal claims brought by individual claimants jumped by 32pc in the year to March to 45,000 – as the number of new claims far outstripped those being settled.
The Ministry of Justice also said an increasing number of tribunals were now being settled as claims continue to flood in.
Craig Beaumont, executive director from the Federation of Small Businesses (FSB), said the Deputy Prime Minister's pledge to strengthen worker and unions rights risked triggering an avalanche of additional tribunal claims.
Labour's Employment Rights Bill will hand staff the right to take employers to tribunal for unfair dismissal from day one, instead of needing two years of employment before qualifying.
In addition, tribunal claims can now also be brought without charge, after fees were scrapped following a 2017 Supreme Court ruling.
Mr Beaumont said: 'The employment tribunal system was already swamped before this sustained surge in the backlog.
'With no extra resources allocated at the spending review, a broken system could be opened up by the Employment Rights Bill funnelling in spurious claims from day one of unfair dismissal.
'Facing a two-year wait, small employers will be pressured to settle to get rid of a vexatious claim even though they have done absolutely nothing wrong. Small businesses costs and stress are rising.'
Mounting backlog
It came as the FSB revealed that its legal advice line took a record 13,529 calls from bosses in the first three months of the year, up 10pc from 12,261 in the previous quarter.
He noted that while Rachel Reeves had allocated £450m for the Courts service – including the Crown Court and the Criminal Courts – no money had been allocated to tribunal courts.
The mounting backlog comes despite a pledge from ministers to review the current system to ensure it 'works better'. Employment tribunals are meant to be a last resort, but claims have surged over the past couple of years.
At the same time, worries are mounting about the broader impact of the bill on growth and jobs at a time when they are already grappling with higher taxes that kicked in from April.
Increases in employers' National Insurance (NI) contributions and the lowering of the threshold at which they are paid has already caused some companies – particularly in sectors such as retail and hospitality – to reduce hiring and investment, while some have cut swathes of jobs already.
More than seven in 10 chiefs believe Ms Rayner's bill will have a negative impact on the British economy, a recent survey carried out by the Institute of Directors found. More than half said they would be less likely to hire new staff.
Last month Rupert Soames, the president of the Confederation of British Industry (CBI), said it would make companies less willing to recruit people with 'spotty' CVs and those receiving benefits.
A Government spokesman said: 'Through our Plan for Change, this Government is delivering the biggest upgrade to workers' rights in a generation, which will improve workplace relations and reduce the need for tribunals and strike action.
'Under the previous government, strike action alone lost billions of pounds for the economy and saw more lost days of work than any year since the 1980s.
'We are working hard to reduce the outstanding Employment Tribunal caseload and improve productivity, including by diverting some cases away from tribunals and recruiting additional Judges.'
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