The minister, already in trouble with the European Union over his treatment of disabled workers, aims to cut the number of cases of unfair dismissal or discrimination going to industrial tribunals. Frank Dobson, a senior member of Labour's shadow cabinet, condemned the plan as as a 'sacker's charter'.
With tribunal applications tripling in the past five years, Mr Portillo is considering 'streamlining' the system of workplace justice in the name of economy and reducing delays. An internal review of the 30-year-old system landed on his desk last week. It includes new measures to filter out so- called 'hopeless cases' and allow full-time, pounds 54,000-a-year tribunal chairmen to 'try' more cases on their own.
Ministerial concern at the cost of administering the system, which has more than doubled to almost pounds 27m since 1990, has been reinforced by headline-grabbing cases in recent weeks that have produced compensation running into tens of thousands of pounds - often triggered by rights stemming from European directives.
Mr Portillo created fury last week with his decision to end the priority rights of disabled workers to win government contracts, blaming European Union legislation. The new step is sure to prompt fresh concern.
Mr Dobson said: 'The Conservatives are not reviewing the system to bring about greater justice at the workplace. They are doing it to save money by reducing people's ability to go to tribunals. And the more people are denied access, the more people will be denied justice.'
Last year, more than 12,000 men and women successfully took their employer to a tribunal - half of them for unfair dismissal. The median award for being wrongly sacked was pounds 2,773; for sex discrimination,pounds 2,999; and for race discrimination, pounds 3,499.
In the controversial 'pregnant servicewomen' cases, the awards againstthe Ministry of Defence were much higher: half the applicants received between pounds 25,000 and pounds 100,000. There are nearly 2,000 similar cases still in the pipeline.
Mr Portillo will publish his plans for reform of the tribunal system in a consultative document- probably a Green Paper. He will argue that, as the number of applications has spiralled, the tribunal system is finding it virtually impossible to cope. Last year only just over half the cases were heard within six months.
After an injection of cash to hire more chairmen and make them work longer, that figure has now reached 72 per cent. But some still wait up to two years before getting a hearing.
Among the reforms being considered by the Department of Employment are chairmen sitting alone to try cases, dispensing with their 'industrial jury' of two members drawn from employers and employees, and changes in the vetting of applications to weed out 'unrealistic' claims.
There would be further financial deterrents, either by extending the pounds 150 discretionary deposit that can be demanded, or allowing a 'payment into court' to discourage vexatious litigants; more conciliation through Acas to allow cases to be settled 'out of court'; and tribunals would be allowed to compel companies to take back dismissed employees, rather than pay them compensation.
TheCitizens Advice Bureaux are apprehensive about the reforms. Margaret Dale, manager of a CAB legal unit in Birmingham, said: 'You need a balanced view of the evidence. You need three people.' Most dismissed workers could not afford to put up a deposit, she said.
But the Federation of Small Businesses, whose employer members account for most of the cases going to tribunals, welcomed the idea of tightening up access. A spokesman, Stephen Alambritis, said: 'We think it should be harder. Applicants taking their employer to court should put their money where their mouth is. The pounds 150 deposit should be mandatory.'
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