Following the green paper issued in December 1994, Resolving employment rights disputes, the government produced a draft Bill for consultation in July 1996 together with some changes to be implemented through secondary legislation.

However, this Bill was not mentioned in the Queen's speech and there is no certainty that it will be introduced before the election.Of particular interest is a power for industrial tribunals (IT) to award costs where an applicant has unreasonably refused the respondent's offer of compensation larger than the IT's own award or where the respondent has unreasonably refused to pay what the applicant has requested for settlement.

Parties will need to take considerable care over their offers and rejections.

Employers will want to know what costs an employee has incurred if it is known the employee has a weakish case.An employer is not obliged to make an offer, but if it rejects a proposal from an employee it must do so advisedly, particularly where the employee is being professionally represented.

This proposal is similar to the 'payments-in' procedure used in the ordinary courts where costs are awarded against a winning party if he or she wins a lower sum than is offered.However, it is more complicated in some respects as it will be necessary to evaluate degree of contributory fault, effect of procedural failure and degree of loss and mitigation.

While we have to await details, it is anticipated costs awards will become more frequent and higher.The Bill's proposalsAmong the draft Bills' proposals are:-- the power to award costs as described above which is intended to reduce the number of cases going to the tribunal, the thrust of the green paper and the draft Bill;-- a right of the tribunal to decide the case with the parties' consent on the basis of written evidence and without a hearing.

Employers with strong cases based on the facts may prefer to have their cases heard where they will be able to probe weaknesses in an employee's case.There is also a proposal for the tribunal to dismiss a case where there appears to be a precedent governing the facts.

In practice, this will only affect a small number of cases as there are very few cases decided on a precedent;-- a voluntary alternative of arbitration to a tribunal hearing.

The scheme would be administered by ACAS and the intention is that it would be quicker, cheaper, more informal and private.

In those circumstances it might be desirable on occasions for some cases to go to arbitration.Private arbitration is also proposed by means of a compromise agreement.

Details will have to be worked out but it is quite apparent that there is great uncertainty about the likely level of take-up of such schemes.It is impossible at this stage to suggest whether arbitration would be a desirable alternative to a tribunal; each decision would depend on its own facts.

This is obviously a very cost-driven proposal and is a reaction to the greatly increased case load and the consequent spirallin g costs.

It would only operate if both parties wanted it and the arbitrator would not be permitted to deal with legal issues such as whether there had been a dismissal or whether the applicant was an employee.

But the arbitrator would consider whether there had been an unfair dismissal and what remedy there should be;-- it would no longer be necessary to use a lawyer for a compromise agreement.

It would be enough to obtain independent advice, provided the adviser was insured;-- The tribunal would be able to award compensation for the fact that an employee had failed to use an internal appeal procedure.

An employer who does not permit an employee to use the procedure would be liable to pay greater compensation.The lesson for employers is simple -- ensure there is an appeal procedure and that it has been used whenever requested.

The government is not proceeding with the proposal that an employee be required to pursue a grievance internally before an application can be submitted.TimetableThis Bill contains controversial principles which mean that there is unlikely to be a speedy passage through Parliament and any Bill will fall if there is an election.

However, it is likely that a Labour government, if elected, would retain the arbitration proposal as an alternative to a tribunal hearing.