About Me

I’m a Barrister at Atlantic Chambers looking at various aspects of Employment Law including new developments in case law and legislation.

Government Consultation and Employment Tribunal Reform “Resolving Workplace Disputes – Public Consultation”

Background

The Government’s consultation document entitled “Resolving workplace disputes – public consultation” was released on Thursday 27th January 2011. The website describes the consultation as “a significant first step in taking forward the Government’s review of employment law”.

Clearly changes in Governments and political ideologies can bring about major overhauls of the Employment Tribunal system. A case in point is the qualifying service required of an employee to lodge an Employment Tribunal claim for unfair dismissal, which is presently one year. When the statutory claim of unfair dismissal was introduced in 1971 the qualifying period was six months, which was initially increased to one year in 1980 by the Conservative government, further increased to two years in 1985 and ultimately reduced back to one year in 1999 following Labour’s return to power in 1997.

From a practitioner’s standpoint it feels like there is hardly time to stop and catch one’s breath where employment law is concerned. In October 2004 we saw the introduction of the Statutory Disciplinary and Grievances Procedure. By the time we had come to grips with these new procedures and the litigation they spawned they were repealed in April 2009. More recently the discrimination legislation was repealed and re-enacted under different provisions within the Equality Act 2010.

The Employee Charter

As part of this consultation the Government has released an Employer’s Charter “intended to help employers understand what they can do in general”. XpertHR have described the Charter as “extraordinarily inadequate on every conceivable level”. For more information on the charter and its failings please see Darren Newman’s recently posted article. XpertHR have also produced a helpful FAQ on each of the eleven points of the Charter.

A summary of the changes proposed

I will attempt to discuss some of the proposed changes put forward by the Government within the consultation paper. This is intended only to be a brief summary, the full text of the consultation document is certainly worth a read.

Proposal – Claimants will submit key details of their claim in a shortened version of the ET1 claim to ACAS within the normal time limit which will stop the clock for limitation purposes once received by ACAS. ACAS will not decide whether the claim is in time or not but will date stamp the claim and let the Employment Tribunal later decide whether it was presented in time. There will then be a statutory period of one month for ACAS to attempt to conciliate the dispute.

My Comment – Sounds messy and would place an inevitable additional burden on ACAS. Last time an attempt was made to allow time for mediation prior to the formal presentation of an Employment Tribunal claim, by requiring a grievance to be raised and extending limitation from three months to six months for certain claims (in the form of the Statutory Disciplinary and Grievances Procedure) it failed miserably.

Proposal – The Employment Tribunal’s power to strike out a claim can be exercised at any hearing rather than exclusively at pre-hearing reviews, including by an Employment Judge sitting alone. This power can be exercised either on the Employment Tribunal’s own initiative or at the invitation of a party without hearing the parties or giving them the opportunity to make representations.

My Comment – Under the existing rules an employer has an opportunity to ask the Employment Tribunal for a Pre-Hearing to consider whether a claim has no reasonable prospects of success. I am surprised that it is suggested that the Employment Tribunal would be able to strike out claims “without hearing the parties or giving them the opportunity to make representations”. How could this be consistent with the Article 6 of the Human Rights Act 1998 entitlement to a “a fair and public hearing”? It would inevitably be argued that striking out a claim without hearing the parties or giving them the opportunity to make representations is neither “fair” nor “public”.

Proposal – A Respondent upon receipt of a Claimant’s ET1 will be able to submit an Employment Tribunal ET3 Response form, but rather than completing it fully, instead suggest that insufficient information has been provided to justify the claim continuing, and ask the tribunal either to Order the Claimant to (1) provide more information before a full ET3 form needs to be submitted potentially via an Unless Order (2) to strike out the claim on the grounds that it has no reasonable prospect of success.

My Comment – If this proposal was implemented how would an employer know when to present a full ET3 Response and when not to? I think it should only be a very rare occasion on which a claim should be struck out before an ET3 response has even been presented and considered. Surely a strike out application should only be considered once the Employment Tribunal have some appreciation of both sides of the story?

Proposal – The current cap on costs awards made by the Employment Tribunal to be increased from £10,000 to £20,000.

My Comment – The current regime does not mean that costs over £10,000 cannot be claimed by a party in Employment Tribunal proceedings but simply means that costs over £10,000 are assessed by a County Court, see Rule 41 of the Employment Tribunal’s Rules of Procedure. I think there’s a lot to be said keeping the £10,000 limit as costs is a specialised area with which some Employment Tribunals may not have a great deal of expertise, given the infrequency with which costs are assessed in the Employment Tribunal.

Proposal – A rule is introduced where either party can make a formal settlement offer to the other party or parties as part of formal Employment Tribunal proceedings backed by “a scheme of penalties and rewards, in order to encourage the making – and acceptance – of reasonable settlement offers”. As opposed to paying the actual sum of money into the Employment Tribunal, written details will be lodged formally with the Employment Tribunal and communicated directly to the other side. Compensation could be increased or decreased where parties have made an offer of settlement which has not reasonably been accepted. Where no award is made to the Claimant and a reasonable offer of settlement has been made to the Claimant, that offer could be used by the Employment Tribunal in considering costs to be awarded against the Claimant.

My Comment – I think this seems a fairly decent idea but I see it placing an additional burden on the Tribunal service. The proposal could also lead to employers placing more, sometimes undue, pressure on unrepresented Claimants with decent claims to settle for low sums. It does however have the potential to reduce the number of claims which progress to hearing.

Proposal – That witness statements are taken as read unless an Employment Judge directs otherwise in line with the Civil Procedure Rules and the EAT’s guidance in the case of Mehta v Child Support Agency [2010] EAT 0127/10/0511

Mr Comment – Good idea.

Proposal - To withdraw the payments currently available from the Tribunals Service to parties and witnesses in Employment Tribunal proceedings and to expect parties and witnesses to cover their own expenses.

My Comment – This proposal seems aimed solely at saving costs ahead of serving the interests of justice. This could mean that key witnesses are not called before the Employment Tribunal. The proposal may have a disproportionate adverse effect on employees as employers are more likely to be able to pay witnesses’ expenses.

Proposal – Employment Judges to sit alone in unfair dismissal cases unless the issues are complex, there is a lot of factual evidence to sift, or the parties express a clear desire for a tripartite panel.

My Comment – It is important in my view not only for lay members to sit on unfair dismissal cases to help resolve disputed issues of fact but to provide balance and the detailed industrial knowledge that not all Employment Judges will possess.

Proposal – Lay members are scrapped entirely from the EAT.

My Comment – This seems fairly sensible. I understand the Government’s point that appeals can only be based on errors of law and therefore no factual issues should arise for the Employment Appeal Tribunal to decide. It could be argued however that appeals are frequently made on the basis that the Employment Tribunal’s decision was perverse, i.e. a decision that no Employment Tribunal properly directed could have made. I think the assessment of perversity must at least to some extent be assisted by the lay members’ industrial knowledge and expertise, particularly if such industrial considerations formed part of the Employment Tribunal’s original decision making process.

Proposal – That general interlocutory work currently administered by the judiciary should be delegated to a suitably qualified legal officer. Such work would include adjourning or postponing hearings, exchanging documents, witness statements, requests for information, amending pleadings, the provision of expert evidence and/or the listing of cases for hearing.

My Comment – It does seem sensible to ensure Employment Judges spend their time on what they do best; hearing cases. I would be happy with this proposal as long as the legal officers were trained and competent in dealing with the interlocutory matters. It could be a good introduction to the Tribunal System for Employment Judges in training.

Proposal To add to the text of the Employment Tribunal’s Overriding objective the importance of “allotting to [each case] an appropriate share of the [tribunal’s] resources, while taking into account the need to allot resources to other cases” in line with the Civil Procedure Rules.

My Comment – Fine.

Proposal – To consult on a fees mechanism in the Spring in respect of charging Claimants fees for Employment Tribunal and appeals.

My Comment – Employees and Trade Unions will be understandably against this and the restriction this would place on access to justice. Clive Howard partner at Russell Jones and Walker stated recently within The Lawyer that “The introduction of a tribunal fee to be imposed on the claimant will raise an additional barrier to perfectly bone fide claims and will disproportionately affect the less well off”.

Proposal – To extend the qualification period for employees to bring a claim of unfair dismissal from one to two years.

My Comment – This would certainly put employees at a disadvantage but could also lull employers into a false sense of security whereby they may lose focus on employees’ employment rights and employment law generally. This could lead to employers facing more claims for automatically unfair dismissal, where an employee does not require any length of service to bring a claim and/or discrimination claims. For an excellent discussion regarding the impact of this potential change on both employees and employers I would recommend reading Laurie Anstis’ blog post from November 2010 entitled “What if the government increased the qualifying period for unfair dismissal rights?”.

Proposal – Financial levy penalties will be awarded against employers found to have breached relevant rights. Penalties would be payable to the Exchequer, rather than the Claimant. The penalty would be based on half the total award with a minimum of £100 and an upper ceiling of £5,000. Where a non-financial award has been made the Employment Tribunal would ascribe a monetary value to the same. The penalty should be reduced by 50% if payment is made within 21 days.

My Comment – I think most employers will view this as an additional tax on business. That said, employers will only have to pay if they have breached employment law. It is probably a fairer way of funding the Tribunal Service than charging issue fees to employees.

Proposal – Up-rating in terms of maximum Employment Tribunal awards and maximum values for weekly pay to the nearest £10 should be looked at as well as potentially using the Consumer Prices Index as opposed to the Retail Price Index for the same.

My Comment – I would be happy with any proposal to ensure that the increases are fair and accurately reflect the economy.

Conclusion

The reaction to the Government’s proposals in the short time since the consultation document has been released has been mixed. Employers seem to have welcomed the changes. Steve Radley head of policy at the manufacturers’ organisation EEF described the proposals as “a potentially welcome package of reforms to the employment tribunal system” in an article on PersonnelToday.com.

There are some proposals which could potentially reduce the number of weak claims which proceed to a full hearing, but at what cost? There are clearly elements within the proposals which unashamedly place the interests of justice as a poor second to reducing costs and which, if passed by legislation, will potentially make the Employment Tribunal process a more costly and intimidating course of action for employees. The proposals would seem to move further away from the original philosophy of Employment Tribunals to be “easily accessible, informal, speedy and inexpensive”[1]. In my view, if the Employment Tribunal is presently overwhelmed with claims then the regrettable truth is that additional funds need to be made available to the Tribunal service, as opposed to implementing ill-thought out and draconian cost cutting measures.


[1] Please see John K MacMillian “Employment Tribunals: Philosophies and Practicalities” [1999] 28 ILJ 33, 34

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