Enterprise and Regulatory Reform Bill

Debate between Earl of Glasgow and Lord Marland

Monday 10th December 2012 Grand Committee

[The Earl of Glasgow]

I apologise for interjecting at this stage. My issue is a little bit different but, after a lot of consideration, I did not know where I was going to put it. I consider it a very serious omission regarding the tribunal situation.

Two years ago I knew relatively little about employment law. As a small employer, however, I have recently—and for the first time in 35 years—been taken to a tribunal by one of my employees. This particular issue has been going on now for more than two years. I believe passionately—and this is one of the reasons for this Bill—that we should try to make these tribunals as unnecessary as we possibly can. In my case it is completely or very nearly unnecessary and I think that it is also a very great waste of money.

The Government’s intention is to try to make tribunals as unnecessary as possible. I am very much in favour of having ACAS involved and giving it the extra strength—which is part of the Bill already—to try to make them unnecessary. However, there is an elephant in the room which no one has addressed and which has purposely not been put into the Bill, and that is the question of discrimination.

One of the main reasons why claimants go to a tribunal when they could easily have settled at an earlier stage is that if they can prove discrimination, they can get something like 10 times as much compensation as they would have got if they had settled in the first place. To give an example again from my own case, the lady who I employed was laid off at four months. She thought that it was unfair that she was laid off and thought that someone else should have been laid off instead of her. She came with her union representative and talked to me about it. I made a deal with the union representative that I was going to pay her £1,500 and that was going to be the end of it.

About two or three days later she came back again and said that she was not satisfied with what her union representative had recommended and that she was going to go to a tribunal. It became clear to me that the reason why she was going to a tribunal was that she thought that she could prove discrimination. Discrimination in this case was that she thought that someone other than her should have been laid off and also that, as she had a disabled son, we were not taking enough consideration of her disabled son. This case is still carrying on. It has been over two years and we still have not resolved it. It strikes me as unbelievably wasteful that this thing should not have been settled a long time ago. It is because of this discrimination issue.

I think that the Government and the Minister have decided that they do not want to involve discrimination in this because discrimination is governed by European law. I do not think that we are ever going to be able to cut down drastically the number of people going to a tribunal unless we address this issue of discrimination. A lot of lawyers, or the representatives of some of these claimants, are deciding to go to a tribunal because they think that they are going to get a lot more money because of discrimination. I ask the Minister to consider including at a later stage at least some reference to address this problem of discrimination.

[Lord Marland]

I am grateful to the noble Earl for giving me advance warning that he was going to raise that issue, and I am happy to deal with it in a moment. First, however, I must deal with the point raised by the noble Baroness, Lady Turner.

I think that there is some misunderstanding here. It is already the case that where a deposit is paid it is always refunded to the paying party unless a cost order is made by a judge. That is the case. Refunds happen whether a case continues to judgment or is withdrawn part way through the proceedings, so there is always the case for recourse. In fact, the Government have accepted Mr Justice Underhill’s recommendations that there should be much more flexibility in the deposit-paying order regime. I hope that the noble Baroness is content that that deals with that issue. I do not know how this misunderstanding happened, but we can certainly talk further about it afterwards.

We recognise that there has been a trend for discrimination claims to obtain large awards. They are trailed as discrimination claims because people think they can get the sympathy of the judge in advance or during the case, because discrimination is not an attractive thing to be accused of—or to suffer from, much more to the point. Therefore, we as a Government are committed, working with the employment tribunals, case-by-case, to see how we can improve that. Obviously, as the noble Earl says, if we follow the procedure of going to ACAS first—and of course ACAS has many more resources and greater teeth, as applies to various earlier amendments—we can deal with this much more vigorously and much more fairly, as the noble Earl rightly seeks. I am happy to discuss the matter with the noble Earl later, as are my officials, but, on the basis of what I have said to the noble Baroness, I hope that she will withdraw her amendment.