Employment Tribunals Act 1996 (Tribunal Composition) Order 2012
Debate between Lord Monks and Lord Cope of Berkeley
Lord Cope of Berkeley
It depends on what he has been dismissed for or what the argument is about. Let us not forget that he still has a lot of rights which can take him to a tribunal; for example, a whole lot of things can apply if the dismissal has anything to do with gender, sexual orientation or any of those things. But there is the question of whether an individual will fit into and is necessary to the firm. The Minister referred to training. Whether the individual concerned has worked out as both sides had hoped is also extremely relevant. All that is important. No one is taking away the ultimate right of unfair dismissal. All we are doing is shifting the one year to two years, as has been outlined.
On the composition, I entirely agree with the noble Baroness who said that originally the idea was that tribunals would be rather informal. Unfortunately, it has not quite worked out like that. This issue has become more complicated and more judicial. I disagree as regards whether having more people on the Bench, as it were, makes it more judicial or less judicial. One can look at that in different ways. However, the intention is to make it easier to arrange sittings, particularly when they have to be rearranged, as everybody knows happens from time to time. This measure will help speed up the process and in so doing reduce costs not only for the Government but for the businesses and trade unions that are involved, as they will know where they are. It is hedged about with safeguards, particularly the big safeguard that either side can request a full tribunal with appropriate lay members. That can be granted, and no doubt often will be granted when there is reason to do it. Some cases will be speeded up by this process. Therefore these two measures are small—I do not claim that they will change the world overnight—but useful improvements to the system, particularly in the interests of allowing small businesses to employ more people.
Lord Monks
My Lords, the UK has the third most flexible labour market among the OECD countries. I would like to explore what that means. Does it mean that we have the third best labour market in the OECD? I am afraid that it does not. Does it mean that we have the third most productive labour market in the OECD? It does not at all. Does it mean that we have the third best trained labour market in the OECD? It certainly does not. However, it does mean that we are in third place in terms of employers finding it easy to fire people unfairly and get away with it. It also means that we are in third place as regards employers being able to exploit the vulnerable and those most at risk, who often comprise young people, women and those who have the least hope of securing stable employment.
The changes that the Government are proposing in these two orders might just get us into second place in the OECD most flexible labour market league table. They will promote poor practice as opposed to good practice and encourage people to do things quickly and peremptorily rather than properly. There are a lot of myths about dismissal legislation. We should not forget that these measures are about unfair dismissal. Employers will win the cases that are taken against them if certain simple procedural rules are followed, particularly in the areas of competence and behaviour. Equality cases tend to be more complicated but if an employer warns a worker about a competence or behavioural matter, gives him a chance to improve and then takes the final decision, the employer wins. That is the reality of the case law that has developed since those provisions were introduced for the first time by Lord Carr, as the noble Lord, Lord Cope, has just reminded us. Irrespective of whether he has a small or a large firm, an employer should follow the basic procedures of giving people a warning and a chance to improve before taking a final decision. That seems to me eminently sensible good practice.
The effect of these measures will be to take thousands of workers out of scope—but for what? I simply cannot accept the argument that employers are sitting there thinking, “I am not taking on another worker because the qualifying period is too short”. I do not believe that it will lead to more recruitment and more jobs—although, as the noble Baroness, Lady Donaghy, rightly pointed out, if you are offering that to employers’ organisations they are bound to say, “Fine, it is a free gift, we will take it”.
I agree very much with what has been said on this side of the table about lay members, who have played a useful role in tempering the application of the law with some understanding of the realities of the workplace. I am glad that the employers’ organisations tend to agree with the trade unions on this. With due respect to judges, the realities of the workplace have not been their particular area of expertise, and they acknowledge that they have been helped. This order makes it a grace and favour provision for the legal chairman to choose whether he needs the lay representatives. That seems undignified and unfair, and it weakens the employment tribunal system in a way that will not be fatal but certainly will do it some harm in the eyes of many.
These measures are shabby, squalid and rather mean-spirited. They will not do anything for employment or for the British labour market, except to make it that much worse than it is at the moment.