Employment Tribunals Act 1996 (Tribunal Composition) Order 2012
Debate between Lord Monks and Lord Scott of Foscote
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.
Lord Scott of Foscote
I apologise to your Lordships, and to the Minister in particular, for not being here at the commencement at this debate. I intended to be, because I remember seeing this statutory instrument when it came in front of the Merits of Statutory Instruments Select Committee, of which I am a member. I made some remarks about it then and I had intended to make the same remarks here. I hope that what I am going to say has not already been said by somebody else.
The point I wanted to make does not relate to the reduction to one year for the bringing of an application for remedy for unfair dismissal. Unfair dismissal is a statutory remedy, and as the two-year period was fixed by statute it can be changed by statute—or, as here, by statutory instrument. However, I do not understand why it is thought necessary to put up to two years the right of a dismissed employee to obtain a written statement of the reasons for his dismissal.
Whoever has been unfortunate enough to be dismissed, whether or not he has a remedy to make a claim for unfair dismissal—and after this becomes law he will not have a remedy—he will want to know why he was dismissed. He is going to have to go back into the labour market and try to make himself a better employee, not so subject to dismissal as he was with his previous employer. Common courtesy ought to entitle the employee to be given the reasons for dismissal. Why has he been sacked? He needs to be given a reason. There may be other courses of action he may have against his employer for which it would be relevant for him to know why he had been dismissed. I cannot understand the policy behind requiring two years’ employment, rather than one year as previously, for the entitlement to be told why he has been dismissed.
I asked that question when the instrument was in front of the Merits Committee. Nobody knew the answer. My recollection is that the secretary of the committee went back to the department but did not get anything like a satisfactory answer. Perhaps the Minister could help with this. Why is it thought necessary to reduce the right of a sacked employee to be told why he has been sacked? Why must he be employed for two years before he is entitled to that very basic right, which ought to be a matter of common courtesy anyway?