Employment Tribunals Act 1996 (Tribunal Composition) Order 2012
Debate between Lord Scott of Foscote and Lord De Mauley
Lord De Mauley
Exactly, and that is what we are trying to do.
The noble Lord, Lord Young, referred to the Government’s focus for growth on small and medium-size enterprises, for which the impact of a tribunal case is often greatest. This measure is intended to deliver a decrease in the number of cases being lodged against small and medium businesses. A two-year period will also give them enough time fully to assess new members of staff and to benefit from skills retention in cases where they might otherwise have dismissed an employee in borderline cases because they do not have the access to sophisticated HR and legal resources.
The noble Lord, Lord Young, also suggested that this could lead to an increase in the number of discrimination cases. I do not buy that assertion. Already, discrimination actions are frequently brought simultaneously with unfair dismissal claims. That suggests to me that, if a discrimination claim has a reasonable chance of success, it is already being made. Indeed, because there is a time limit on making such a claim, it is already now important that, if a discrimination claim is to have a chance of succeeding, it is made simultaneously, so we cannot see that reducing the availability of unfair dismissal as a route will lead to a significant increase in discrimination claims.
The noble and learned Lord, Lord Scott, asked about the changes to the written statement of reasons. The statement of reasons is linked to the qualifying period and the specified fair reasons for dismissal, which are set down in law. The objective of the qualifying period is to provide both parties with time to get the working relationship right. If it does not work out, this will not necessarily correspond to one of the specified fair reasons for dismissal. Of course, the employee can ask for a written explanation and I cannot see any reason why an employer would not provide it.
Lord Scott of Foscote
Would not a reasonable solution be to say that the period of notice to which the dismissed employee was entitled would not begin to run until he had been provided with a statement of the reasons for his dismissal?
Lord De Mauley
Perhaps I may take that back to the department. I cannot give the noble and learned Lord an answer immediately, but I will write to him, if I may, on that. I am grateful to him for the suggestion.
The noble Lord, Lord Jones, spoke about SMEs taking on employees. He is absolutely right to focus on the benefits that this measure might bring. If every small business took on just one more person, there would be 4 million more people in employment.
The noble Baroness, Lady Gibson, and the noble Lord, Lord Young, pointed to BIS’s survey, which shows that 6 per cent of business view regulation as a barrier to recruitment. In fact, the SME Business Barometer asked small businesses what their main barrier to growth was. The survey does not show that businesses are not concerned about regulation, but business responses to consultation and employer representative surveys on the matters that we are discussing today clearly show that dismissal rules are a concern when recruiting staff.
On the draft Employment Tribunals Act 1996 (Tribunal Composition) Order 2012, calls for reform of the employment tribunal and the wider employment law landscape are not new. In so far as the role of lay members is concerned, Michael Gibbons recommended to the last Government in 2007 that they should review the circumstances in which employment judges can sit alone in order to ensure that, as my noble friend Lord Cope said, value is maximised. The British Chambers of Commerce recommended in 2010 that lay members should be abolished. Since then, survey evidence suggests further support for reform in relation to unfair dismissal hearings. For example, 87 per cent of clients responding to Pinsent Masons’s 2011 employment tribunal survey supported the Government’s then proposal to allow judges to sit alone in simple unfair dismissal proceedings. Academic research from Greenwich and Swansea includes some interesting data. For example, despite perceptions from judges—the noble Lord, Lord Monks, specifically referred to this—and members that members add value in unfair dismissal cases, the number of instances where panel decisions were anything other than unanimous was very small. Across a sample of 191 judges who all hear cases on multiple occasions, there were only 77 majority decisions, of which 60 had one or other of the lay members as the dissenting voice. Given the safeguards built in, with judges retaining the option to determine whether lay members are required in order to deal with the case justly and with judicial decisions made against statutory criteria, including an assessment of the wishes of the parties, the additional flexibility would allow the tribunals to obtain best value for money when deploying lay member resources.
Employment judges are already permitted to sit alone in a range of proceedings, including claims for breach of contract, unauthorised deduction of wages, certain redundancy and national minimum wage complaints, and “holiday pay” cases. While the range of such cases will increase under this order to include unfair dismissal cases, the use of lay members will continue. There is no plan to remove the role of lay members in employment tribunals entirely. The Government recognise and value the expertise which they bring to the system. This order is about replacing prescription with flexibility. It costs the taxpayer more than £80 million a year to fund the employment tribunal system. Lay members account for about £10 million of that sum. It is right to look at how the system deploys and utilises the expertise lay members bring so that they are deployed where they are most needed.
The noble Baronesses, Lady Turner and Lady Donaghy, referred to the fact that the Trades Union Congress believes that the proposal to remove lay members from unfair dismissal cases is a step too far. The TUC asserts that the Government want to remove lay members from unfair dismissal cases, but that is not the effect of the order being debated. As I have said, this order gives judges discretion. Lay members can and will be deployed if they add value, but judges will be able to sit alone wherever that would be better. Where lay members would not add value, it is not right that inflexible legislation should mandate their deployment anyway.
The noble Baronesses also referred to the fact that 63 per cent of those responding to the consultation opposed it, which I acknowledged in my opening remarks. Our consultation was not a referendum, nor should government consultations ever simply turn on weight of numbers alone. We set out proposals and looked to find evidence on the substance. Nothing that consultees said persuaded us that employment judges are not best placed to determine how an unfair dismissal case should be determined, particularly when it is the judge who has the circumstances of the individual case to hand, and not your Lordships when considering framework legislation. We acknowledge that there are some unfair dismissal cases, such as those where there is a significant dispute around the facts of the case, which might be more appropriate for a full panel to hear. Indeed, this was accepted in the consultation paper and our response document. But there will equally be claims which an employment judge sitting alone will be perfectly well qualified and able to determine.
The noble Baroness, Lady Prosser, suggested that there was a risk that employment judges are insufficiently in touch or in tune with industrial good practice. Employment judges come from a wide variety of backgrounds and many have practical experience of managing staff. The fact that a judge might not be in tune with industrial good practice does not necessarily make them less likely to be able to assess evidence. What is critical, irrespective of the nature of the proceedings, is that the person making the determination is able to assess the evidence presented to him or her. Employment judges are trained specifically for this purpose and they carry out their functions to the highest of standards. In fact, the academic research from Greenwich and Swansea suggests that lay members may not always have relevant and recent experience in industry themselves. Indeed, it reported that there was a broad perception that they had less direct workplace experience than previously may have been the case.
My noble friend Lord Hodgson asked whether it was the Government’s view that judges sitting alone will speed the process up. We certainly intend that it will. We will be monitoring that closely. The noble Baroness, Lady Gibson of Market Rasen, asked how one person can be better than three.
Agriculture: Dairy Industry
Debate between Lord Scott of Foscote and Lord De Mauley
Lord De Mauley
I acknowledge my noble friend’s point, but it will be up to the ombudsman to make these sorts of decisions. Industry tells us that there are grounds for cautious optimism in the dairy industry. The continuing decline in production has put pressure on buyers to pay more remunerative prices. Secondly, most major retailers now have dedicated groups of farmers supplying them with milk in return for premium prices.
Lord Scott of Foscote
My Lords, do the Minister’s answers apply simply to farms that produce milk by cows or do they apply also to the increasing number of farms where the milk is produced by goats?
Lord De Mauley
My Lords, I am answering in respect of dairy. I think that means principally dairy cows.