Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Lord Stoddart of Swindon Excerpts

Wednesday 28th March 2012 Lords Chamber

[Lord Cope of Berkeley]

My Lords, I will not repeat what I said last week in Committee but I want to emphasise one point, although I shall not do so as eloquently as the noble Lord, Lord Jones, has just done. Jobs do not exist automatically. In the small and medium-sized businesses with which I have been concerned they need to be created and people need to take risks in order to create them, borrowing money and so on and putting their own money on the line. Obviously they hope that that will be successful—sometimes it is, sometimes not—but they need to be creative. As I say, jobs do not exist automatically and a tribunal cannot decide who does them in every case. This measure will make it just that bit easier for employers to create the sort of new jobs in small and medium-sized businesses that the noble Lord, Lord Jones, was talking about, and will make it more likely that they will do so. We need these jobs and less bureaucracy.

On the question of reasons, which the noble and learned Lord, Lord Scott, mentioned, I entirely accept what he said about good management practice but this is not just a question of good management practice; it is a legal requirement to produce a legal document that could form the basis of legal proceedings in the tribunal and so on. It is different from good management practice, with which I would concur, to say that there must be a legal duty to produce a legal document. That is the difference, and that is why this measure goes along with the extension of the amount of time in the statutory instrument. For those reasons, I support the statutory instruments as they stand and would not accept the amendments.

[Lord Stoddart of Swindon]

My Lords—

[Baroness Drake]

My Lords, my involvement with employment tribunals is recorded in the register of interests. Issues of fair or unfair dismissal are at the heart of workplace relationships. The first-tier employment tribunal is in effect an industrial court where evidence is assessed and decisions made on what is fair and reasonable conduct. It was intended that those decisions would be rooted in the industrial context and business realities.

That is why lay members were introduced and why they should be retained in the hearing of unfair dismissal cases. The presence of lay members brings to the employment tribunal system both legitimacy from the view of the claimant, and a significant component of knowledge of social relationships at the workplace acquired through observation and participation. Employment tribunal decisions that are made jointly by a panel of people who pool legal and other knowledge and experience are better for that range of skills. This is particularly important when, as has been said, one considers that unfair dismissal claims are often questions of fact rather than complex legal points.

The Government argue that allowing judges to sit alone on unfair dismissal cases will bring cost reductions and efficiencies. Removing lay members’ automatic presence from unfair dismissal cases will save around £140,000, together with perhaps a further £500,000 as a result of needing to recruit fewer lay members—a most modest saving when one considers the challenge being posed to the industrial jury concept when dealing with unfair dismissals. As for inefficiency, the timetabling of cases is as much driven by the availability of judges as it is by lay members.

The Government argue that employment tribunal judges are highly competent, which I fully endorse—of course they are, but that is not the issue. What is important is that the legitimacy and benefit of a tripartite industrial court system in unfair dismissal cases remain. That is important for a series of reasons. In unfair dismissal cases people often feel very hurt and upset and the dismissal may be a life-changing experience, whatever the merits of their case. The employment tribunal must decide the reason for the dismissal and whether the employer acted reasonably in treating that reason as sufficient for dismissal. Where a tripartite tribunal finds against a claimant, that is a powerful message: the lay and the legal are of a common view. However, they have had their day at the tribunal, and that tripartite tribunal has expressed a view. Where that decision is taken by a judge sitting alone, the claimant may well feel more minded to pursue an appeal. I believe that legitimacy in the industrial context will be perceived to be less valid without that tripartite system.