Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Lord Young of Norwood Green Excerpts

Wednesday 28th March 2012 Lords Chamber

Moved by

[Lord Young of Norwood Green]

As an amendment to the above Motion, at the end to insert “but that this House regrets that the order will risk the reduction of justice and fairness at employment tribunals, is opposed by both trades unions and employers’ organisations, and risks increasing costs through a greater number of appeals; believes that having an employer and employee representative on employment tribunals remains the right way to ensure a fair and just decision and process for claimants; and calls on the Government to place a report into the effect of the changes before Parliament 18 months after the approval of the order”.

[Lord Young of Norwood Green]

My Lords, I thank the Minister for his contribution, although that does not mean that I agree with it. I also thank him for the speed with which he responded in writing to the questions that had been raised but, again, I do not necessarily thank him for the content. I do not feel that he helped to clarify or justify the Government’s proposals, and that is why we have put down these amendments to the two orders.

The noble Lord, Lord De Mauley, said that people felt the introduction of lay members was motivated by further proposals. I do not think that you can really blame people for that, given that the Government have indicated that there are likely to be further movements in employment law. Even if you were not of a suspicious nature, the Beecroft report being delivered to No. 10 might at least have caused your antennae to wave about a bit in anxiety. Therefore, my question to the Minister is: can we expect more in this vein, with the view being taken that if only we lift these restrictions, somehow that will open the floodgates to employment and that the restrictions are the barriers that are really holding back SMEs or even large firms? We believe that that is a false analysis predicated on entirely the wrong views.

On the question of lay members, why do we believe that they ought to be a key part of the process? I do not intend to go through all the reasons as we had a full and frank debate in Grand Committee. When industrial—now employment—tribunals were first formed, the whole idea was that there would be a different approach and a different style. Along with that came lay members. What do they bring? They bring real knowledge and understanding of industrial situations. That is not to say that judges do not, but they do not have the same perspective. Will the proposal alter fundamentally the nature of unfair dismissal claims? We believe that it will. We believe that lay members play a fundamental and important role in the proceedings.

The noble Lord, Lord De Mauley, told me that the safeguards are there and are real. I listened carefully and the only safeguard that I could see was that it would be a judicial decision. That does not strike me as a real safeguard. I will not use the word “whim” but it depends on a view that lay members are not necessary in a significant number of cases. It must be significant or we would not be going down that road. If we are talking about preserving the nature of employment tribunals in which the views of people who have real experience in a wide range of industries and occupations, lay members play a vital role in ensuring that those views are taken into account and that the perspective of cases receives the widest possible analysis. Will it cost a bit more? Inevitably, it will, but we believe that it is justified in the circumstances.

On the second Motion, on the question of the length of unfair dismissal, it is true that there has been a history of different periods. We have gone from two years, to one year, to six months. Is the Government’s proposal justified? We do not believe that it is. Although it has fluctuated over a significant period, there is no evidence to show that it has had a direct effect on employment levels. That is why I said at the outset that it is predicated on the wrong analysis. Since the qualifying period was reduced from two years to one in 1999, more than 1.75 million jobs have been created in the UK, so it does not seem to be a barrier or impediment. The Minister quoted the chamber of commerce. Similarly, I could say that, interestingly, the SME Business Barometer survey asked 500 SMEs about the main obstacle to success. Top of the poll as the biggest obstacle was the state of the economy, with obtaining finance next. Just 6 per cent of respondents listed regulation as the main obstacle to growth.

In the correspondence that I received from the Minister, even he struggled to demonstrate that the unfair dismissal claims were the root cause of the problem. First, they cannot be disentangled. We cannot disentangle employment tribunal claims from the multiple claims; the Minister admitted that in the correspondence. We do not believe that the proposals are evidence-based.

I will quote again from the Chartered Institute of Personnel and Development. Surely it has some credibility when it states:

“Making it easier to dismiss staff without due cause is far more likely to harm the prospects of UK plc by fostering crude and out-dated attitudes to employment relationships that will put employees off from ‘going the extra mile’. Unproductive and disengaged workers will cost firms far more than the threat of tribunals”.

I believe that the institute is right about that.

If we want to give employers helpful advice, some things that the Minister suggested were right, such as more use of ACAS and mediation. However, the key for employers is how they treat their employees. We never suggested that training would be finished in a year; we are talking about continual learning in today’s workplaces. We are saying that the first year of employment is a long enough period to assess a new employee if the employer is making sure that they are being mentored and are responding to their training programmes. Are we really saying that at the end of that period an employer cannot assess whether an individual is going in the right direction and will make a worthwhile contribution to the organisation? My experience tells me that a year is a significant period of time.

This would signal the wrong route to employers. If we extend the unfair dismissal period, we will be trying to convince ourselves—without any evidence—that this will make employers take on more people. Of course we want employment to increase, but the way to encourage this is to ensure that we create the right economic conditions. I cannot resist saying to the noble Lord, Lord De Mauley, that while the focus is definitely on reducing the deficit—and I welcome the increase in apprenticeships—we still have not seen the growth that was predicted, the forecasts for which have been significantly reduced.

My final reason for moving the Motion was that I read the letter in reply to the noble and learned Lord, Lord Scott of Foscote, who made the reasonable request that an employee should be entitled to be given a reason for dismissal before they were dismissed. Unless the noble and learned Lord is more easily pleased than I am, he will be disappointed with the final paragraph, in which the noble Lord, Lord De Mauley, stated that the Government consider that requiring employers to give a written reason before giving notice would be an additional administrative complexity for them and would increase their costs. Does that send the right signal to employers about how to treat employees? Surely it is totally the wrong advice to give them. If they are handling their employees in a proper, structured way, and if they have the right HR procedures, they should have nothing to fear from an employment tribunal. On these grounds, I beg to move.

[Baroness Turner of Camden]

My Lords, I support my noble friend’s Motions. We had a wide-ranging debate on both these orders in Grand Committee. I opposed both, and I still do. Both orders undermine the employment rights that many people have fought for over the years. The first deals with the qualifying period and the right of workers to receive a reason for dismissal. The second provides for the removal of lay members from industrial tribunals that deal with cases of unfair dismissal. As noble Lords indicated in our previous debate, this has been opposed not only by the TUC and the CBI but by the Engineering Employers Federation and Citizens Advice.

Those who supported the Government in our previous debate did so, as I understand it, because they believed that if employers did not have to comply with employment laws, they would be able to employ more people. I doubt that. I oppose the orders for a different reason: I believe that, in a civilised community, the worker has rights which must be observed. An overriding one must be the right to continued employment unless there are very good reasons for this not to be maintained. Is it right that employees should simply be regarded as disposable? The loss of employment is often a disaster; not only for the employee but for his or her family. Many may face a decline in living standards and perhaps years spent on benefits. The trauma is even worse when the decision is felt to be unfair and if there is little alternative work available.

I agree that conciliation or mediation should be tried rather than immediate reference to a tribunal, but this is attempted nowadays and may not always work out. The opportunity to go to a tribunal should exist if such procedures do not provide an acceptable solution. The presence of lay representatives from both sides of industry or commerce, in addition to a judge who presides, produces an informal—and informed —atmosphere, conducive to a fair hearing by litigants. Most organisations familiar with our present arrangements, including many judges themselves, are supportive of the involvement of lay representatives.

The Government want to change the arrangements for hearing unfair dismissals so that the litigant will appear before a judge sitting alone. In other words, there will be a more legal set-up but no access to legal aid, since this is being removed by legislation recently before our House. There is no doubt that the Government believe there have been too many tribunal cases and that there will be fewer under their new proposals—and no doubt fewer successful cases. This is grossly unfair. There is no more important area of life than the work that most people do. Without it, life changes dramatically, not only for the individual concerned, but the family which he or she has to support. The loss, if unfair, should be compensated. The least the Government can do is examine how these changes impact upon people, which is what is proposed by my noble friend’s Motions. I hope the Government will accept them. If they are interested in fairness and justice, they can really do no other.

--- Later in debate ---

The orders have been consulted on publicly, affirmed in another place and debated at some length in your Lordships’ House, both in Grand Committee last week and today. They will have a positive impact on businesses, on the economy and—as the noble Lord, Lord Jones, said so eloquently—on those who would otherwise be out of work. Together with the wider package in which they sit, they will help make a difference by improving the efficiency of the system while maintaining a level of service to the users who rely on it to deliver justice. I commend the orders to the House.

[Lord Young of Norwood Green]

My Lords, I thank the Minister for his extensive reply. I will keep my remarks very brief. I see that I am getting support for that intent. It is not because I think that the issues are unimportant, but because my noble friends did ample justice to the reasons for both amendments to the Motions.

I will pick up a couple of points. The noble Lord, Lord Jones, invited us to leave ideology at the door. I like to think that we did in this debate, and that there were sincerely held views on both sides. All of us in the Chamber care passionately about youth unemployment. That is why the previous Government spent so much time rebuilding the apprenticeship programme, which was practically at death’s door.

Because we hold a different view on these issues, that does not mean that we do not care—we do care, passionately. However, the noble Lord is being over-optimistic if he believes that this measure, described by the noble Lord, Lord Razzall, as “modest”—again I must part company with him there—will somehow ensure that we do not have, in his view, any spurious claims. I still firmly believe that if you really want employers to protect themselves, the way is to have proper personnel procedures and not imagine that somehow they can deal with this at the 11th hour.

Because of the time, I am going to telescope my remarks to a large extent. I welcome one point by the noble Lord, Lord De Mauley. I do not know whether he called it a “review” or a “report” in a two-year period approximately, but I welcome it, even though we are totally opposed to these changes. As for the composition of the tribunals, we believe that this is a profound change in their nature. I am not going to test the opinion of the House on the first amendment to the Motion, not because we see this issue as less important, but mainly in the interest of time; it is for that reason alone. We are still fundamentally concerned about it; we are still not reassured by any means when the noble Lord tells us that there will be more to come. We believe that this will again diminish rights. However, for the reasons I gave, I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.