Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Baroness Turner of Camden Excerpts

Monday 19th March 2012 Grand Committee

In the current climate, any job created is good for the country and anything to lighten the load on businesses must be welcomed. So, too, should any measure that contributes to a more efficient and fair employment tribunal process. I am confident that these orders will help to do precisely that. On that basis, I commend these orders to your Lordships.

[Baroness Turner of Camden]

My Lords, I will speak on the two orders dealing with employment rights. I say at the outset that I oppose both of them. The first provides for an increase in the time that an employee must be in employment before they can claim unfair dismissal. At present, the employee must be in position for one year. The order increases this to two. It is not at all clear why. Surely it is possible for an employer to assess within one year whether an employee is suitable. Increasing the time to two years could involve difficulties, particularly for young people. Many people younger than 24 have not spent as long as two years in one job because of the current employment situation. I see no reason for the increase—and the majority of consultees disagreed with the proposal.

The second order seeks to remove lay representatives from tribunals, so that they will take place with a judge sitting alone. The reason for this proposed change is also unclear. It is opposed by the TUC, the CBI, the Engineering Employers Federation and Citizens Advice. The Government’s own paper states that of the consultees—there appears to have been some consultation—only 33 per cent were in favour of the proposal and 66.5 per cent were against. Surely it is understood that job loss, particularly for older people—and many of those involved are over 45—is a disaster not only for the employee but for their family, as they will probably face a long period of declining living standards and perhaps a reliance on benefits. If the dismissal is felt to be unfair, the trauma is even greater.

When industrial tribunals were first established, it was felt that cases could be heard in a relatively informal way, with lay people involved who had a knowledge of workplaces, and with a judge in the chair. It was thought that employees might not need legal representation since the hearings were such that the employee could represent himself or herself. A judge sitting alone would create a much more legal atmosphere—and of course, under the legal aid Bill currently before the House, no legal aid will be provided. I believe that the Government believe that more cases are likely to be lost in the set-up that they propose. I believe that this is part of a long-term project to decrease employment rights that have been built up over the past century.

The intention is that eventually lay people should be removed from the EAT—the appeal court—which will remove from the system lay people who have a knowledge of both sides of industry and commerce. It should be noted that organisations with a knowledge of the system believe that lay people provide a very useful element, bringing to bear workplace knowledge and often knowledge of local labour conditions in a way that a judge sitting alone may not do. Again, the Government intend to make it as difficult as possible for an employee to utilise the rights that they have, for which previous generations strove. Moreover, the paper that was issued indicated that the intention was that people would have to pay for the right to have a hearing. That, too, I oppose.

We have a low-wage economy in this country, and the Government are aware of that. Because employment is often badly paid, the benefits system supports low wages. Taxpayers are supporting employers who pay badly. Therefore, employers do not need the extra help of having employment rights removed because they already have the assistance of low wages. Should employees simply put up and shut up? Are working people simply disposable? Should we go back to the conditions that existed at the start of the last century, when employment rights were almost non-existent? The orders are a step in that direction. They are not acceptable and I oppose both of them.

[Baroness Donaghy]

My Lords, these are two shabby little measures that will lead to the further juridification of employment tribunals and encourage lazy management. I speak as someone who was a member of what used to be called the industrial tribunals. It is amazing how long that brand word has lasted, because even now, years after that name ceased to exist, a lot of people still call them “industrial tribunals”. I was a member from 1974 to 1989, a period of 16 years, when the whole employment regime was simpler. I acknowledge that employment law has become a lot more complicated, particularly in the area of equal rights. Nevertheless, I do not believe that that is an excuse for further eroding the role of lay members. I honestly believe that there have been attempts to undermine their role for the past 25 years. Every time a new Government come into office, the filing cabinet is opened, the file is dragged out and the new Minister is asked, “Can we do something about these lay members? They are very expensive and untidy. We need three phone calls instead of one. It would be much neater and tidier if we could get rid of them altogether”. Time and time again the TUC and the CBI have acted in unison and tried to indicate that the world of work is different from the world of the judiciary, and have said again and again that this would be a backward measure. I hope that they will say the same thing again this time.

I also speak as a former chair of ACAS, from 2000 to 2007, so I do not have any romantic feelings about employment tribunals. I fully acknowledge that they represent a failure of employment relations and that there is not always a similarity between employment legislation and employment relations. Sometimes they are the same, but as often as not they are different. When a case has to go to a tribunal, it represents a failure of employment relations, which is why the role of ACAS is so important. In fact, it diverts the majority of cases away from the tribunal service by persuading the employer to negotiate or the applicant to withdraw, or by giving advice in private to both parties as to how they can settle their case. If ACAS was not so successful then the tribunal system would have been swamped years ago. So I think we that can talk from certain knowledge about how important cases must be if they do end up before a tribunal. It is not always unreasonable people who come before one. I have never met anyone who willingly took their case to tribunal; they would always look for a different way.

You could almost say that the increase from one year to two years is traditional Conservative policy, just as decreasing it from two years to one year is traditional Labour policy. It could be left at that, saying that it is a purely political measure. But when you look at the world of work and the journals of the Chartered Institute of Personnel and Development— I am a fellow of the CIPD—they say everywhere that you need to talk to your new employee on a regular basis; to use the probationary period wisely; and if there is any doubt at all about that employee—if they are not proving to be adequate—you have an outlet. You can extend the probationary period in discussion and agree on how the employee can improve themselves. There is absolutely no need to use the precipice of unfair dismissal eligibility for the promotion of employment relations. The two things are entirely different. To use it in this case is almost predictable.

The Minister spoke of generating jobs and growth by making it easier to sack people. In reply I would say: I don’t think so. He also said, “We value the role for lay members”. I am sorry, but that has a hollow ring to it. I do not think that they are valued, and I think that this is a way of further eroding their role. They are regarded as a bit of a nuisance and, slowly but surely, their role will be diminished over the years. Of course business wants the extension from one to two years. It is a bit like asking a child if they would like two bags of sweets instead of one. It is hardly surprising. Even the Government’s impact assessment says:

“We are unable to infer the causality between Unfair Dismissal (UD) claims and changes in the qualifying period. There are a wide range of variables other than unfair dismissal qualifying period that will impact on the number of unfair dismissal claims such as claimant count inflow. In periods of recession when more workers are dismissed, unfair dismissal claims rise”.

There is no objective justification. This is a purely political measure and we will live to regret both these measures.