Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Lord Borrie Excerpts

Monday 19th March 2012 Grand Committee

[Lord Cope of Berkeley]

My Lords, perhaps I may start on something with which I agree. The underlying measures—the tribunals and the unfair dismissal legislation—were introduced by the Conservative Government in 1971 by our late, lamented colleagues Lord Carr of Hadley, who, sadly, died the other day. The basic set-up introduced at that time will remain. These are comparatively small changes to the way in which they operate. However, I am sure that we can all agree that job creation is extremely important at this time—as has been said from all sides, at different times—and that we will hear a lot more about that in the context of the Budget later this week, for example, regarding the growth strategy and all that sort of thing.

In my view this is also a small contribution in the same direction, particularly the qualifying period, which I am talking about at the moment, and which I welcome. I have had a lot to do with small businesses in my professional life, although that was quite a long time ago, and in my political life over the past few decades. The whole difficulty of running a small business by comparison with a large business is that the proprietor is on his own and has to think about a variety of things. A large business has a finance director to argue with the bank; a production director to deal with the mechanics of whatever you are producing and doing; a sales director who makes sure that customers are as happy as possible, and all that side of it; and a human resources director to look after the employment side and to make sure that even a small business does not trip up over some of the complicated employment law which we now have.

I am not complaining about the complexities overall. They have all been introduced for various good reasons over time. I have been involved in much of that in different ways and I understand why the various bits have been introduced. However, they add up to an awful lot of things for someone who is running a business to worry about. In that context, a proprietor has to worry about hiring new people, the difficulties of hiring new people and the problems that it may get him into. When he is uncertain about his markets, his finance and the state of his business, that is yet another thing to worry about. This qualifying period arrangement is a small movement to assist him to worry slightly less about that.

[Lord Borrie]

Does the noble Lord accept that after an employee has been engaged for some 18 months, it is right for that person to be arbitrarily dismissed with no legal remedy of any kind?

[Lord Cope of Berkeley]

It depends on what he has been dismissed for or what the argument is about. Let us not forget that he still has a lot of rights which can take him to a tribunal; for example, a whole lot of things can apply if the dismissal has anything to do with gender, sexual orientation or any of those things. But there is the question of whether an individual will fit into and is necessary to the firm. The Minister referred to training. Whether the individual concerned has worked out as both sides had hoped is also extremely relevant. All that is important. No one is taking away the ultimate right of unfair dismissal. All we are doing is shifting the one year to two years, as has been outlined.

On the composition, I entirely agree with the noble Baroness who said that originally the idea was that tribunals would be rather informal. Unfortunately, it has not quite worked out like that. This issue has become more complicated and more judicial. I disagree as regards whether having more people on the Bench, as it were, makes it more judicial or less judicial. One can look at that in different ways. However, the intention is to make it easier to arrange sittings, particularly when they have to be rearranged, as everybody knows happens from time to time. This measure will help speed up the process and in so doing reduce costs not only for the Government but for the businesses and trade unions that are involved, as they will know where they are. It is hedged about with safeguards, particularly the big safeguard that either side can request a full tribunal with appropriate lay members. That can be granted, and no doubt often will be granted when there is reason to do it. Some cases will be speeded up by this process. Therefore these two measures are small—I do not claim that they will change the world overnight—but useful improvements to the system, particularly in the interests of allowing small businesses to employ more people.