Added Tribunals (Employment Tribunals and Employment Appeal Tribunal) Order 2013

Lord Lea of Crondall Excerpts

Monday 8th July 2013 Lords Chamber

[Lord Lea of Crondall]

My Lords, it seems that after 13 years of improving the quality of the contract of employment, and I mean everything from holidays and maternity rights through to the quality of access to justice, we have been going backwards since 2010. A more unequal society is the same as a less just society; a society which protects the strong at the expense of the weak. Of course, this can all be reversed; we hope that it will be in a couple of years with the election of a Labour Government, and on this side of the House, that is obviously the constitutional remedy to which we look forward.

I will make another point about the culture within which these proposals keep coming forward, whether it comes from the Department for Business or the Ministry of Justice makes no difference. We have lost the culture of the department for employment where people understand what creates some sort of balance in the labour market. We are, after all, looking for a labour market in which the quality of employment and jobs go along with the quality of the contract of employment. One cannot have satisfying, quality work without this being looked at in a holistic fashion.

I take this opportunity to put on record that, despite the fact that the Minister personally has a great commitment to some of these matters, the Ministry of Justice is the wrong culture within which to have a sensible picture of where we need to be going so far as the quality of the contract of employment is concerned.

[Lord Young of Norwood Green]

My Lords, my noble friends have made the key points, but I want to emphasise a couple of issues. The Government wanted to do something really positive and constructive, as my noble friend Lady Donaghy said, and they started to do it by enhancing the role of ACAS and encouraging mediation. We support that wholeheartedly. It is the right way forward. It is positive, it is constructive, it does not discriminate against people regardless of their income and it does not swing the pendulum towards employers, as I firmly believe the current proposals do.

As regards reducing the number of claims or the claims that the Government believe should not be taken, it is interesting that the statistics demonstrate that the number of cases is coming down in any event. My noble friend Lady Drake brings a wealth of experience of employment tribunals and employment appeal tribunals. She pointed out that judges already have significant powers in dealing with vexatious claims, so that part of the problem could and should have been dealt with. In our view, this is an unfortunate piece of legislation that, as one of my noble friends said, does not reduce red tape. It adds complexity and tilts the balance against workers. I agree with my noble friends that this order ought to be withdrawn.

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[Lord McNally]

If they are not, I will write and tell the noble Lord. The noble Lord also raised the question of whether the Government know what the impact will be. It is difficult to predict the impact that the introduction of fees will have on behaviour. It may be reasonable to assume that if people who are thinking about bringing a claim have to pay to do so, they will more carefully consider whether they wish to do so and their chances of success than they would if the process was free. If this is a valid assumption, we would expect the number of speculative claims—and therefore the number of claims overall—to fall. We will review the impact post-implementation to ensure that the remissions system acts to ensure that only those who can afford to pay fees do so. To ensure that the fee-charging process is simple to understand and administer, we will examine impacts on equality groups in the light of experience and will verify the amount of fee income raised.

The noble Lord asked how we will review fees. Fees will be kept under review as part of an ongoing review of fees across the justice system. The review will seek to ensure that the remission system acts to ensure that only those who can afford to pay do so. The noble Lord, Lord Beecham, asked if redundancy payments will be taken into account in a remission of application. No, this is considered a capital payment under the current scheme. We are considering whether to change this as part of our recent consultation on remissions.

The noble Baroness, Lady Turner, raised a number of matters. Let me make it clear: we do not want a frightened or submissive workforce, as she implied. We want a highly skilled, adaptable, highly productive workforce that can compete in the world. It is important that the noble Baroness understands that introducing fees into these tribunals is not an attempt to deter individuals from bringing claims, and we do not believe that the provisions in the order will do so. Given the importance of the issues at stake, we believe, as I said, that it is unlikely that fees alone—

[Lord Lea of Crondall]

The Minister says that it is not likely to deter people. However, the memorandum states that that is the intention.

[Lord McNally]

We will not play with words. Of course, numbers will fall, so in that sense it will deter people. It will enable people to make better-informed decisions about what they are doing.

I pay tribute again to the vast experience the noble Baroness, Lady Donaghy, has of ACAS. I believe that making ACAS a first stop is a step forward and one to be much welcomed. Like all Members of the House I always regret when we are not able to receive the wisdom of the noble Lord, Lord Sugar, in person, but I note that he is in favour of more conciliation. The noble Baroness asked if the introduction of fees undermines the aims of early conciliation. We do not believe so. Fees can encourage parties to resolve their disputes as early as possible. In addition, respondents will be aware of the financial implications of losing a claim, including the ability of tribunals to order them to reimburse a claimant’s fee. Therefore, if a respondent waits to see if the claimant pays the fee, it could increase the respondent’s own cost. The noble Baroness also asked if this is designed to prevent weak and vexatious claims. We do not intend fees to prevent claimants bringing forward claims they believe to be genuine. We intend only that users who can afford to do so should contribute to the cost. If fees were to discourage those bringing speculative claims from doing so, this would be a positive consequence.

The noble Baroness, Lady Drake, acknowledged that this is a simplified scheme, and that is to be welcomed. It neither tilts the balance against workers nor closes the tribunal door. The noble Baroness also made the point that it was particularly disadvantageous to vulnerable people. Our initial analysis suggests that BME groups, women, younger people and disabled people are more likely to fall into the lower income bracket, so these groups are more likely to qualify for partial or full fee remission. The Government believe that it is right and fair that users of the Employment Appeal Tribunal, as with the employment tribunals, make a contribution towards the cost of their case when they can afford to do so. There are clear public policy reasons not to place the full burden on the taxpayer to subsidise fully a user who has already had the benefit of a previous judicial decision.

The noble Baroness, Lady Drake, also asked how fees will incentivise business to settle if only the claimant pays fees. Businesses will be conscious of the financial implications of losing a case, as well as the wider power of the employment tribunal judiciary to impose financial penalties on businesses that act unreasonably. Businesses will also be aware of the power of the tribunal to order them to reimburse the fees paid by the successful claimant.

The noble Lord, Lord Monks, intervened to tell us that, quite rightly, unions will support their members. I think that he was unfair in dismissing the impact of the remissions scheme. He asked whether we are trying to introduce Beecroft by the back door. No, we are not.

Is the court remissions scheme suitable to be used in employment tribunals? Yes, the remissions scheme is based on an individual’s ability to pay and the principles are the same as those that arise in the civil courts.

I fully acknowledge the point made by the noble Baroness, Lady Whitaker, that discrimination occurs in the workplace. That is why we need employment tribunals. There is a danger in overstating the impact of the decisions that we are taking tonight. I take on board the comments that have been made; however, as the noble Lord, Lord Young, said, this will enhance the role of ACAS. The truth is that people who wish to resolve an employment dispute have access to an independent tribunal, which is part of a justice system that is highly respected throughout the world. However, proceedings before the tribunals are costly and the Government believe that it is unfair that taxpayers have to shoulder all of that cost. To share the burden, we are proposing to charge fees to cover about a third of the cost of the tribunal. That, it seems to us, is both reasonable and right.

Those who can afford to will pay a fee dependent on the claim type they are bringing. Because of the remissions scheme we will put in place, no one should be denied access to the tribunal because they cannot afford it. The fees and the safeguards that we have built in represent a fairer way to share the costs of tribunals while fully preserving the principle of access to justice. I commend these orders to the House.