Employment Tribunals Act 1996 (Tribunal Composition) Order 2012

Lord Whitty Excerpts

Wednesday 28th March 2012 Lords Chamber

[Lord Whitty]

My Lords, I support both amendments, but I will concentrate my remarks on the second. In one sense, I apologise to the Minister for repeating some points that I made in the Moses Room. However, I find that his response—in the Moses Room, here today and in correspondence—does not address the issue that I raised. He claims that he is not basing the assertion that the raising of the threshold will increase the propensity to employ on anecdotal evidence. Yet he does not adduce any statistical evidence. The crude evidence is that the last time the threshold was lower, there was an increase in the propensity of employers to employ. That can be dismissed on the basis that it was part of the business cycle, but I am sure that the noble Lord’s department has statisticians who could take out that effect. We have, as the Minister proudly claimed, had some provision on unfair dismissal for 41 years, introduced in the 1971 Act to which those of us who were in trade unions at the time were, in general, opposed. However, the Government of the day thought that some balance was needed in terms of the attack on trade unions that that represented and individual employee rights. Therefore, they rightly inserted the right to claim against unfair dismissal.

Since 1971, either the threshold or the scope of that right has changed five or six times. There are therefore clear points where a change in the legislation could be related to the change in employment patterns. The Minister and his colleagues have failed completely to adduce any of that evidence and present it here today. Instead, they continue to rely on anecdotal evidence. When we were in the Moses Room, I put this down to listening too much to the saloon bars of the Home Counties; we may since have learnt that it may have been raised in the private dining room of No. 10. Either way, it is not statistical evidence. It is anecdotal and it is not proven that that is how employers actually behave. Until the Government prove that, they have not got to base 1 for justifying the macroeconomic effects of these changes.

For Joe Public sitting on the Clapham Omnibus, it is a pretty counterfactual argument to say that the best way of creating jobs is to allow employers to sack people more easily. Some economics is counterfactual, I agree, but without statistical evidence, it is difficult to argue in favour of these changes. That evidence has never been there. In the mid-1990s, there was the famous case of Seymour-Smith and Perez, which went all the way up to the European Court, about indirect discrimination in terms of the higher threshold. I am not arguing that case now, but I am saying that in the course of it, every court at every level, from the High Court right up to the European Court of Justice, accepted that the Government had not proven that, whether or not this was indirect discrimination, there was a bigger good in that more employment had resulted from an upward movement of the threshold. The Court of Appeal said that,

“nothing in the evidence, either factual or opinion … obliges … us to draw the inference that the increase in the threshold period has led to an increase in employment opportunities”.

That was the case 17 years ago. In the intervening 17 years nobody has proven to my satisfaction that the connection is there. The evidence was not there then and it is not there now.

There is a wider context to this, too, as my noble friend Lord Borrie has indicated. This may be the first of many changes in employment law that the Government are bringing forward, and their intention is probably to do so under statutory instruments. I appreciate that it is the convention of the House that we do not vote against statutory instruments, and we are not doing so today. I have a slightly different view, because in the list of government defeats under the previous Government, the first two were against me, so I do not have quite the same compunction as other colleagues. However, if a central tenet of primary legislation is undermined by a series of statutory instruments as the beginning of this series suggests it will be—3 million people taken out of the protection that primary legislation allows—and that continues, we have to look at the way in which the Government are using statutory instruments. I say no more on that.

The other, wider, point, as my noble friend Lord Beecham said, is that we are talking about a vulnerable subset of the population—people who have been employed for a relatively short time, most of whom, regrettably, do not have the protection of trade unions—which is excluded from the basic right not to be unfairly dismissed. This is part and parcel of other legislation which the Ministry of Justice rather than BIS is bringing forward. We have excluded from access to legal aid not only issues of employment but of housing, social security, industrial injuries, for the most part, and industrial diseases—all of which disproportionately affect the most vulnerable elements of our society.

In his opening the remarks, the Minister said that it is vital that the justice system is fair, independent and must not be compromised. I agree—but if you cannot get before a court or a tribunal in the first place, however good and balanced the court and tribunal systems may be, you are being discriminated against. The combination of taking away employee rights in this legislation and taking away access to legal aid in the Bill we regrettably passed last night is a severe restriction of the access to justice.

I fear that those of us who hoped for a relatively liberal Secretary of State at the Ministry of Justice, and a very liberal Minister in this House from that department, will be disappointed. The Ministers’ epitaphs will be that they excluded significant sections of the most discriminated against population from access to justice. That is a bad epitaph for both the parties opposite. I hope that this legislation will not be an additional contribution to that negative effect.

[Lord Monks]

The difficulty with making changes through statutory instruments is that they convey the impression that the changes being made are minor and of a technical nature. However, these changes are not technical and they are certainly not minor. As the noble Lord, Lord Whitty, said, 3 million people will be taken out of the scope of unfair dismissal legislation and protection. That is a major change which will have a major impact on the British labour market.

Why is this happening? The justification from the Government is that it will aid job creation. Have any employers said, “If you make that change, we will take on more people”? Have they given any undertakings or promises? Of course they have not. This is all in the impressionistic world and it is a matter of conjecture whether anything will change. I do not believe that it will have anything other than the most marginal effect on employers—and I know a lot of employers—but it will have more than a marginal effect on those 3 million workers, or at least some of them. In most jobs—there may be exceptional ones—you do not need more than a year to check whether or not a person is suitable. Probation periods are rarely longer than one year.

Nor is an employer likely to be found guilty of unfair dismissal if a worker does not first achieve and then maintain the required standards of competence or behaviour. Provided that a warning is given, the employer will not make the minor procedural mistakes that the Minister warned about in his moving remarks. I do not mean “moving” in an emotional sense—I wish to make that clear—but in moving the Motion. Bad employers are being given carte blanche for an extra year and the effect will be a rise in insecurity and grave injustice.

Cutting the role of lay members is not a minor issue—this is a step towards a tribunal becoming a full court, with a judge on his own. That will be a daunting prospect for many applicants, which is softened at the moment by the fact there are lay people with some understanding of their world of work. That is not a criticism of judges, for whom I have a lot of time generally, but we will miss a tremendous amount of experience in tribunal hearings because of this change.

As others have said, these may be the first two steps in implementing some of the ideas that are circling around the Beecroft report. We have not seen the report yet, but this venture capitalist has been let loose like a bull in a china shop in the delicate field of employment law. I ask the Minister for an assurance that if any changes are to be made in the future in employment law, they will not be smuggled in through the statutory instrument route but will be a matter for primary legislation so they can have a proper debate and proper exposure in this House.