Category Archives: Employment Tribunal Focus

Putting the tribunal service under the microscope.

Far reaching changes to Employment Tribunals are imminent

Far reaching changes to Employment Tribunals are imminent

The launch of the “resolving workplace disputes” consultation by the Department for Business,  Innovation and Skills (BIS) is described as being the next step in the Governments comprehensive review of employment laws. In reality the consultation sketches out a roadmap to fundamentally change the current tribunal system into a more business friendly model.

Proposals include: charging fees; increasing the cap on costs awards; increasing the level of deposit awards; and removing payments for the expenses of witness. These proposals will not go down well with Claimants and Unions alike; who will no doubt view them as putting barriers in the way of access to justice.

Some of the wide-ranging consultation proposals will be welcomed with open arms, including:

  • Encouraging parties to resolve disputes earlier (through ACAS, and implicitly through mediation);
  • Making strike out powers more flexible, with “procedural safeguards to be built-in;
  • Allowing Employment Judges to be able to issue a deposit order at any stage in the proceedings;
  • Introducing a mandatory requirement for claimants to provide a statement of loss in the ET1; and,
  • Shortening tribunal hearings by taking witness statements as read.

 The more controversial aspects of the consultation include:

  •  Introducing “fee charging mechanisms”. This is not set out in any detail however, the consultation includes the example of “where claimants lodge claims (and respondents choose to counter-claim), and/or for parties in claims that proceed to full hearing”. It does not seem to be envisaged that any fee will be charged when a Respondent submits its ET3.
  • Extending the qualifying period for unfair dismissal claims from the current one year to two years. The Government estimates that this will reduce the level of claims by 3,700 – 4,700 a year.
  • Introducing Legal Officers to deal with case management. The consultation seeks views on the “qualifications, skills, competences and experience we should seek in a legal officer”. 

 Lawyers and HR practitioners should note that the consultation also seeks views on the type of interlocutory work (which the consultation considers “could be undertaken by any competent person”) that might be delegated, so clearly this proposal will be expanded.  Under the proposal Legal Officers could be: experienced administrative officers; qualified lawyers employed as registrars or legal assistants; or a ‘junior’ rank of judge or judicial officer.

  • Introducing a rule whereby either party can make a formal settlement offer to the other party, or parties, as part of formal employment tribunal proceedings, “backed by a scheme of penalties and rewards”. The consultation proposes a system similar to the “Scottish Courts’ judicial tender model” (see how many English practitioners put that search term into Google!), and not a Part 36 model.
  • Removing payment of witness expenses. The Governments argument is that this will lead to a reduction in the duration of some hearings, as “only witnesses that are strictly necessary will be called”. Surely it is simply intended to save Government money. It is unlikely to be the main consideration for witnesses I would suggest that a greater deterrent to witnesses attending a tribunal hearing would be the necessity to take time off work to give their evidence.
  • Increasing the current cap on the level of costs that may be awarded from £10,000 to £20,000. The consultation emphasises that “it is not our intention to move towards a general costs-recovery policy”.
  • Reviewing the formula for calculating employment tribunal awards and statutory redundancy payment limits.
  • Increasing the current level of the deposit which may be ordered from the current maximum of £500 to £1000.
  • Extending the jurisdictions where judges can sit alone, allowing “more efficient use of lay member resource” – (it is noteworthy that this is not defined).  Subject to discretion, unfair dismissal cases to normally be heard by an employment judge sitting alone.

This may lead to a two tier level of tribunal judges, and does little to address the reality that many unfair dismissal claims often feature as just one strand of several claims. The annual statistics published by Tribunal Service show that for 2009-10 the average number of jurisdictional complaints per claim was 1.7. Could this be the beginning of the end for lay members?

  • Proposing that claimants submit key details of their dispute (using what will amount to a shortened version of the ET1 claim form) to ACAS within the relevant time limit.

It is proposed that ACAS will have no role in determining whether the claim is in time or not; they will, however, date-stamp the form on receipt, and that will then allow the Tribunal to decide whether to accept or reject the claim.  This dual process is likely to confuse many businesses.

The consultation envisages that the clock (for the relevant time limit) will stop once the claim is received by ACAS and that there will then be a statutory period of time (they propose 1 calendar month) for ACAS to attempt to conciliate the dispute.

Resolving disputes

The amount of claims lodged at the Employment Tribunal for the period 1 April 2009 – 31 March 2010 show that there has been a 56% increase in claims from 151,000 for the period 2008/2009 to 236,100 claims in 2009/2010; although it should be noted that those figures include multiple claims.

The role of ACAS

The aspiration in the consultation to urge employers and employees to work together to resolve workplace disagreements should be welcomed. Work place mediation will most likely be an area of real growth. The role of ACAS should rightly be heralded as a successful way of resolving disputes, as 70,600 claims were ACAS conciliated last year. 

The Government intends to give all potential claimants with access to pre-claim conciliation by ACAS – free of charge to all those who want it; and for ACAS to give claimants with information about what they can expect from a Tribunal, including the time involved and what a tribunal might award.

The key issue will be whether ACAS has adequate resources to deal with a likely surge in demand. Perhaps the proposed tribunal fees will pay for the service to be expanded? In my own busy employment practice it is increasingly clear to me that ACAS case workers have an almost insurmountable level of cases to deal with.

Philip Henson. Partner, Bargate Murray, and accredited mediator specialising in work place mediation.


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Filed under Ch ch ch changes, Costs, Discrimination in the work place, Employment Tribunal Focus, Government proposals, Legislative Changes, Mediation, Politics, Trade Unions

Serial litigants face risk of paying costs

The Employment Appeal Tribunal (EAT) has dismissed the appeals of “serial litigant” Mr. John Berry. 

Mr Berry brought (at least) four sets of proceedings in the Employment Tribunal complaining about job adverts which used terminology suggesting that they were targeted at younger people, for example by referring to “school leavers” or “recent graduates.”  The respondents were primarily recruitment agencies but also included potential employers.

 For example, in the Recruitment Revolution (“RR”) case RR advertised a job of “junior administrator/administrative assistant” on behalf of a client, indicating that it would be suitable for a school-leaver or someone who had recently taken A levels. Mr Berry responded that he was interested in the job but noted that they sought a school leaver who had finished A Levels, and that he is over 50 years old and passed his A levels many years ago and he “will assume therefore unless I hear from you to the contrary that there would be no point in pursuing this job application any further.’  Mr Berry never in fact applied for the job, despite an invitation to do so, which was reconfirmed in an email.

Mr Berry argued that such adverts were unlawfully discriminatory under the provisions of the Employment Equality (Age) Regulations 2006; without asserting that he was himself deterred by it from applying for the job.

Mr Berry did not attend the hearing (instead relying instead on written submissions), and the EAT was therefore not able to express a concluded view on his motivation for bringing the litigation.  Underhill J emphasised that the purpose of the Regulations is not to provide a source of income for persons who complain of arguably discriminatory advertisements for job vacancies which they have in fact no wish or intention to fill. He also gave the warning that those who try to exploit the Regulations for financial gain are liable to find themselves facing a liability for costs.

 Philip Henson,  comments:

 The management time, and legal costs, involved in defending serial (or vexatious) claims can be a significant drain on resources. It is worth noting that in several of Mr Berry’s claims he applied for a reference to the European Court of Justice, which clearly indicates that he was prepared to take his claims further. Costs orders can often be the best medicine to cure the perpetual headache of serial litigants.

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Court closures – Is Mediation the way Forward?

The Ministry of Justice has recently published several consultations which ask for views on whether to close 103 magistrates’ and 54 county courts that are deemed to be “underused” and “inadequate”.  The purpose of the consultation is to “modernise and improve the use of Courts in England and Wales[1]”. Read into that what you will.

Each consultation is divided up into separate geographical areas. The proposal for London is to merge the 28 existing Local Justice Areas into just 9, and to replace the current 20 outer London youth panels, and the Inner City Youth Panel, to just 9 Youth Panels. The arguments set out in favour of closure highlight the state of the Court buildings themselves and explain how existing court work loads may be redistributed.  For example, Acton Magistrate’s Court is described as being “104 years old and not fit for purpose[2]”, and it is recommended that it should close and its work be listed across other West London Courts. If the planned closures come to fruition then it will inevitably result in more pressure being placed on the surviving courts. 

But will the proposed closures and cuts stop there? I think not. I predict that the scythe will continue to cut this year, and beyond. The Ministry of Justice has been told to save £325m, and that gargantuan sum surely indicates that the pain is going to be spread around. The Tribunal Service is an Executive Agency of the Ministry of Justice and may be the next in line.  The business plan for the Tribunal Service[3] refers to an ongoing Performance and Efficiency Programme (PEP) requiring it to deliver a total of £8.2m in savings during 2009-10, rising to £12.4m in 2010-11.  

I predict that a direct consequence of these cuts will be that solicitors will increasingly consider the other weapons in the dispute resolution armoury; rather than using the traditional, court or tribunal system.

As we all know many litigants become fixated on having their ‘day in Court. Although once you have provided your client with a detailed breakdown of your likely costs (and you have explained the procrastinated time frame to even be listed for a hearing) their appetite for Court room battles may dissipate. I remain puzzled why mediation is not being embraced by more law firms and promoted to clients.

How many organisations would not jump at the chance to end a long running dispute quickly and cheaply without having to set foot into a court or tribunal? No client is going to thank you when they receive an invoice for several thousand pounds for litigation costs, if they do not obtain what they perceive as a fair result. Some workplace disputes may be resolved by getting the parties together in a room, allowing them to air their concerns/complaints and exploring their feelings; (bear in mind that this is frequently the first time that this has happened.) Consider this scenario during a workplace mediation: one party offers to apologize to the other, which is accepted, and the two parties then discuss ways in which they can work together more effectively, and their relationship is restored. No vicious personal grievance letters, no lengthy investigations into alleged misconduct, no costly litigation, just an early resolution. (Bliss!).

Mediation is especially effective if used early, before parties become entrenched in their positions. It can allow issues to be nipped in the bud.  In the context of workplace disputes it can be used in any situation from a disagreement between senior managers and support staff, threatened legal action, to conflicts with third parties such as office suppliers.  Mediation has a particular resonance in the workplace, and the process has already been embraced by BT plc, West Midlands Police, Salisbury Cathedral and the Ministry of Justice to name but a few.

A guide jointly produced by ACAS and CIPD[4] includes some poignant examples of how mediation has helped to resolve disputes in the work place, and indeed how it can be implemented. It is essential reading. Even cases sometimes considered to be poor candidates for mediation – such as personal injury claims – are in fact suited to it.

What is mediation and why use it?

Mediation involves a neutral third party bringing two sides together with an aim of facilitating an agreement. The process is flexible, and inexpensive when compared with litigation. The parties set out their concerns in opening statements and the mediator will then speak with each party in separate caucuses to explore the issues with the intention of reaching a solution which is acceptable to both parties. If an agreement can be reached the terms will usually be recorded in a mediation agreement, drafted by the mediator, and signed by the parties.

The influential report on the future of Civil Litigation published by Sir Rupert Jackson, in January 2010, drives home the pro mediation message when he opined that:

Alternative dispute resolution (“ADR”) (particularly mediation) has a vital role to play in reducing the costs of civil disputes….ADR is, however, under-used…”[5]

We have found that mediation works in a variety of cases, from complex commercial matters (involving large sums of money) and workplace disputes, through to smaller property claims and partnership disputes.

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Employers Ability to Pay – Tao Herbs and Acupuncture Limited v Mrs Y Jin

Mrs Jin was employed by Tao Herbs and Acupuncture Ltd, and experienced a “rocky” relationship with her employer. She was dismissed on 23 December 2008, and issued a clam for unfair dismissal.

Mrs Jin claimed she had been dismissed unfairly, as her dismissal followed her questioning whether she was being paid the national minimum wage. She was awarded £11,000 –  £9,951.34 of which was comprised of a compensatory award for unfair dismissal.

Tao Herbs appealed, arguing that pursuant to section 123 of the Employment Rights Act 1996, it would not be “just and equitable”[1] for the award to be made as it would effectively force the company into liquidation.

The Tribunal stated that the correct approach in the calculation of an award for unfair dismissal “does not pay attention to the ability of the employer to pay”, and directed that Tao Herbs had no grounds on which they could appeal the decision.

This decision serves as a timely reminder, when some UK businesses are still experiencing difficulties, of the consequences of an adverse finding from an employment tribunal.

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Filed under Case Law Update, Costs, Employment Tribunal Focus