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Comment : Radical Reform of the Employment Tribunals is on its way – yet again
(April 2007)
Richard Dunstan wonders whether the most vulnerable workers will be among those who benefit.
Since 1 October 2004, every employer – whether large or small – has been required by law to have in place statutory minimum procedures for dealing with grievances, dismissal and disciplinary action. In return, it has not been possible for an employee to bring a claim to an Employment Tribunal without having first exhausted their employer's grievance procedure. And, where a claim is accepted by a Tribunal, any ensuing award can be reduced by 10 to 50 per cent where the Tribunal decides that the claimant is to blame for the relevant statutory procedure not having been followed correctly, or increased by up to 50 per cent where it decides that such fault lies with the employer.
This article originally appeared in the March 2007 edition of 'Evidence' – the newsletter of the Citizens Advice Bureau.
The Government's core objective for these reforms was to encourage the "early resolution" of employment disputes in the workplace – and so reduce the number of Employment Tribunal claims. In itself, this was a laudable objective – no one can reasonably disagree with the proposition that an Employment Tribunal claim should be a measure of last resort. But, as predicted by Citizens Advice at the time, achieving it has proved to be somewhat more difficult than Ministers and officials expected.
By mid-2006, when a team of DTI officials began preparatory work on a promised review of the 2004 reforms, there was widespread consensus that, in practice, the statutory procedures have tended to formalise rather than resolve disputes at an early stage, and that this greater formality and emphasis on process has entirely negated the Government's objective. This is not least because the highly complex Regulations governing the regime have proved to be unfathomable not just to a great many claimants and employers, but also to some professional advisers and even members of the judiciary.
In addition, it had become clear from the CAB social policy evidence submitted to Citizens Advice that the 2004 Regulations create significant barriers to justice for some of the most vulnerable employees. This has been most stark in the case of those who have left the employment and have then brought an Employment Tribunal claim in respect of e.g. unpaid final wages and/or owed holiday pay. The requirement to follow the statutory grievance procedure in full – including attending a face-to-face meeting with the employer – or risk a substantial reduction in any ensuing award is little short of farcical, and has been used by rogue employers to intimidate vulnerable claimants into withdrawing their claim.
In December 2006, DTI Secretary of State, Alistair Darling, announced that he had appointed Michael Gibbons, a member of the Better Regulation Commission, to undertake an independent, "root and branch" review of the 2004 Regulations. Mr Gibbons was charged with looking at "all aspects of the system, including the current legal requirements, how employment tribunals work, and the scope for new initiatives to help resolve disputes at an earlier stage", and he was asked to make recommendations for change to the Secretary of State by Spring 2007.
The establishment of the Gibbons Review appears to reflect a realisation on the part of the original DTI review team, and an acceptance by Ministers, that leaving the 2004 Regulations in place is simply not a credible way forward. At the time of writing, the Review's recommendations have not yet been published [see Postscript, below]. But the 2004 Regulations have been strongly criticised by just about everyone from the CBI to the TUC, and Citizens Advice hopes that the Review will lead to them being withdrawn. The real question is what else will emerge from the Review.
Increased roles for ACAS, and for the mediation of individual workplace disputes by means of Alternative Dispute Resolution (ADR), seem likely and would be welcome. Given that conciliation by ACAS is generally considered a success story, it is short-sighted that ACAS has recently been subjected to substantial budget cuts. There may well, in addition, be scope for the voluntary mediation of some Employment Tribunal claims.
However, the Employment Tribunal system, of which the 2004 Regulations currently form an integral part, is not there simply to resolve the kind of workplace disagreement that is susceptible to conciliation or mediation. It is also the only means by which someone who is being exploited by a rogue employer can try to enforce access to most of their statutory workplace rights.
Whilst the great majority of employers generally meet their legal obligations to their workforce – even if they occasionally have a disagreement (or 'dispute') with an individual employee or group of employees – there are far too many rogue employers who do not, even when their non-compliance is explicitly challenged (by the employee or an adviser). In the case of such deliberately exploitative employers, conciliation or mediation are most unlikely to prove of any value in resolving the dispute – which in fact is not a 'dispute' at all but an illegal denial of statutory rights. Some of those denied their statutory rights by such employers do proceed to bring an Employment Tribunal claim (though often only after leaving the employment), but a great many more do not because of their fear of victimisation and/or summary dismissal by their employer.
This means that rogue employers can exploit their workforce with near impunity, safe in the knowledge that few if any of those who they are exploiting will pursue an Employment Tribunal claim, and that they can in any case – given the inability of Employment Tribunals to enforce their own awards – ignore any award made to the few that do. So reform or even repeal of the 2004 Regulations, however welcome in itself, will do little to improve the position of the large number of low paid, non-unionised and otherwise vulnerable workers in the UK's increasingly 'flexible' labour market.
This is the real challenge. The Government has already said that, having "put in place an improved framework of workplace rights [since 1997]", its "next task" is to "ensure that the most vulnerable workers get those rights and are not mistreated".
Citizens Advice has repeatedly argued that the most obvious way to do this would be to extend the more accessible, targeted and pro-active enforcement regime associated with the National Minimum Wage to cover all basic statutory workplace rights. And, apart from bearing down more effectively on rogue employers – to the benefit of all – this would obviate the need for a small but significant proportion of Employment Tribunal claims.
Richard Dunstan is a social policy officer at Citizens Advice, working on employment and immigration issues.
Postscript:
Since this article was written, the report of the Gibbons Review has been published alongside a DTI consultation on the Review's recommendations. As well as recommending repeal of the 2004 Dispute Resolution Regulations, the Review proposes "a new, simple process to settle [simple] monetary disputes on issues such as wages, redundancy and holiday pay, without the need for tribunal hearings", and suggests that such cases could be dealt with through desk-based investigations by compliance officers in "a new service outside the employment tribunals".