Reduction in response time to government consultations

We often, as a firm, voice our collective opinion on government proposals. In recent years, we have spoken out on a number of issues, ranging from the implementation of a cap on trainee solicitors’ wages, to the Jackson Reforms in the field of Personal Injury law and the now imminent introduction of fees in the Employment Tribunals.

We therefore speak from years of experience when we say that clear and considered responses to consultations require a great deal of research and preparation, which can often take several months.

We were therefore alarmed to hear in recent weeks that the government has now introduced new guidance to shorten the twelve week period for which ministers were previously required to consult the public on government proposals to a mere two weeks.

This clearly will make it extremely difficult for interested parties to gather evidence and prepare a reasoned and informed response to policy changes that directly affect us all.

The upshot of this is that, potentially, sections of the public, in particular those with access to fewer resources who will no doubt struggle to meet the two week deadline, will essentially be left without a voice to challenge government policy.

This appears to us to be nothing more than an attempt by the government to suppress opposition.

To place the effect of reducing the consultation period into context, in their response to the reduction of consultation periods the Institute of Employment Rights cite the Enterprise and Regulatory Reform Bill as an example whereby the government introduced, in their words, a “technical amendment” to existing legislation, without consulting the public. This “technical amendment” was to section 47 of the Health and Safety at Work Act 1974, the significance of which is far-reaching as it overturns the law imposing employers’ strict liability for the health and safety of their employees, which has been in effect for 114 years.

The implications of this are that various existing personal injury clients of our firm who suffer from life-long, incapacitating injuries, including one client who lost an eye, and potentially a career, due to faulty work equipment, would in future have been prevented from bringing their claims against their employer.

We therefore share the view of the Institute of Employment Rights and have supported their ongoing petition to the Secondary Legislation Scrutiny Committee to voice our opposition to the government’s blatant attempt to stifle the voice of opposition.

Christopher Ridley - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

No credible non-political basis for the Government's changes to employment law

 

As lawyers, we can’t help but say: before you change something, look long and hard at the evidence. After all if it isn’t broken, why fix it?

 

What is now amazing us is that the Government’s own evidence indicates there are no sound, solid or non-political reasons for changing the current employment laws we have in this country.

 

For example, according to the BIS Employment Regulation Report for September 2012, UK employment regulation was already in ‘good shape’ before any changes were made.

 

Vince Cable admitted as much in November 2011 when he said, “the UK has one of the most effective and lightly regulated labour markets among developed economies”.

 

The BIS Response to the ‘No Fault Dismissals’ Consultation goes even further than this - identifying that the UK has less employment protection than the BRICS economies – Brazil, Russia, India, China and South Africa – and other developing countries.

 

Yes, that’s right - the Government itself believes we currently have less ‘red tape’ and employment law protection than the world’s fastest growing and newly emerging economies – and that’s before most of the proposed changes – watering down TUPE, bringing in ET fees, scrapping equality questionnaires, removing protection from third party harassment, cutting unfair dismissal compensation by possibly 2/3rds, bringing in ‘employee owner’ contracts etc - come in. Those changes are not expected till 2013.

 

It seems that all external data (largely covering the period before the Government changes began!) support the Government’s evidence:

 

-  Employment Tribunals claims are down 15% nationally.

 

-  The OECD says the UK is already the 3rd least regulated and cheapest labour market (2008) behind only Canada and US.

 

-  The recent World Economic Forum Global Competitiveness Report cited UK’s existing flexibility as to why it moved up from 10th to 8th place in its global rankings.

 

-  The World Bank’s ‘Doing Business’ rankings of 183 countries shows the UK was already 7th in the world in 2011 for ‘ease of operating’ behind only Singapore 1^st, Hong Kong 2^nd, New Zealand 3^rd, USA 4^th, Denmark 5^th and Norway 6^th.

 

So why change things? There seems to be no financial or economic need to do so - and the more the Government changes employment law, the more confused workers and businesses are about their respective rights and obligations - creating more, not less uncertainty.

 

Regardless of this, the Government seems set on a race to the bottom. Many European economies are required to amend employment regulation as part of IMF and European financial support conditions but we seem to be racing to beat them to become one of the world’s worst places to work in terms of rights and protection.

 

 

David Sorensen - Partner

 

 

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

 

 

 

Tribunal Statistics vs Employment Law Reform

 

The Tribunals Service has released statistics, for the period 1 April 2011 to 31 March 2012, showing the types and numbers of claims pursued. At the same time, Vince Cable continues to announce plans to reform employment laws to give more flexibility and confidence to employers managing their workforce. But do they marry up?

 

The total number of claims received by the Tribunal has fallen from 218,100 (2010/2011) to 186,300. For the year 2009/2010 the figure was 236,100. The fall represents a 15% drop in the number of claims being pursued in comparison to last year and a 21% fall in comparison with 2009/2010. 

The government is concerned that too many Tribunal claims are being pursued and, according to John Walker of the Federation of Small Businesses, “Too many small firms don't take on staff because they fear being taken to an employment tribunal.” Can this really be right when the number of Tribunal claims is dropping?

Vince Cable has recently announced a proposal to reduce the cap for compensation in unfair dismissal cases. The cap at present is £72,300. The Tribunal figures for 2011/2012 show that the median award of compensation in unfair dismissal cases was £4,560 and the average award was £9,133. The vast majority of claims do not get anywhere near the cap - so why reduce it?

The Tribunals have also been making more costs awards, where the losing party pays the winner’s costs. Costs should only be awarded in limited circumstances but it seems the Tribunals are more inclined to award costs these days with the number of awards rising from 487 to 1,411, with 1,295 of those awarded to Respondents i.e. employers. In fairness one of those cases involved 800 Claimants being ordered to pay costs, so if that case is counted as one a more accurate picture shows an increase from 487 to 612 costs awards. Nevertheless, there has been an increase in costs awards against a fall in the number of claims pursued. Plainly the Tribunals are already exercising their powers to dissuade employees from making unmeritorious Tribunal claims.

The median awards of compensation for discrimination cases range from £4,267 in religious discrimination cases to £13,505 in sexual orientation cases. Average awards are higher but skewed by maximum awards, such as £4,445,023 in a race discrimination claim. Of course there are going to be very serious cases which warrant substantial awards of compensation, but the figures do not begin to show that compensation is getting out of hand. 

There is so much discussion and consultation about reforming employment law and it all seems to be pointing towards making it even more difficult for employees to exercise their rights and gain access to justice. With the stats showing an ever decreasing number of claims and limited awards of compensation, I’m not at all persuaded there’s a need to change.  

Dan Kindell - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

 

Award of Costs Against Unsuccessful Parties. Toss of a Coin?

It will come as no surprise to readers of this Blog that we are far from fans of the Government’s proposed set of reforms to Employment Tribunal law practice and procedure.

We have talked recently about the serious threat to access to justice posed by the promised introduction (in 2013) of a scheme of fees payable to commence and continue with Tribunal proceedings.

But there is already a disincentive to pursue unmeritorious claims. Tribunals are entitled in appropriate cases to make an award of costs against an unsuccessful party.

In practice those awards are few and far between. When they are made, the Tribunal has a couple of options: it can assess the costs that should be payable to the successful party by the losing party – up to £20,000.00 (a recent change in itself – the figure was £10,000 not long ago); or it can direct that the amount of costs should be assessed by a District Judge in the County Court. County Court Judges and District Judges are used to dealing with complicated assessment of legal costs – Employment Judges rarely are.

So it is with concern that we see that one of the proposed changes to Tribunals’ powers is to remove the current cap on assessed costs. An ET will be able to award any amount of legal costs, though there is no set procedure to govern the process. Toss a coin?

It is not enough that an employee might have to part with a thousand pounds to pursue a case all the way to a Tribunal hearing. If we add to that the threat of legal costs running potentially into tens of thousands of pounds, without even the checks and balances offered by the costs assessment system operated in the County Court, we risk deterring more and more people – and in particular, more and more ordinary working people of modest or average means – from pursuing their rights in the Employment Tribunals.

We’ve said it before but we’ll say it again: the rights granted to us by the great and the good are a waste of space, if we can’t afford to exercise them through due process of law.


Paul Scholey - Senior Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

The Price of Justice?

On 13th July the Ministry of Justice published its response to a consultation on charging fees in Employment Tribunals.

As we have previously reported, the consultation was never about whether ET fees were appropriate – the Government took that as a given; the question was how much ought to be charged.

The Ministry’s Paper includes a draft schedule of fee levels for different types of ET claim.

The “headline” figures include:

Breach of contract £160.00/£230.00.

Unfair dismissal £250.00/£950.00.

Sex discrimination £250.00/£950.00.

In each case there are 2 fees – an “Issue fee” and a “Hearing fee”.

The Issue fee will be payable to start the case. Unless you can foot the bill, or are eligible for some form of remission, you will not be able to commence Tribunal proceedings.

The “Hearing fee” will be payable later in proceedings, but the devil here will be in the detail.

We for example have recently begun a case in the Leeds Employment Tribunal and it has already been listed for a hearing in September 2012. Will the fee under the new regime be payable immediately? Might that be a twelve hundred pounds double-whammy more or less at the outset of the case?

Our concern has always been that individuals (and in particular individuals who are not members of Trade Unions) are going to be denied access to justice by the introduction of fees to pursue Tribunal cases.

Government after Government has crowed from the rooftops about the introduction of new rights – but those rights are worthless unless we have the means to enforce them and to seek a remedy for their abuse.

The new fees are likely to be introduced in Summer 2013. The consultation response is candid about the future: it says, “fee levels are initially set at a rate less than full costs”. The italics are our own – plainly this is the thin end of a fees wedge.

Collective claims pursued by Trade Unions may be more expensive still.

Let’s look at another example: a “complaint by a worker that employer has failed to allow them to take or to pay them for statutory annual leave entitlement” (being a claim under the Working Time Regulations) has an Issue fee of £160.00 and a Hearing fee of £230.00.

That is £390.00 that an employee will have to pay to establish a right to, say, a week’s paid holiday. At minimum wage rates, that would be a fee that exceeds the value of the claim that the employee wishes to make. What price is a week’s holiday?

We note that the Government has not yet made a song and dance about the fact that these fees might be paid, in successful cases, by employers. Tactically it seems to us that some employers are liable to let cases run their course. An employer might well think that an employee is unlikely to risk incurring the full amount of both Issue and Hearing fee, and so decline to look at early settlement in the hope that financial considerations will drive the employee to abandoning their rights. And since the hint is that the ET will have a discretion to award the fees against the employer, might we see cases where the employee wins but still stands the fees – pyrrhic victory indeed.

We understand that if business A and business B fall out about a commercial contract, they can be expected to pay some or all of the costs associated with a Court system that assists them to resolve the dispute between them. That is part of the price of doing business.

Is it now part of the price of being an employee?

Paul Scholey - Senior Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

The Government’s Approach to Women in the Workplace

In November 2011 our Prime Minister said that he was committed to end what he called the ‘scandal’ of women being paid less than men for doing the same job.

If that is right, he is going about things in a strange way.

His government are currently consulting about scrapping the statutory Questionnaire process. This is used by a person who believes she/he has been discriminated against in the workplace, for example, a female employee who believes she has been paid less than her male colleagues, to question her employer and seek information about pay and practices to see whether there has been discrimination. This process is long established having been in place for decades now and is a vital tool for a person who believes they have been discriminated against, enabling that person to obtain true facts and figures, such as pay levels between employees, particularly important when the employer tries to hide such information from its employees (very common in my experience). If this tool is scrapped it will have an enormous, adverse impact on women, disabled persons, minority ethnic groups and so forth within the workplace, making it even harder than it is now for them to show they have suffered discrimination. It will do nothing to help stop pay inequalities; in fact it will make things worse.

The Equality Act 2010 gave an Employment Tribunal wider ranging powers to require employers to stop discriminatory practices (known as ‘recommendations’). In my view, this was an extremely positive development of enormous benefit to not only those who have been discriminated against in a workplace, but the rest of the workforce, as such recommendations are designed to prevent future discrimination. Again, the government is currently consulting about scrapping this power.

The Government has just announced consultation on bringing in mandatory pay audits for employers who lose equal pay claims in an Employment Tribunal. Sounds good on the face of it, but if it’s even harder for an employee to win such a claim because Questionnaires are scrapped, the likelihood of an employer losing reduces.

Scrapping the Questionnaire process and Employment Tribunal recommendations is a scandal in my view and will find favour only with employers who discriminate and use discriminatory practices in their pay systems.

David Sorensen - Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

Age Discrimination – Do We Have a Level Playing Field?

The Supreme Court has recently given Judgment in the case of Homer v Chief Constable of West Yorkshire Police, which is a case concerned with indirect discrimination on the grounds of age and we think the consequences of this decision are interesting.

Mr Homer worked as a legal advisor for the police and in 2005 his department introduced a new grading structure.  In order for him to reach the third threshold he was required to have a law degree.  When he was appointed, a law degree was not essential.  Mr Homer was aged 62 and had a normal retirement age of 65. A law degree would take four years to complete by part-time study. Mr Homer claimed he had been indirectly discriminated against on grounds of age because the requirement to obtain a law degree disproportionately affected people aged 60-65 who would not be able to obtain a law degree before they had to retire.

Mr Homer failed in the Tribunal, Appeal Tribunal and Court of Appeal but the Supreme Court has agreed with him. It has now found that the reason for Mr Homer’s disadvantage was that people in his age group did not have time to acquire a law degree before they retired and this was indirectly discriminatory. Unless the employer can justify this less favourable treatment, it must modify its practices so as to remove the disadvantage.

Is this decision an example of the law of unintended consequences? Won’t an employee who is aged 25 be able to argue that the Supreme Court’s decision will lead to more favourable treatment for older employees? Will a 25 year old need a degree where that condition doesn’t apply to a person aged 60? How will the Tribunal find the right balance?

Perhaps achieving true equality in indirect age discrimination cases will always be taxing. It seems that any attempt to prevent a provision, criterion or practice from being indirectly age discriminatory always has the potential to lead to a disadvantage for another generation. 

Can we really therefore achieve a level playing field in indirect age discrimination?

Dan Kindell - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

Equal Pay Legislation

There has been equal pay legislation in the UK for more than four decades.

The Equal Pay Act (now replaced by the Equality Act 2010) became law in 1970 but direct and indirect discrimination regarding pay against women still persists in the workplace.

Pay gaps widen the higher up the pay scale you look. The recession and government cuts to the public sector are also widening the gap.

The equal pay provisions are complex, and in consequence, the cost of legal proceedings in pursuit of equal pay is beyond the reach of most women. With the issue fees set to be introduced as of April 2013, this will only add an additional burden to potential claimants.

In 2010/11 Employment Tribunals received 218,100 claims, of which only 34,600 were equal pay claims.  Of the claims, 1980 went to a full hearing – 5% of the total. Of those 5%, only 16% succeeded, 84% failed.

However, all is not doom and gloom.

Earlier this month, in the cases of Bury Metropolitan Borough Council v Hamilton and others and the Council of the City of Sunderland v Brennan and others, the Court of Appeal rejected a challenge made by the Councils to a Tribunal’s finding and upheld the original decision made by the Tribunal.

Female council workers (including caterers, cleaners and carers) compared themselves with male council workers (including gardeners, refuse collectors and drivers). Although the female claimants received the same basic pay as their comparators, their overall pay was less because of productivity bonuses which were paid to the male workers.

Both the tribunal and the Court of Appeal found that the bonus schemes were genuinely intended to increase productivity when introduced.  However, the Council’s defence was rejected as the Court found in reality the bonuses were no longer linked with productivity which in turn meant they had become part of the males workers basic pay.

The Court said this was discrimination.

The Court of Appeal judgment is helpful for employees as it is clear that pay differences based on historical factors that no longer apply can be challenged, and it places employers on notice that such reasons should also be kept under careful review.

Anna Power - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

Have the Police and MI5 been helping companies to blacklist employees?

According to the Observer newspaper, David Clancy, investigations manager at the Information Commissioner’s Office (ICO) and a former police officer recently told the Central London employment tribunal that the police or security services are believed to have supplied information to a blacklist that has kept thousands of people out of work over the past three decades – a blacklist that has been funded by the country’s major construction firms. The newspaper has reported that Mr Clancy believed records that could only have come from the police or MI5 were included in a vast database of files held by a shadowy organisation known as the Consulting Association, covering about 3,200 construction workers, mostly targeted for their trade union and particularly safety activities.

Such allegations are given greater authority by the fact that the ICO is the UK’s independent authority set up to uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals.

This came out during an employment tribunal hearing concerning allegations by a number of these individuals against construction giant Carillion and other building firms alleging they have been denied employment and treated poorly because they were on the blacklist.

One of those individuals, Dave Smith, told the newspaper that "if managers on a building site don't like the fact that I am a safety rep because it affects their profit and their deadlines, then I understand why they might do it. I disagree with it, I think it is wrong, but I can understand, but for the police to be involved is appalling. This is the state linking up with big business basically, and any decent person in a civilised society would think it is appalling. This is about human rights. I have not done anything illegal; I am a member of a trade union. I have worked in an attempt to improve health and safety on building sites and yet it appears my employers, the state, security services and the police have been conspiring against me."

The Consulting Association was closed down and a 66-year-old private investigator, Ian Kerr, was fined £5,000 for administering the database, although the construction firms escaped prosecution.

Given the phone-hacking scandals involving newspapers and alleged close ties with the Metropolitan Police, these allegations by the ICO investigations manager, if true, appear to indicate a murky world operating between the state and big business – query whether this is a rarely sighted tip of the iceberg? Do employers in other sectors of industry operate similar blacklists? How widespread are the links between business and the state? And just as importantly, is the Government going to anything at all about it?

David Sorensen - Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

If it ain't broke why try to fix it?

A few months ago David Cameron said that a businessman told him “I don’t care if the UK’s processes are more flexible than most European countries”, as it was cheaper to hire and fire in the US. The Prime Minister went on to say “that’s like saying we’re better than Italy at cricket. The real competition is the US and Asia. That’s why I want to deregulate and cut back on bureaucracy”.

Vince Cable chipped in saying “what we are doing here is hacking through the excessive red tape and regulation that prevents too many businesses from creating new jobs in the first place” along with “ambitious plans to deregulate and modernise employment relations”. However, within the same speech he admitted “the UK has one of the most effective and lightly regulated labour markets among developed economies”.

A few weeks ago Liam Fox continued the theme arguing for the wholesale “deregulation” of the labour market saying “it is too difficult to hire and fire and too expensive to take on new employees”.

I think we can safely conclude that the government’s aim is to deregulate employment law, moving away from what was previously employment protection, to employer protection.

Aside from political ideology, I believe there is no credible evidence to support this push for deregulation.

According to the World Bank’s ‘Doing Business’ rankings, the UK ranks 7th in the world for business ‘ease of operating’ out of a total of 183 countries, behind only, in order, Singapore, Hong Kong, New Zealand, the US, Denmark and Norway. Yes, that’s right; we are currently, according to the World Bank, the 7th easiest country in the world within which to operate a business. That’s before any of the government’s proposed employment deregulation kicks in.

On top of this, the OECD’s ‘employment protection index’ measures the procedures and costs involved in dismissing and hiring workers and employees across the developed world. Of the world’s 21 largest economies, the UK currently already ranks as the 3rd cheapest behind only Canada and the US. This means that out of the 21 major economies, the UK has the 3rd lowest level of employment protection and associated costs.

In contrast, in terms of increases in unemployment, Germany and the Netherlands, whilst having much higher levels of employment protection and regulation, have had smaller rises in unemployment. Also many would point to heavily regulated and protected German workers as being very productive and of course no-one can deny Germany’s current success.

There is no credible hard evidence supporting the government’s view that ‘hacking and slashing’ employment protection will fix the UK’s economic problems. Given the fact that many countries have much higher levels of employment protection, not least Germany, maybe the Government should take an alternative approach, by increasing employment protection!

Finally, given the most recent Employment Tribunal statistics, the government no longer seems to be banging the drum that ‘there are too many Employment Tribunal claims and so we must cut employment protection’. This is hardly surprising, given the fact that as reported in our last blog the latest quarterly statistics for the Employment Tribunal covering the period from July to September 2011, show there was an overall fall of 30% in new claims with a 41% fall in new multiple claims (such as for equal pay). Hardly an imperative for change!

David Sorensen - Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

All Change in the Employment Tribunals

We blogged in January about the introduction of Tribunal fees.

More changes lie ahead.

Firstly from 6th April 2012 the qualifying period for eligibility to claim unfair dismissal increases from 12 months to 2 years.

Employees who started work on or before 5th April will still benefit from the old rule.

But new employees will have to wait 2 complete years before they are entitled to make a claim for unfair dismissal.

That means 2 years of uncertainty in a job climate that is already filled with uncertainties for many.

But we’ve blogged before that Government seems to be deaf to the many well-informed arguments about this.

I was intrigued to see that the latest Tribunal statistics show that for the period July to September 2011, the number of new claims received by the Employment Tribunals dropped 30% compared to the same period in 2010.

30 per cent.

Our experience is that, given the difficult economic times, many workers are refusing to stick their heads above the parapet, and we suspect that that accounts in no small part for the drop off in Tribunal claims.

But what with new fees to pursue claims, and longer waiting periods before one is eligible to pursue them at all, and much political posturing about the importance to business of “cutting red tape” we have to pose the question: with the number of Tribunal cases dropping off sharply, is Government trying to fix something that isn’t even broken?

Paul Scholey - Senior Partner
 
For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.
 
 

In the Spotlight: Tribunal Fees

The Ministry of Justice has now published its consultation paper in relation to charging fees in Employment Tribunals. The Department is seeking opinions 2 proposals put forward in relation to the structures. It is, however, clear that fees will be introduced irrespective of any access to justice issues.

Both proposals divide claims into levels according to the potential complexity of the claim, with more straightforward areas of the law being level 1 (for example breach of contract and unlawful deductions from wages), level 2 claims for more complicated cases such as unfair dismissal and complaints in relation to failure to inform and consult under TUPE, and then the most complicated claims such as equal pay and discrimination are at level 3.

What this means is that it may cost £150 to issue a level 1 claim under option 1 or £200 under option 2. It is proposed that this fee will apply irrespective of the value of the claim. So what this means in practice is that an employee who is owed say £50 unpaid wages will have to pay 3 or 4 times the amount that he is owed in order to reclaim that amount. Employees who simply want a declaration as to their terms and conditions of employment will also have to pay this fee.

If option 1 is adopted, not only will the individual have to pay the £150 on issue, but if the case has to be determined at a hearing, they will then have to pay an additional £250 hearing fee.

Level 3 claims will have to pay £250 issue fee plus a staggering £1,250 hearing fee.

What that will mean in practice is that employees are likely to be dissuaded from pursuing low value complaints simply because the Tribunal fees will be more than they could expect to recover from a claim. There does not appear to be any proposal for a dispensation of the fee in such low value claims.

It is also likely to mean that employers will be taking a tactical approach to claims and may defend claims to a hearing on the basis that the level of the hearing fee that will have to be paid will again put individuals off continuing their claim and the claim is then more likely to be withdrawn.

So whilst the Government’s intention is to encourage early resolution of workplace disputes, the effect will simply be to prevent employees from pursuing complaints and access to justice will limited.

And what does “low value” mean? We’re sure that for the politicians £250 is no great shakes; but for many people it’s a week’s pay. But who will be able to risk (or simply, afford) £150 to try to recover £250. It’s the people who can least afford to take the hit, who will have to do so under the proposed regime.

Toni Haynes - Solicitor

For further information, please contact our Employment Rights team on 0113 245 0733