Employment Bill [Lords]

I first wish to make a general point that is relatively important in the context of clause 4. When I first started appearing before industrial tribunals in 1976 I did so for free, as a trainee lawyer with the Free Representation Unit. In those days, tribunals were very informal, the rules of procedure were limited and the chairman would often be able to decide what sort of evidence he wanted to hear and how. The person representing the employee was often a trade union representative or someone free—like me—and the employer would simply send along the personnel director. In that atmosphere, the people there—including the members of the tribunal—understood the workplace and the industrial scene. The three who made up the panel—the employer's representative, the employee's representative and the lawyer who acted as chairman—were an integral part of that atmosphere, which was that of an industrial jury that decided industrial concerns on behalf of people who all understood the workplace. The atmosphere has changed a lot over the years and industrial tribunals—now employment tribunals—have become much more formal places with more legalism. It was inevitable that that would happen. That area of law was very exciting in the 1970s, because it was constantly changing as new Governments came and went. The Industrial Relations Law Reports came out every week, so more law was reported in that area than in almost any other. Gradually, the effect of all the new cases and the need for precision ensured the change to a more legalistic environment. However, the tripartite decision making has remained throughout, with an employer's representative, an employee's representative and a chairman. That is very important for cases that address issues such as the terms and conditions of employment or questions of unfair dismissal. Once the employer has shown the reason for dismissal, it is up to the industrial jury to decide whether the decision to dismiss was reasonable. The issue of reasonableness in that forum is well decided by a tribunal made up of representatives who understand the workplace. Anything that erodes that approach would be a bad thing. So when clause 4 of the Bill talks of fast-track decision making without a hearing, alarm bells begin to ring. Will that mean that the chairman decides cases on his own? Last year, we had a consultation document, ““Transforming tribunals””, from the Ministry of Justice, and chapter 9 included suggestions that employment tribunals had scope for more decision making by chairmen alone, as it would not always be necessary to involve the lay members. The issue was taken up in the other place by Lord Wedderburn who pressed the Minister on it. I wish to do the same and press the Minister to confirm that the Government have no intention of cutting back on tripartite decision making by the tribunal on important issues such as reasonableness of dismissal and terms and conditions of employment. The lay members add something to the decision making on those issues and I hope that the Minister will be able to reassure me on that point. Clauses 1 to 3 abolish the 2004 regulations, encourage more voluntary conciliation and support ACAS with extra funding. I shall give some of the history behind the boom in cases that led to the Employment Act 2002. In the early days of the industrial tribunal, it had a much more limited jurisdiction with far fewer cases. Even in 1998, there were only about 29,000 cases a year. By 2000, that had grown to 130,000 cases a year, and something needed to be done to encourage employers and employees to try to solve their problems without necessarily ending up at an employment tribunal. One of the great motors for an increase in the number of cases was the Polkey v. A. E. Dayton Services Ltd decision in 1987, because it said that if there was any significant procedural irregularity in the way in which a case was dealt with by the employer, there was an entitlement to a finding of unfair dismissal. If it was only a technical matter, however, the tribunal could decide that, despite the procedural irregularity and the consequent unfair dismissal, the compensation could be set at nothing or very low. The decision meant that cases that would previously have been rejected on their merits were pursued on procedural grounds. The Conservative Government looked at the issue in the mid-1990s and published a Green Paper in 1994 that considered the options for dealing with disputes. It had two main suggestions. First, it suggested that ACAS should have a conciliation scheme and a system of voluntary referrals to arbitration. Secondly, if employees had not followed the internal grievance procedure, or employers had not followed their internal procedures, they should not have the right to go to a tribunal. In other words, it was vital to both employees' and employers' defences to have pursued internal remedies first. In response it was argued that that approach would cause complexity and delay in many cases. After much thought, the then Minister, Ian Lang, decided not to require the internal procedures to be completed. When the Labour Government came in, they looked at the consultation document and the responses and made the same decision. I cannot remember who the Minister was, but in 1997 the incoming Government decided against that change. It was therefore a surprise—not to mention a mistake—when the Government, in introducing the 2002 Act, decided to go ahead and insist that internal procedures should be completed to provide grounds for a claim or a defence to a claim. Many warned at the time that that would lead to complexity and delay. Instead of all the evidence being heard in one go by a tribunal, a two-part procedure was necessary. The first part of the process was deciding whether a case was procedurally acceptable because the internal procedures had been completed by the employer or employee. Then another hearing was needed to decide whether the dismissal was unfair or not. The effect of that was predictable, and so it came to pass. From quite early on—within a year of the change's implementation—organisations such as the CBI and some unions were saying that it was a good idea in policy terms, but that the way in which it had been implemented was heavy handed, bureaucratic, prescriptive, over-regulatory and did not work. The number of cases that were delayed went up and became a big problem. I remember that when I was the Front-Bench spokesman for legal issues, the chairmen of tribunals would come to me and say, ““Look, you have to do something about these 2004 regulations because they are snarling up the whole system. Although they were a good idea in principle, in practice they are turning out to be a nightmare.”” I asked a number of parliamentary questions on the issue—in fact, last summer, after the Gibbons report came out, I reached a crescendo with about 20 questions, all asking whether the Government would do something about the situation. Now that I have given that background, I want to tell the House that I welcome clauses 1 to 3, which get rid of the idea that there must be a first hearing about the procedural aspects before one can get down to the real thing—in other words, that it has to be proved that the procedures have been followed internally before a claim can be mounted. As far as the other side of the coin is concerned, though, the idea of having conciliation and some ability to talk and to try to reach a decision on the claim between employer and employee before the matter gets out of the workplace is a good idea. I welcome the fact that ACAS is getting extra funds, but does the Minister think that there is room for mediators and others to be involved rather than just ACAS. What is the Government's position on alternative dispute resolution in that area? Is it that it should just be a matter for ACAS and that the £37 million will do it, or are the Government saying that they would be prepared to have independent mediators and others involved to try to tackle some of the cases at an earlier stage? My overall position is that I give a warm welcome to the first few clauses of the Bill, which are long overdue. I have no doubt that the mistake was made with the best of intentions but I am pleased that it is being remedied, and I know that everybody in the employment tribunals will heave a sigh of relief.