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March 7, 2014

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Jessemy v Rowstock Ltd: post-termination victimisation and the limits of judicial reasoning

Jessemy v Rowstock Ltd: post-termination victimisation and the limits of judicial reasoning by Harini Iyengar

How did the Court of Appeal in Jessemy v Rowstock Ltd [2014] EWCA Civ 185 conclude that victimisation of former employees remains unlawful even though “on any natural reading of the relevant provisions of the [Equality Act 2010], taken on their own and without reference to any contextual material, post-termination victimisation is not proscribed”.

Summary

The Court of Appeal (“CA”) has held that post-termination victimisation is unlawful, by adopting an ingenious interpretation of section 108(7) of the Equality Act 2010. Whilst the outcome is clearly correct according to the coterie of right-minded employment lawyers (amongst whom I would aspire to class myself), the case provides an intriguing example of a court concluding that what the law says is in fact exactly what it does not say. Does the type of judicial reasoning which the CA has deployed in Jessemy v Rowstock Ltd give discrimination law a bad name?

The Judgment

The judgment of the CA was given by Underhill LJ, former President of the Employment Appeal Tribunal (“EAT”), (with whom Ryder and Maurice Kay LJJ agreed) and upheld the judgment which his successor, Langstaff J, had given on the same issue in the EAT in Onu v Akwiwu, whilst overruling Mr Recorder Luba QC in Jessamy v Rowstock Ltd in the EAT.

As Underhill LJ stated, “the issue is one of pure law”, so, in regard to the facts, it is sufficient to relate simply that the claim of post-termination victimisation which the Employment Tribunal (“ET”) and then the EAT dismissed concerned a Claimant who was subjected to a detriment in the form of a poor reference from a former employer because he had brought proceedings for unfair dismissal and age discrimination.

The First-Generation Discrimination Statutes

The CA first considered the law on victimisation under the “first-generation” discrimination statutes (the Sex Discrimination Act 1975, the Race Relations Act 1976, and the Disability Discrimination Act 1995) which prohibited discrimination by an employer against a worker “employed by him” or “whom he employs”. In Post Office v Adekeye the CA held in 1997 that the natural meaning of these phrases confined the protection against discrimination to workers employed at the time of the act complained of, however, in Coote v Granada Hospitality Ltd in 1999 the European Court of Justice (“ECJ”) held that since sex discrimination was proscribed under the Equal Treatment Directive, the “principle of effectiveness” meant that employees complaining of sex discrimination had to be protected against victimisation on that account, whether the victimisation occurred during employment or after termination. On remission, the EAT held in Coote that “employed by him” should be construed as including a former employee who had complained of sex discrimination, and that Adekeye should not be followed.

Then, in Rhys-Harper v Relaxion Group plc in 2003, the House of Lords authoritatively determined that in regard to all three first-generation discrimination statutes, “employed by him” and “whom he employs” (despite the use of the present tense) could and should be read as applying to former employees. According to Underhill LJ, “The essential point is that it was regarded as extremely unlikely that Parliament had intended to exclude all claims for post-employment discrimination.” The majority reached those conclusions by applying ordinary domestic principles of construction, rather than the ECJ decision in Coote.

The Second-Generation Discrimination Provisions

In 2003, in regard to sexual orientation and religion or belief, and in 2006 in regard to age, the second-generation discrimination rights were brought in through statutory instruments which expressly rendered unlawful any discrimination or harassment which arose out of and was closely connected to “relationships which have come to an end”. Equivalent provisions were inserted by regulation at the same time into the first-generation discrimination statutes.
This analysis brought Underhill LJ to the bedrock of his argument: “The upshot of all that is that at the time that the 2010 Act was drafted it was well-established that post-employment discrimination – which included victimisation – was unlawful.”

The Equality Act 2010

He went on to analyse the structure of the Equality Act 2010. Part 2 sets out key concepts on equality, Chapter 1 giving the protected characteristics and Chapter 2 explaining “Prohibited Conduct” in the form of direct and indirect discrimination, ancillary matters, and then “Other Prohibited Conduct” in sections 26 and 27 defining harassment and victimisation respectively. Unlike the first- and second-generation anti-discrimination rules, under the Equality Act 2010 rules, discrimination, harassment and victimisation are separated out as distinct forms of prohibited conduct.

It is only in Parts 5 and 8 that the relevant prohibited conduct is made unlawful. In Part 5, sub-sections 39(3) and (4) make it unlawful to victimise an employee by subjecting him or her to any other detriment (such as providing a bad reference). Section 83 contains the definition of “employee” as someone who is employed under a contract of employment, a contract of apprenticeship or a contract personally to do work. Part 8 covers “Prohibited Conduct: Ancillary” and includes section 108:

(1) A person (A) must not discriminate against another (B) if –
(a) the discrimination arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the discrimination would, if it occurred during the relationship, contravene this Act.
(2) A person (A) must not harass another (B) if –
(a) the harassment arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the harassment would, if it occurred during the relationship, contravene this Act.
(3) It does not matter whether the relationship ends before or after the commencement of this Act.
(4) …
(5) …
(6) For the purposes of Part 9 (enforcement), a contravention of this section relates to the Part of this Act that would have been contravened if the relationship had not ended.
(7) But conduct is not a contravention of this section in so far as it also amounts to victimisation of B by A.

The CA plainly identified “the problem” about section 108 as being that it explicitly proscribes post-termination discrimination and harassment, but contains no equivalent provisions as to victimisation. Underhill LJ politely said of section 108(7) that its “intended effect is far from clear”.

The New Generation Directives

Underhill LJ next moved on to European Union (“EU”) law, in the form of the Race Directive of 2000, the Framework Directive of 2000 on religion or belief, disability, age and sexual orientation, and the Recast Directive on sex discrimination of 2006, which he categorised as the new generation directives, structured differently from the Equal Treatment Directive which was in force at the time of the claims in Coote and Rhys-Harper. The new generation directives all contain a prohibition on victimisation which is worded in a broadly similar way, requiring Member States to introduce into their national legal systems such measures as are necessary to protect employees against dismissal or other adverse treatment by the employer as a reaction to a complaint within the undertaking or to any legal proceedings aimed at enforcing compliance with the principle of equal treatment.
Reaching the same conclusion in regard to EU law as he had in regard to domestic law, he said, “It is clear from the decision of the ECJ in Coote that that provision must apply equally to acts done after as well as during the currency of the employment relationship.”

The Straightforward Reasoning of the ET and the Luba EAT in Jessamy

The CA described the reasoning of the ET and the EAT in Jessamy as “straightforward”. Mr Recorder Luba QC’s EAT regarded it as “highly unlikely” that Parliament had intended with the Equality Act 2010 to legislate away any redress for post-employment victimisation, given both the domestic law in Rhys-Harper and the UK’s obligations under EU law. The EAT fully acknowledged the “flexible interpretative approach” required by EU law, and cited Attridge LLP v Coleman and Ghaidan v Godin-Mendoza, but concluded that to read section 108(7) as prohibiting post-termination victimisation would “fly directly in the face of what Parliament has actually enacted.”

The Wholly Domestic Interpretation of the Langstaff EAT in Onu

In contrast, Langstaff J’s EAT in Onu took an approach based on interpretative principles of domestic law, as in Rhys-Harper, to conclude that the reference to “an employee of A’s” in section 39(4), could be stretched to include former employees.

The Reasoning of the Court of Appeal

Underhill LJ considered that it was “clear that on a natural reading of the relevant provisions of the 2010 Act, taken on their own and without reference to any contextual material, post-termination victimisation is not proscribed”. How then did he manage to reach the opposite conclusion through deft judicial reasoning?
To start with, he acknowledged the shortcomings in Langstaff J’s approach in the EAT. Although, in isolation, “an employee of A’s” can be read as referring to a former employee, that is not consistent with the scheme of the Equality Act 2010, in which prohibited conduct arising out of a past relationship will be proscribed, if at all, by the ancillary provisions in Part 8, and in particular by section 108. There, discrimination and harassment post-termination are prohibited but not victimisation.

He then stated that when the contextual materials were considered, it was clear that the provision in the statute was “not the result which the draftsman intended”, pointing out that Langstaff J, Mr Recorder Luba QC, and the barristers in the case all shared that view.

The contextual materials on which Underhill LJ relied were (i) Rhys-Harper and the second-generation discrimination provisions which expressly made post-termination victimisation unlawful; (ii) the absence of any indication from the Government that the Equality Act 2010 was intended to change the law by removing protection against post-termination victimisation; (iii) the Explanatory Notes on section 108 which referred to claims being “dealt with under the victimisation provisions and not under this section”; (iv) the fact that if post-termination victimisation were not proscribed then the UK would be in breach of its obligations under EU law; and (v) the absence of any rational basis for treating post-termination victimisation differently from post-termination discrimination and harassment.

Taken together, these five matters led him to conclude, “It follows that the apparent failure of the statute to proscribe post-termination victimisation is a drafting error. … In the end, it is unnecessary to be able to show how the error arose as long as it is clear that it was indeed an error.”

The key issue for Underhill LJ was therefore, “… how far is it right to go to correct what is an undoubted drafting error: would that, as the EAT put it, involve crossing the Rubicon?” Underhill LJ reasoned that since the Equality Act 2010 gives effect to the UK’s equality obligations in EU law, the Court must adopt “the Ghaidan approach” which empowered it more widely to “depart from the natural reading of the language of the statute, including by the implication of words which alter its effect as drafted” than would be possible on a conventional domestic approach to statutory construction. He considered that the “flexible interpretative” Ghaidan approach “unquestionably” applied here. After a detailed analysis, he concluded that “the only question is whether it is “possible” … to imply words into the 2010 Act which achieve that result” of proscribing post-termination victimisation, that it plainly was possible, and that the implication of such words “in fact represents what the draftsman intended.” According to Underhill LJ, the Luba EAT erred in failing to appreciate just how flexible the Ghaidan approach was. Yet, while making this criticism, he acknowledged that “the effect of section 108(7) is decidedly opaque”. After bravely attempting to find meaning in the sub-section, Underhill LJ concluded that the first possible meaning (that post-termination was not intended to be proscribed and therefore was also not proscribed where it happened also to constitute post-termination discrimination) was one which would have “no rational reason … for having that effect, and it would have perverse results”, and the second possible meaning (that post-termination victimisation was proscribed elsewhere in the statute but for some reason cases of overlapping post-termination victimisation and discrimination claims should only be complained of under those other provisions) was “unconvincing” because cases of overlapping claims are common and do not in practice give rise to double recovery. Ultimately, Underhill LJ did accept that “it is indeed impossible to see the point of sub-section (7)”. He considered that “the draftsman may rather have lost his way in his treatment of section 108”, noting that in Schedule 28 “discrimination” was said to be defined in, amongst others, section 108, whereas in fact that section proscribed it.

From this position, that the draftsman must have lost his way, made an error, and drafted a meaningless sub-section, Underhill LJ reached the view that the section 108(7) contained “no clear indication of an intention that post-termination victimisation should be lawful”. Therefore, he reasoned, there was “no obstacle” to implying that section 108 gave effect to the EU obligation to proscribe post-employment victimisation. Perhaps intending to guide the lost draftsman, the Court of Appeal suggested either an amendment to section 108(1) to add:

In this sub-section discrimination includes victimisation,

or a new sub-section 2A to add:

A person (A) must not victimise another (B) if –
(a) the victimisation arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the harassment would, if it occurred during the relationship, contravene this Act.

Having determined that it was meaningless, Underhill LJ was “not sure that anything needs to be done about sub-section (7)”. He was, however, careful to state that the meaningless sub-section “can have no meaning which is inconsistent with post-termination victimisation being unlawful.”

Then, at the request of the Equality and Human Rights Commission, which was concerned about discrimination in the provision of goods and services, not all of which is proscribed by EU law, Underhill LJ also considered whether the domestic approach to statutory construction would lead to a different result. He accepted a “more straightforward domestic route to the same result, by way of a “rectifying construction” of the kind adopted by the House of Lords in Inco,” involving a “plain case of drafting error”. For Underhill LJ, where there is a drafting error through omission, there is “no real difference” between the Ghaidan and the Inco approaches.

In Inco the court concluded that “the draftsman slipped up” and “the court must be able to correct obvious drafting errors”: the court held that the words “from any decision of the High Court under that Part” were to be read as meaning “from any decision of the High Court under a section in that Part which provides for an appeal from such decision.” According to Lord Nicholls in Inco, a court could adopt such a course only if “abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed.” Lord Nicholls went on to say, however, that the third condition was of crucial importance, because otherwise the court would be crossing the boundary between construction and legislation.

No doubt recognising the dramatic nature of his interpretation, Underhill LJ said, “It would be different in a case where no such intention is established and the argument is simply that the implication sought is necessary in order to comply with EU law or the requirements of the Convention.”

Conclusion

Through sophisticated reasoning, the CA has achieved a result which is fair in the minds of the coterie of employment lawyers, and which will be of practical service to many litigants (be they workers, employers, or those giving or receiving goods and services) by ending legal uncertainty. Is it right, however, for a court to respond to a statutory provision which has no satisfactory meaning by implying into the statute words which make conduct unlawful? The CA did not hold that sub-section 108(7) must be deleted as meaningless, but left it to “some other court” to “cudgel its brains about what real effect, if any, it has”. In spite of its hesitation to delete the sub-section, the CA felt confident in asserting that, whatever it might mean, the sub-section was definitely inconsistent with post-termination victimisation being permitted.

It seems to me that the CA has turned a statutory provision, which is, at best, meaningless, and is, at worst, ambiguous and inconsistent with the UK’s equality obligations under EU law, into a provision which renders conduct unlawful. Can the position really be said to be analogous to Inco? The Equality Act 2010 separated out harassment and victimisation into different claims, after decades of being aspects of discrimination. In my view, the difficulty is that, whilst the draftsman clearly drafted poorly, exactly what he was up to in terms of tinkering with the law on discrimination, harassment and victimisation and how they should interrelate, remains very unclear, yet, I feel sure that he was up to something.

Our clever judges know how to achieve the result which right-minded employment lawyers desire, through the deployment of deft judicial reasoning, but is it right to develop principles of judicial interpretation which permit a statutory provision to mean that conduct which is stated to be lawful is held to be unlawful?

Access to justice in general is a matter of acute concern to barristers right now. Within the field of employment law, the introduction of ET fees is having a profound effect on discrimination litigation, a part of the legal system which is intended to protect the most marginalised and disadvantaged groups of workers. Is it idealistic and unrealistic for me to long for judicial reasoning which makes sense to those outside the inner circle of employment lawyers, in regard to what the major discrimination statute means? Does the type of judicial reasoning which the CA has deployed in Jessemy v Rowstock Ltd give discrimination law a bad name?

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March 5, 2014

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TUPE

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Something else BIS missed about TUPE

The new fangled TUPE provisions contain the express ability for an employer at Reg 4(5B) to change a term incorporated from a collective agreement where (a) the variation takes effect more than one year after the transfer and (b) after the variation rights are no less favourable overall.  The problem is that complying with these requirements causes significant problems with an often overlooked section of TULRA 1992.

TUPE continues in 5(C) that “Paras (5) and (5B) do not affect any rule of law as to whether a contract of employment is effectively varied“.  Which got me thinking as to other rules of law.

One of the ones it appears BIS did not think about was Section 145B of TULRA 1992.  To save a quick rummage through the statute books, section 145B gives individuals the right not to have their employer make an offer to have any term of employment no longer determined by a collective agreement.

So, for example, individuals transfer to a new employer which wants to have nothing to do with collective agreements or trade unions.  The new employer grumbles (they usually do) but abides by the immediate terms of the collective agreement to remain on the right side of TUPE.  It then avails itself of the ability to change under TUPE 4(5B).  It makes sure the offer is not less favourable and in certain circumstances is actually more favourable as they are offering better benefits (e.g. PHI).  It would appear, however, to fall straight into the prohibition in Section 145B TULRA.

The remedy for a breach of s.145B appears somewhat confusing. Or at least it did to me.  There is the financial element (£3,600 for the employers temerity for simply making an offer in compliance with TUPE but having forgotten about s.145B and simply having made the offer) in 145E(3), which I’m calling the “temerity award”.  Then

“(4)Where an offer made in contravention of section 145A or 145B is accepted—
(a)if the acceptance results in the worker’s agreeing to vary his terms of employment, the employer cannot enforce the agreement to vary, or recover any sum paid or other asset transferred by him under the agreement to vary;
(b)if as a result of the acceptance the worker’s terms of employment are varied, nothing in section 145A or 145B makes the variation unenforceable by either party.”

After a bit of double reading (and a diversion as to whether “worker’s agreeing” is grammatically correct), I would suggest (a) deals with the worker agreeing to vary, e.g. at a future point in time, but not actually varying; and (b) with when the variation has actually occurred.

If an employer complies with TUPE it can vary terms incorporated from a collective agreement, but if this means the individual will not be covered by that collective agreement then s.145B applies and prohibits the change.  But if the individual has actually varied their terms the change is effective.  If, however, the individual has not yet varied, they can presumably cherry pick the best terms and refuse to implement the variation.  Which is a bit odd or appears to contradict what Reg 4(5B) of TUPE is trying to achieve.

The only ways in which the employer avoids paying the £3,600 temerity award are, as I see it, presumably either to negotiate collectively with the trade union it does not recognise over the collective agreement it did not sign.  I can’t see a union agreeing to the change to the collective agreement.  This leaves the employer in the position of making the offer, paying the award and only then implementing the change if the employees do actually vary the contract.  Alternatively the wording of 145B(1)(a) appears to sanction picking off individual employees two by two (readers can insert their own Noah’s ark joke here) if the variations are different.

I’m unsure as to what irks me most about this.  That TUPE doesn’t work with s.145B, that I’d forgotten about s.145B altogether or that the employer will need to take a temerity award gamble on each employee’s contract it wishes to vary.  Or something else.  It might be the grammar.

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February 28, 2014

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NMW naming & shaming: a start, but not much of one

So, Vince Cable has (sort of) stuck to his word. Back in January, he told MPs that he expected to see “a significant number” of employers, found by HMRC to have flouted the National Minimum Wage, to be ‘named & shamed’ under the new BIS scheme “by the end of February”.  The new scheme came into being on 1 October last year, replacing a previous scheme, introduced in January 2011, under which only one employer was ever named & shamed.

And so, on the very last day of February, BIS has just issued a press release in which it names five offending employers:

  • Peter Oakes of Peter Oakes Ltd, Macclesfield, neglected to pay £3619.70 to 2 workers
  • Lisa Maria Cathcart of Salon Sienna, Manchester, neglected to pay £1760.48 to a worker
  • Mohammed Yamin of Minto Guest House, Edinburgh, neglected to pay £808.56 to a worker
  • Anne Henderson of Chambers Hairdressers, Middlesbrough neglected to pay £452.22 to a worker
  • Ruzi Ruzyyev a car wash operator in Carmarthen neglected to pay £225.38 to a worker

However, as the TUC was quick to point out, all five are “small businesses who’ve underpaid [just one or two] members of staff. There are companies out there who are cheating hundreds of staff out of a legal minimum wage. These are the biggest offenders and their pay crimes must be made public too.”

Moreover, I’m not sure I’ll find any dictionary that defines ‘five’ as ‘a significant number’.  HMRC imposed penalties for flouting the NMW on just over 700 employers in 2012-13, and over 900 employers  in both 2011-12 and 2010-11.  So it seems reasonable to conclude that HMRC has imposed such penalties on some 250-400 employers since the new ‘naming & shaming’ scheme came into force on 1 October last year (and yes, I have asked for the actual number, by means of a FoI request, but HMRC has declined to answer).  Even allowing for the appeal process, which Cable said in January takes “roughly 150 days” – though quite why it should take that long in all cases isn’t at all clear – we might have expected a first tranche of at least 60 employers to have been named & shamed by now.

So, why have only five (small) employers been named & shamed to date?  And will a significant number of employers be named & shamed in the coming weeks and months?

Time will tell. But, credit where credit’s due, at least BIS has made a start.  Let’s hope those press releases keep coming.

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February 14, 2014

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Just how desperate is the MoJ to keep a lid on the impact of ET fees?

Last week, in rejecting the judicial review brought by UNISON, two High Court judges noted the “dramatic fall in [employment tribunal] claims” in September, the most recent month for which official figures are available, and made clear they would expect to hear the issue again should the Lord Chancellor’s “optimism” that the number of claims has since bounced back to more normal levels prove unfounded.  As I wrote elsewhere, the judges nailed Grayling’s genitals to the wall, and – if you’ll excuse the pun – a lot now hangs on the next set of quarterly statistics.

Which begs the question: why is the Ministry of Justice so resistant to issuing any more recent statistics, if they would remove the Lord Chancellor’s genitals from risk?  In recent weeks, the Ministry has declined to answer a straightforward parliamentary question on the matter, and has wriggled its way to not answering repeated Freedom of Information requests from me.

In those FoI requests, I asked both for basic figures on the number of ET claims in the months since September, and for the number of ET fee remission applications made and refused.  And in November, in response to a FoI request by Plumstead Law Centre, the Ministry had actually answered the latter question (FoI 86412).  So, after they had stonewalled my request, submitted in late December, for more recent figures, on 20 January I made a further request, using exactly the same wording as Plumstead Law Centre had in November.  And this is the reply I received on Wednesday:

Thank you for your email of 20th January 2014, in which you asked for the following information from the Ministry of Justice (MoJ):

“How many Employment Tribunal Fee Remission applications have been received by HMCTS since 1 July 2013, and how many of these applications were rejected?”

Your request has been handled under the Freedom of Information Act 2000 (FOIA).  I can confirm that the Ministry of Justice holds information that you have asked for.  However, because the cost of complying with your request would exceed the limit set by the Freedom of Information Act, on this occasion I’m afraid I will not be taking your request further.  In this letter I explain why that is.

The law allows us to decline to answer FOI requests when we estimate it would cost us more than £600 (equivalent to 3½ working days’ worth of work, calculated at £25 per hour) to identify, locate, extract, and then provide the information that has been asked for.  In this instance to provide you with the information we would be required to conduct a manual trawl of fee remission files to obtain the information requested. Each case file would take approximately 15-20 minutes to go through the file, to identify if that application was an application which had been re-submitted, the level of fee payable and the outcome/decision made.

You refer in the body of your email request that information was provided previously in FOI reference 86412.

The information provided in [that] response was taken from a manual count of the remission applications received and processed by the Employment Tribunal (‘ET’) and not taken from the supplier responsible for the maintenance of the fees and remission database (Jadu Ltd). Although this information was provided it should have been explained that this was a manual count and may not be an accurate number of the applications received.  This manual count is no longer being carried out by the ET, as the information is now recorded on the remission database.  To obtain the information requested requires interrogation of the employment tribunals’ fees and remission database, and quality assurance checks on that data to ensure it is accurate, reliable and in a form suitable for publication.

We are in the process of putting this system in place, but it is not currently available.  As explained in the response to your previous request we are not in a position to provide the information requested without manually trawling through all of the files where a remissions application has been received.  This process is estimated to cost more than the limit of £600.  

So, the number of fee remission applications made and decided is now recorded on an ET fees & remission database. But to extract from that database the number of ET fee remission applications made and decided to date would involve more than 3½ days of work? Really?  What is recorded on this ET fees & remission database, if not the number of ET fee remission applications made and decided?  How much is the Ministry paying Jadu Ltd. to provide and maintain this database?  Have I stumbled across yet another public sector IT fiasco?

Or is the Ministry just telling porkies to protect the Lord Chancellor’s genitals from High Court judges?

Postscript:  Since posting the above, I’ve come across this written answer, yesterday, to a parliamentary question by Ian Murray MP, seeking the number of ET fee remission applications made and determined:

Mr Vara: Data concerning outcomes of fee remission applications made, in employment tribunal cases and in other court and tribunal jurisdictions, are not routinely published.

HM Courts and Tribunals Service is working with partners to develop appropriate system reporting tools that will enable extraction, interrogation and subsequent quality assurance of data, including the data requested. Until those system reporting tools are developed, later this year, we will not be able to provide the data requested.

The Government has previously said that it plans to publish a Post Implementation Review, assessing and reporting on the impacts of fee-charging on the employment tribunals system.  The reporting tools we are developing will help us to undertake that work.

As in my previous answer, my officials are currently undertaking this work, and I will write to the hon.  Member as soon as I am able.

So, the Ministry of Justice is paying Jadu Ltd. to provide and maintain an ET fees & remission database that currently has no reporting tools, and therefore cannot provide any, er, data.  Someone should sort that out.  Because the Lord Chancellor really doesn’t like to see taxpayers’ money wasted on IT fat cats. [Are you sure that’s right? Ed]

Postscript 2: But what is this? Oh, it’s the website of Jadu Ltd., and their “exemplar case study” number 23: ET fee payments.  Yep, that’s the ET fees & remission database.  So, what does the Jadu “exemplar case study” tell us?

Well, somewhat superfluously, it tells us that “potentially massive savings” to the Ministry of Justice have “huge dependency” on Jadu delivering “a high quality IT system”, because – and I’m really not making this up – “media reaction to IT failure [could] significantly amplify the political sensitivity and national media reaction”.  Gosh, really?

Yes, really.  So, a “product owner was established at MoJ and at Jadu, both of whom worked closely to make key decisions”.  Well, that has to be better than only one of them working closely.  Whatever, they “communicated on a daily basis”, re-adjusting the priorities and “moving more important things up the list and less important things down the list”.  Phew, for a minute there I thought they were going to get it the wrong way round!

Not only that, but the closely-working product owners “established a Definition of Done”.  Note the capitals.  Not done, but Done.

After that, well, there was “change audit and versioning”, some “migration and roll back tests”, a few “sprint demos”, a dash of “code versioning”, some “user and usability tests”, and – finally – “iterating the delivered solution”.  This was essential, because “with many IT projects in the public sector failing to deliver value, it is essential that the Government pro-actively promotes better ways of working”.  You can say that again.

And all this versioning and “Test Driven Development” meant that the delivered ET fees & remission database is “of a very high standard”, with “216 different user journey routes”. Two hundred and sixteen!  Not only that, but it was “launched on 27 July, two days ahead of the deadline”.  And a “well rehearsed launch” led to “a very high quality service being delivered”.  Yes, yes, we got that.  Unfortunately, being of “a very high standard” seems not to include having the “reporting tools” to deliver basic data on ET fee remission applications.  Maybe no-one versioned the code for that.

But hey, Jadu “built what was needed, not what was agreed at the start”.  No surprise, then, that in November Jadu and it’s “exemplar 23” – that’s the Jadu ET fees & remission database to you and me – was shortlisted for an award.  Here’s a nice photo of the Jadu team off to the award dinner.

And all this ‘high quality’ for just … £1.5 million!  Well, that’s what the Jadu website says.  According to a Ministry of Justice press release, seemingly issued to coincide with the award dinner in November, it was £2 million.  But I guess only little people quibble about £500K.

Yes, the Lord Chancellor with an aversion to fat cats has handed as much as £2 million to Jadu, in return for a database that, according to the Ministry of Justice, can’t (yet) count basic data.  And, since you ask, Jadu are doing very nicely on it, thank you.  Indeed, thanks to the Ministry of Justice contract, Jadu has “been transformed, with significant growth and investment”, and has now “expanded into Australia, becoming a truly global player”.  This is what the Lord Chancellor had to say in November:

“Jadu is a perfect example of how small businesses in the private sector can help transform our justice system, driving innovation and better value for hardworking taxpayers – and it’s something I want to see much more of.”

But the last word has to go to Suraj Kika, founder and chief executive of Jadu and, seemingly, a budding philosopher:

Sometimes, to fix things – you need to break them first.

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January 24, 2014

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Discrimination, Tribunals

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The one in which the Minister says it does not cost £1200 to pursue an ET claim for discrimination

In the House of Commons yesterday, it was looking as if yet another session of oral questions to the Department for Business, Innovation & Skills (BIS) was going to pass without Vince Cable and his ministerial team being pressed on arguably the most damaging element of the Coalition’s erosion of workplace rights: the hefty, upfront employment tribunal (ET) fees introduced last July.

But then up popped Labour backbencher John Cryer with this poser (scroll down to column 438): “The Minister confirmed just a few minutes ago that women who become pregnant can and do face discrimination at work.  Why, then, are the Government going to charge those women £1,200 to go to an industrial tribunal?”

Glossing over the fact that employment tribunals haven’t been called ‘industrial tribunals’ since 1998, the response by Jenny Willott – the Liberal Democrat MP covering as BIS employment relations minister during Jo Swinson’s maternity leave – is worth setting out in full:

 I am disappointed that this figure is being bandied around yet again. It does not cost women more than £1,000 to go to a tribunal.  It costs only £250 to start a claim, and most cases are finalised well before a hearing.  For those who end up going to a hearing, fee remission applies in many cases, and if the women win their case, costs are often awarded against their former employers.  It does not cost what the hon. Gentleman suggests, it is scaremongering by Labour Members, and I am concerned that this will put women off taking cases against their employers when they have been unfairly discriminated against.

Now, it’s true that it costs “only” £250 – the equivalent of a week’s wages if you’re on the national minimum wage, but clearly little more than loose change to a Parliamentary Under-Secretary of State – to start a claim for pregnancy, maternity or any other form of discrimination.  But there’s little point paying to start a claim unless you intend to finish it, and if the respondent employer doesn’t settle your claim that will cost you another £950 – or another four weeks’ wages if you’re on the minimum wage.  And why would the respondent employer settle your claim before seeing whether you are prepared to pay the £950 hearing fee on top of your £250 issue fee?

Then again, according to Ms Willott, that shouldn’t be a problem because “fee remission applies in many cases”.  It does?  I’d like to hear Ms Willott’s definition of ‘many’, because the only figures the Ministry of Justice has been willing to release to date show that 80 per cent of fee remission applications are rejected, and that just four per cent of claimants actually receive any fee remission.  It’s entirely possible that the latter proportion has increased in recent months, but in that case why has the Ministry of Justice repeatedly declined to release more recent figures?

So, not much chance that you’ll get any fee remission then.  But at least “costs are often awarded” against losing employers.  They are?  According to the official ET statistics, in 2011-12 costs were awarded to just 116 (0.005 per cent) of the some 24,000 claimants who won their case in the tribunal (either at a hearing, or through a default judgment).  Call me picky, but I wouldn’t say that was “often”.  Indeed, claimants are somewhat more likely to have costs awarded against them.

So, will many women who have been subjected to pregnancy or maternity discrimination by their employer be ‘put off’ from bringing an ET claim by John Cryer’s parliamentary question?  I guess that comes down to whether you share the Minister’s rather unusual definition of ‘many’.  But I think we can be sure that a great many more will be put off by having to fork out up to £1,200 in upfront fees, with little chance of any fee remission and – should they win – almost no chance of having costs awarded to them by the tribunal.

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January 22, 2014

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Have the Government Made Another Mistake on ET Fees

In the Judicial Review brought by Fox and Partners in the Court of Session in Scotland in respect of employment tribunal fees, the Lord Chancellor conceded that Equal Pay claims were type A claims for the purposes of the Fees Order because they are complaints in relation to a breach of the sex equality clause  in terms of section 66 of the Equality Act 2010. This is despite the Fees Order saying they were Type B claims attracting the higher fee on issue and hearing.  It was suggested this was a drafting error and Ministers would want to amend the Fees Order.

I think I may have spotted a further drafting error.  I recently chaired a working party for the Employment Lawyers Association responding to the ACAS consultation on amending paragraphs 15 and 36 of the code of practice on Discipline and Grievance following the EAT decision in Toal and another v GB Oils Ltd UKEAT/0177/13DM.  If you are interested, you can find our response here http://www.elaweb.org.uk/sites/default/files/docs/ELA%20Response_ACAS%20consultation%20on%20Code_Discip_Griev_7Jan14%20%282%29.pdf

It is necessary for the Chair of the Association to approve any response before it is submitted.  He approved our response but asked me whether a fee was payable to bring a claim under Section 10 of the Employment Relations Act 1999, where an employer refuses to allow a worker to be accompanied by a companion of their choice at a grievance or disciplinary hearing.  I knew the answer to that was “yes” but I couldn’t answer the follow up question which was what was the level of fee.  I always assumed it was a type A claim.

I went to the fees order and was very surprised to see the claim was not listed in Table 2 of Schedule 2 as a type A claim, attracting the lower fee of £160 on issue and £230 for hearing.

This means that an worker wishing to bring a claim under S.10 of the Employment Relations Act 1999 must pay an issue fee of £250 and a hearing fee of £950.

Bearing in mind that the remedy for breach is compensation of an amount not exceeding 2 weeks pay and a weeks pay has the usual maximum of £450, a worker will have to spend £1200 to get back £900.  Of course, if they succeed they should have their fees paid by the losing party, but this is not automatically the case.

But it is worse, as a result of the decision in Toal  we now know that the word “compensation” in S.11 (3) of the Employment Relations Act 1999 requires the worker to prove they have suffered actual loss and nominal damages may be appropriate where no actual loss can be proven.

Type B cases are meant to be the more complex and costly claims.  I cannot believe the Government assessed S.10 claims are complex and so more costly.  Currently, who is going to speculate £1200 to win a maximum of £900 in compensation?  The right under S.10 becomes meaningless.

So is this a further example of the rushed nature of introducing the legislation on employment tribunal fees last July leading to errors in drafting?  Will the MoJ agree to remedy the error in the same way as they did with Equal Pay claims?

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January 22, 2014

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NMW ‘naming & shaming’: Vince Cable gives hostage to fortune

You may by now have forgotten – always assuming you noticed in the first place – that, last Wednesday, Labour devoted one of their precious Opposition Day debates to the National Minimum Wage (NMW).  And you’d be in good company, for the entire Labour front bench seem to have done their best to forget it too.  And with good reason.

The most obvious reason is George Osborne’s brilliantly-timed NMW coup on Thursday evening, which seemed to catch shadow ministers not just napping but comatose.  And the real genius of Osborne’s strike was in crudely tossing aside the 15-year-old political pact that setting the NMW rate will be left to the Low Pay Commission (and, bar a few growls from the CBI, getting away with it).  For Osborne knew Ed Miliband couldn’t use his set-piece speech on the economy the following day to launch a counter-attack – “I’ll see your £7.00 per hour, George, and raise you £7.50 per hour”, perhaps – without the trade unions throwing their toys out the pram.

But even before Osborne launched his coup via Nick Robinson and the BBC, shadow work and pensions secretary Rachel Reeves, who kicked off Wednesday’s debate, had blasted both barrels of her shotgun through Labour’s own feet by launching a puerile and ill-informed ad hominem attack on business secretary Vince Cable, over his non-attendance at crucial votes on the then National Minimum Wage Bill in 1998.  An admirably restrained Cable initially declined to rise to the bait, but when he did it was both dignified and devastating:

Vince Cable: The Honourable Member for Leeds West [Rachel Reeves] made a great deal of the fact that, as she put it, the Conservatives opposed the national minimum wage and many Liberal Democrats opposed it. She speaks with all the self-confidence of somebody who was not here at the time.

Chris Bryant (Labour): You were and you didn’t vote.

Vince Cable: I did not particularly wish to raise this, but I am being asked personally to explain why I did not vote [in 1998]. It had a lot to do with the fact that my late wife was terminally ill at the time and I was in the Royal Marsden hospital. That is why my voting record at the time was poor on that and other issues.

As Isabel Hardman noted in a scathing Spectator blog post the following morning, “it’s not the first time someone has made the mistake of assuming that non-attendance at a vote has a sinister rather than sad explanation, but it rather blunted Labour’s attack on the Liberal Democrats” and was “all the more surprising given [Labour’s] recent rage over a Sun article describing Lucy Powell as ‘lazy’ when she had in fact been on maternity leave”.  Both Reeves and Chris Bryant later apologised to Cable.

For Labour and the hapless Reeves – who must surely be looking for a new researcher – it was all downhill from then on, and I’d be very surprised if anyone in Labour ever mentions this car crash of a debate ever again.  Cable was even able to parry Labour’s pledge to increase the civil penalties for non-compliance with the NMW (or ‘fines’, as shadow ministers wrongly insist on calling them) by confirming plans, first announced by the Prime Minister in November, to substantially increase the penalties from next month.

However, before sitting down Cable himself made a comment that I suspect may also come to be seen as something of a mistake.  Without having been pressed to defend the fact that only one employer has been ‘named and shamed’ for non-compliance with the NMW by his department since he introduced the practice in January 2011, the business secretary volunteered that “new guidelines for the naming and shaming process were issued to HMRC in October” – as indeed they were.  And he went on to say:

“There is also the question of due process.  Companies that are about to be named and shamed can appeal, and it is estimated that that process takes roughly 150 days.  I imagine that a significant number of cases would begin to emerge by the end of February; we can test that when the issue arises.”

The new guidance issued to HMRC in October under “revamped plans to make it easier to clamp down on rogue businesses” is certainly wider in scope than the original, clearly duff scheme.  According to the BIS press release at the time, “the revised scheme will name employers that have been issued with a Notice of Underpayment (NoU) by HMRC. This notice sets out the owed wages to be paid by the employer together with the [civil] penalty for not complying with minimum wage law”.  And, every year, HMRC issues some 700 NoUs.  So, were every employer issued with a NoU to be ‘named and shamed’ under the new scheme, then allowing for Cable’s 150-day due process we might indeed expect a first tranche of some 60 employers to be ‘named and shamed’ in late February or early March.

However, shortly after this revamp of the naming and shaming scheme came into force in October, the BIS employment relations minister, Jo Swinson, let slip on Twitter (in an exchange with the magnificent @HRBullets) that employers will not be ‘named and shamed’ via some kind of central, publicly-accessible register, as one might reasonably expect, but “through [BIS] press releases to maximise coverage” in “local [and] regional newspapers”.  So, either BIS will be issuing an awful lot of ‘naming & shaming’ press releases each month, or it will be releasing one or two press releases each containing the names of dozens of employers.  And, frankly, neither scenario sounds terribly likely to me.  Certainly, Jo Swinson didn’t take the opportunity provided by the Twitter exchange to confirm that all employers issued with a NoU by HMRC will be ‘named and shamed’ by BIS.

Whatever, as Vince Cable says, come the end of February, we will be able to test the issue.  And I will be very happy to be proven a cynic.

Postscript: Since posting the above, I have come across this written statement by Jo Swinson’s maternity cover, Jenny Willott, in the House of Commons yesterday in response to a PQ by Paul Maynard MP:

The revised NMW Naming and Shaming scheme which came into effect on 1 October 2013 made it easier to name employers that break national minimum wage law. By naming and shaming employers it is hoped that bad publicity will be an additional deterrent to employers who would otherwise be tempted not to pay the NMW. We anticipate naming employers very soon.

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January 9, 2014

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Has the Low Pay Commission jumped the shark?

It is a truth not previously acknowledged that one way to unite the TUC and CBI in outrage is to suggest that the Low Pay Commission has outlived its original purpose, and that control of the national minimum wage (NMW) rate might now be best reclaimed by the people we elect to run the country.

I know this because, late on Tuesday evening, after a day of ever more surprising media reports of machinations within the Coalition over a possible ‘inflation-busting’ hike in the NMW rate, I was impertinent enough to make such a suggestion on Twitter.

Within a few minutes, my tweet had prompted sharp responses from both Nicola Smith, Head of Economic & Social Affairs at the TUC, and Neil Carberry, Director of Employment & Skills at the CBI.  This in itself was intriguing, as neither Nicola nor Neil had previously exhibited any great inclination to respond to anything I might have said or written.  But what most tickled my interest was the degree of solidarity Nicola and Neil showed in seeking to pour a large bucket of cold water over my impertinence.

Every year since 1999, the Low Pay Commission has laid waste to a small forest in producing an inch-thick report on the NWW that is read by few if any outside a small circle of NMW policy geeks (and the handful of unfortunate civil servants charged with drafting the government’s response).  In my last job I had a whole shelf of these reports, and laid across a road they would easily have stopped a marauding tank.

But have these hefty reports, and the existence of the Commission itself, done much in recent years to improve the plight of the five million or so workers in the UK economy who now languish on low pay?  The Commission is, after all, the Low Pay Commission, not the Minimum Wage Rate Commission.

Well, with all due respect to the hard work and undoubted integrity of the individual members of the Commission, I’m not sure that low paid workers have been terribly well served by the Commission in recent years.  A succession of paltry, below-inflation NMW rate increases since 2009 have resulted in an hourly rate some 45 pence below what it would be if it had risen with the cost of living since June 2010.  The critical issue of enforcement of the NMW has been woefully neglected.  And where has the Commission been in debate about the shocking growth of in-work poverty?

How dare I even think such heresy! “Over time NMW workers have done better than both inflation AND wages”, retorted Neil Carberry.  However, as the Low Pay Commission itself noted in its 2012 report, “most of the real and relative increases in the minimum wage occurred as a result of the comparatively large up-ratings from October 2001 to October 2006. Since that time, the adult rate of the minimum wage has risen more or less in line with average earnings, but has lagged price increases”.  The largest up-ratings were in 2001, 2003 and 2004, and those relative hikes were entirely justified given the excessively cautious (i.e. low) rate at which the NMW was introduced.

Nicola Smith, meanwhile, was even more extravagant about the recent influence of the Commission: “without the LPC would we even still have a NMW?”  Well, yes, I’m sure we would Nicola, as I don’t think even Nick Clegg could have convinced his MPs, let alone his party membership, to tolerate abolition of the NMW itself – always assuming that the Liberal Democrats would have needed to take such a stand.  Any mooting of abolition by deep blue Conservative ministers would have faced strong internal opposition from MPs and think tankers such as Matthew Hancock, Guy Opperman, Robert Halfon and Ryan Shorthouse.  And, as of this week, Conservative ministers and MPs of all shades of blue are madly trying to outbid each other both in their regret for their party’s past opposition to the NMW, and in their personal enthusiasm for a substantial hike (of as much as £1.00 per hour) in the NMW rate now.

So, given where we are now, with all three main parties scrabbling to position themselves as the shoutiest champion of the NMW, what are the “very big risks to ending the Commission approach” that so alarm the TUC and CBI?  Apart from, that is, the terrible risk of the TUC and the CBI having a tad less direct influence on government policy.

Well, I’m not sure that I can see any significant risks. The Commission and its plodding, bipartisan approach were products of the excessive caution and timidity of the first New Labour government in relation to any policy that might possibly fetter corporate power.  And, in the early years of the NMW, that approach undoubtedly served a valuable function: to take the politics out of the NMW whilst it bedded in.

But to my mind the NMW is now safely cemented into the UK’s labour market policy architecture.  In the words of the Conservative pressure group, Bright Blue, “there is now a strong academic consensus that a sensible minimum wage does not cause unemployment.  Firms adapt well: reducing profits or pay differentials, or boosting productivity”.  And, armed with data, analysis and advice from civil servants, advisory bodies and political advisers, our elected politicians routinely take positions on, and make decisions about, any number of economic issues at least as consequential as what the NMW rate should be.  In short, the Low Pay Commission has – just like the Happy Days of my youth and Sherlock last weekend – jumped the shark.

It’s time to put politics back into the National Minimum Wage.

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January 6, 2014

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Tribunal fee remission: a very small fig leaf?

In response to widespread concern about the detrimental impact on access to justice of the employment tribunal fees regime introduced on 29 July last year, Coalition ministers have repeatedly claimed that low-income claimants will have their access to justice protected by the accompanying fee remission scheme.  In late October, for example, just days after the Ministry of Justice published provisional statistics indicating a sharp fall in the number of individual claims since July, the BIS employment relations minister, Jo Swinson, stated (in a letter to Maternity Action):

“The Government believes that all users of the tribunal system should make a contribution to the costs where they can do so, regardless of the type of claim.  Where claimants cannot afford the fees, the remission system ensures that nobody will be denied access to the tribunal.”

However, the  tribunal fee remission scheme, under which a claimant can receive full or partial exemption from the fee, is simply a revised version of the pre-existing County Court fee remission scheme, which in 2012 was condemned by Citizens Advice as “not fit for purpose” on account of its complexity and maladministration by HM Courts & Tribunals Service.  Under this revised scheme, any individual living in a household that has £3,000 or more in savings will not be entitled to any fee remission. This eligibility criterion applies to everyone, including those out of work.

And let’s not forget, the upfront fees introduced last July are substantial.  To issue and pursue a claim for unfair dismissal, for example, costs £1,200 (an issue fee of £250, and a hearing fee of £950).  Will summarily dismissed workers who have acted prudently to protect their family from sudden financial shocks by building up moderate savings of just £3,000 want to risk £1,200 of those savings on a tribunal claim for unfair dismissal, when there is no guarantee that the employer will repay the fees even if the claim is ‘successful’?  As recent government research has shown, half of the workers awarded compensation by a tribunal do not receive their award in full, and there’s no reason to think that those employers who fail to pay an award will be any more forthcoming when it comes to the repayment of hefty fees.

Furthermore, the upper income limits, above which claimants will not receive even partial remission of the fees, are set extremely low.  An analysis by economist Howard Reed, commissioned by the TUC, shows that “even among households where someone is earning just the national minimum wage, fewer than one in four of these workers will receive any [fee remission] and will have to pay the full fees”.  Reed’s analysis further suggests that just one in nine disabled workers, and one in 20 workers aged 50-60 (i.e. those most at risk of age discrimination) would qualify for full fee remission.

So, has the fee remission scheme protected access to an employment tribunal since the introduction of fees in July?  Last week, I stumbled across a Ministry of Justice response to a Freedom of Information request, published on-line by the Ministry in November (FoI 86412) but, as far as I can tell, not otherwise reported by whoever it was that submitted the request.  This states that, of “the 852 employment tribunal fee remission applications submitted nationally between 29 July and 11 November, 672 were rejected”.  That is a rejection rate of 79 per cent.

In other words, during the first three months of the fees regime, just 180 tribunal claimants received full or partial fee remission.  And we know that, in the same period, there were some 4,500 tribunal claims by individual workers (i.e. single claims; I have left multiple claims out of this analysis).  So, only 22 per cent of all single claimants applied for fee remission, and just four per cent of all single claimants received full or partial fee remission.  Yet as recently as September 2013, in its final Impact Assessment on the revised fee remission scheme, the Ministry of Justice suggested that 31 per cent of all claimants would be eligible for full (25 per cent) or partial (six per cent) fee remission.

Furthermore, the figure of 4,500 individual claims in the three-month period August to October is substantially lower than the average number of such claims prior to the introduction of fees.  But for the introduction of fees, we could have expected about 13,200 single claims in that period.  So a mere 1.4 per cent of the individual claimants we might have expected in the first three months of the fees regime received full or partial remission of the fees.

Whichever way you look at it, the fee remission scheme didn’t do a great deal to preserve access to justice in the first three months of the fees regime.  That said, the fee remission application rate may have risen in subsequent months, and the rejection rate may have fallen, as legal advisers became more familiar with both the fees regime and the fee remission scheme.

Well, maybe – time will tell.  But there’s certainly no room for the sort of ministerial complacency exhibited by Jo Swinson in October.  If the numbers don’t improve significantly, and soon, the fee remission scheme is going to look a very small fig leaf.

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News from the Employment Tribunal National User Group

I spent most of this afternoon at a meeting of the Employment Tribunal System National User Group. ETSNUG is chaired by the President of Employment Tribunals (England and Wales) and includes reports from both HMCTS and ACAS, so it’s a good opportunity to find out how the employment tribunal system looks from the inside.

The following is based on my note of the meeting. While obviously I think it’s an accurate account, it shouldn’t be taken as an official statement from the President, HMCTS or ACAS.

It’s also quite long — I’ve tried to put the most interesting stuff at the beginning.

Claims accepted

After the large drop in August and September, the number of cases accepted by the tribunal is rising slowly.

Both the President and HMCTS expect a slow rise until the numbers stabilise at their post-fee level. But it’s too early to say what that level will be — particularly with early conciliation coming in from 6th April 2014. They don’t expect to be able to draw clear conclusions about the post-fees level of tribunal work for another 12 months.

ACAS reports that the number of calls to their helpline remains steady. This suggests that the underlying level of workplace conflict remains much the same.

Fees / Remissions

About one third of remission applications are being granted on the first decision. Most remissions that are granted are granted in full — there are very few partial remissions.

Initial decisions are being made fairly rapidly. The oldest remission applications without a first decision is about two weeks old. Contrary to speculation (some of it mine) there is no large pile of unprocessed remission applications building up in Leicester.

However, there is a time-line impact, because it takes time to deal with fees / remission before accepting the claim and HMCTS statistics have always worked with accepted claims. They are considering whether to start publishing information on claims submitted as well.

HMCTS is actively reviewing the remission process, both within and beyond employment tribunals. They’re looking at the information provided to applicants and their own processes, with the aim of improving both the remission applications and the way they deal with them.

Apparently quite a lot of remission applications fail because, on their face, the applicant can’t pass the capital test (i.e. they have declared more than £3k disposable capital). There’s some suspicion that some unions require members to make an application for remission before they will fund the fee. If this is happening HMCTS would like them to change policy, because it’s causing unnecessary work.

Outstanding caseload

More than half of the outstanding caseload of about 600,000 claims isn’t ‘real’. In other words, it’s made up of airline working-time claims and insolvency claims, that are lodged with the tribunal, but which almost certainly won’t need judicial resolution.

Most of the claims heard by a tribunal are multi-day discrimination claims. A high proportion of unfair dismissal and wages claims settle.

Equal pay: almost all claims are against the state in one form or another. There are now very few central government claims and the number of claims against local government is dropping.

In general, the timeliness indicators in single cases have improved over the last four years. The average time to complete a case is dropping. Given the reduction in tribunal resources, HMCTS feels this is significant success.

Online portal

HMCTS is aware of difficulties with the online portal, both in terms of bugs and aspects of the process users would like to see improved. They’re working on both areas of this.

About 75% of claims now come through the online portal — compared with about 40% submitted online under the old system.

New Rules

From the tribunal’s perspective the introduction has gone smoothly and quietly.

Presidential guidance covering applications for postponements (and default judgments in Scotland) will be published in the next few days. These are the areas covered by the example guidance in the rules consultation. The published guidance will be very similar, but with a certain amount of updating and revision.

Next year, there will be more wide-ranging Presidential guidance, dealing particularly with case management. The ultimate aim is for there to be a single piece of umbrella guidance, online, with links to more specific guidance.

A Practice Direction under rule 88, providing for service on the Secretary of State, the Law Officers, and the Counsel General to the Welsh Assembly Government, in cases where they are not parties, will be released in the next couple of days. This will not involve any change in the current practice.

Early conciliation

We can expect regulations on early conciliation towards the end of January. The preparatory work within ACAS of producing guidance and training staff is going forward ahead of the regulations being finalised.

ACAS has added 40 new conciliators to its existing team of 240 in preparation. The new conciliators are appointed on a temporary basis (some are temporary promotions from within ACAS, some are on temporary contracts). Staffing levels will be reassessed when it’s clearer how much work there will be in both early conciliation and tribunal claim conciliation.

ACAS expects most applications for conciliation to be online. They hope to get 80% of applications that way. Their aim will be to call applicants the next working day.

The general approach will be to talk to both employees and employers and encourage them to consider engaging in discussion before a claim is lodged. ACAS will try to avoid pushing people into entrenched positions or linking the conciliation process with any tribunal claim. Partly for this reason, conciliation won’t involve writing down details of any potential claim.

Non-payment of awards

Ministers are engaged and concerned with this issue. They wanted up-to-date research to have an evidence base for further action. This has now been published.

It’s clear that non-payment is a multifaceted problem with no single solution. BIS are now considering their approach. They want to have better information and guidance for claimants — but they are also considering more wide-scale change to the way awards are enforced.

There is funding for a national pilot, in which claimants will be contacted about 42 days after the judgment. Half will only be asked if the award has been paid. The other half will be told about enforcement. BIS is hoping to establish if this sort of signposting makes a difference to enforcement rates. This pilot will go forward at the same time as other efforts on non-payment.

BIS is also concerned about phoenix companies. There has been some successful examples of them working with the investigative branch of the insolvency service. They hope to do more of this.

Financial penalties against respondents

These will come in from 6th April 2014. They are likely to be enforced by debt collection agencies, as HMRC debts are.

There might be consideration of the debt collectors enforcing unpaid awards to claimants at the same time. But discussions are at a very early stage on this.

Judicial mediation

The number of cases going to judicial mediation is slowly dropping. There appears to have been a change of policy among some parts of the public sector away from accepting mediation. Also the overall number of claims is down. Fees haven’t yet had an impact, because those cases aren’t yet far enough through the system.

At the moment no new judicial mediators are being trained. This will be looked at again when the full impact of recent changes can be assessed.

Regional reorganisation

This is mostly complete. The ultimate aim is that each of the 12 regions will have a single administration centre, which will do the back-office work for the other hearing venues in the region. For example, in London South administration is now concentrated in Croydon; Ashford is now purely a hearing venue.

The following regions are still being worked on:

  • South West: where decisions are still being made about what will happen.
  • East Midlands: Nottingham will be the regional centre. Administration will be from the Magistrates Court buildings. Hearings will be in the old coroners court, which will be refurbished for tribunal use. Although Leicester is the central administrative hub, it won’t deal with the any of the regional admin.
  • London North / West: decisions still being made about what to do.

Non-legal members

Now sitting in far fewer cases, generally only in discrimination claims. It’s very unusual for an unfair dismissal hearing to have non-legal members.

HMCTS estimate that there has been a hearing time saving of one third.

Tribunal / Court estate

This remains an important area of concern for HMCTS. The estate as a whole is at about 80% capacity. This means that, on any given day, one in five courts are empty. Some are permanently empty and some are underused.

This is a problem, because it means that the government is spending a lot of money on buildings that it isn’t using. Estate is likely to be a key issue in discussions of HMCTS funding and structure in the future.

There is a general principle that HMCTS will not hear civil cases in criminal courts unless it’s necessary. Where courts are refurbished it is common to curtain off criminal features, such as docks and the jury area. These aren’t permanently removed so that the court can repurposed again easily if necessary.

Recruitment

41 new fee-paid judges were appointed in the last round. They have recently completed their training and begun sitting.

There are no plans to recruit judges or non-legal members in the foreseeable future. Everyone is waiting to see what the ultimate impact of the changes is on work-load before making any decisions.