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22 October 2013
A proposed private member's bill, the 'Employment Tribunals (Representation and Assistance in Discrimination Proceedings) Bill', provides an opportunity to consider the issue of discrimination in workplaces across the UK. Despite existing anti-discrimination legislation, inequality and unfair treatment remain a reality for many people in the workplace and in the labour market.
A recent report by the Confederation of British Industry (CBI) claims that employers are losing faith in employment tribunals and cites the development of a compensation culture as being to blame for an increase in the number of claims being settled before they reach a tribunal. In the past 12 months, 50 per cent of firms reported a rise in the number of weak and vexatious claims, with 26 per cent settling claims they could have won. The CBI attributes this rise to an emerging 'have a go' attitude among employees towards making claims in the hope of being awarded a large payout. It also links the trend towards employers settling cases they were advised they could win out of fear of the legal costs involved in going to tribunal. The conclusions reached in the report have been cited many times by employers without examining the realities of the experiences of the victims of discriminatory treatment, or the capability of employers to manage their employees fairly.
The statistical evidence shows that, while there has been an increase in the number of weak cases being brought, the number of claims overall is falling, and non-genuine claims are identified by the Employment Tribunal Service and dealt with accordingly. Furthermore, employees who go to tribunal and are successful are not being awarded huge levels of compensation as is so often portrayed in the media. For the majority of cases related to discrimination, compensation ranges between just £6,000 and £7,000, and the likelihood of a claim being successful is only 2.4 per cent for all discrimination claims, in comparison with a success rate of 18 per cent for all cases, including discrimination. This is hardly evidence of a burgeoning compensation culture spiralling out of control.
The Government is bringing forward legislation to stop any US-style compensation culture getting out of control. However, only last year the independent Better Regulation Task Force concluded that it was a myth. While there is some evidence of a US-style litigation culture developing, as the growing number of 'no-win, no-fee' law firms demonstrates, the same is not true with respect to compensation awarded to victims of discrimination, evidenced by the low success rates of such cases at tribunal and by the typical amount of compensation awarded. Through their actions, however, employers are perpetuating the myth of a compensation culture, the consequences of which are just as dangerous. If it is known that organisations pay out simply to get staff to withdraw their cases from the employment tribunal, it is inevitable that there will be a rise in claims. A more appropriate description of this would be a 'buy-off' culture.
The new bill proposes reforms to assist employees pursuing discrimination claims against their employers by establishing an independent board to organise the provision of advice and representation. This would be a welcome development for individuals currently denied such support due to the unavailability of legal aid except at appeal. But will it make any dramatic difference to the number of successful outcomes in discrimination cases?
The bill does not seek to tackle the underlying issues surrounding discrimination claims. Employers attribute the settling of more cases to the desire to avoid the administrative and legal costs involved in going to tribunal. What is actually at stake is employers' reluctance to accept liability for discrimination within their organisations, preferring to pay off employees where necessary. Setting in place systems and procedures that actively prevent discrimination occurring in the labour market and the workplace would reduce and minimise the need for tribunals.
Lord Ouseley is chair of Focus Institute on Rights & Social Transformation (First)