The powers that be
7 May 2002
26 June 2013
Employment News — 27 January 2014: no deal: claimant’s rejection of offer to settle did not justify costs award
28 January 2014
14 November 2013
27 September 2013
5 November 2013
Any employment lawyer can tell you how employment law cases have mushroomed over the last few years. The figures produced by the Employment Tribunals Service (ETS) provides some of the detail. Each financial year the ETS produces a report detailing the numbers and nature of cases handled by the ETS. The latest available report covers 2000-2001.
Trials and tribunals
The majority of employment law cases are handled by the employment tribunals, some progressing to the Employment Appeal Tribunal (EAT), which possesses the powers of the High Court. Relatively few are initiated in the County Court or the High Court, but those that are do not appear in the ETS statistics - they sometimes involve larger sums of money and more serious issues. But all employment disputes have the potential to generate publicity, encourage new claims and raise applicants' expectations.
Tribunals were conceived as a fast, cheap, easily accessible means of resolving industrial disputes. They are independent judicial bodies; they are not bound by the rules of evidence and procedure under which courts operate. This makes them more attractive to applicants. But the lack of formality and procedure create other problems. A common complaint is that tribunals are no longer speedy and are far from cheap.
Cases have now become much more complex, and the number of individual rights and protections available to workers, many deriving from EU directives, has increased. In many types of claim, without expert help an applicant has little real hope of success or even of progressing to a tribunal hearing.
More and more claims
Year on year, the number of applications and sittings by employment tribunals and the EAT continues to rise and even accelerate. Applications have risen dramatically by over 60 per cent in the last three years and by some 25 per cent over the last year, totalling 130,408 in the year ended March 2001.
Tribunals have the power to determine over 70 types of complaint, including unfair dismissal (by far the most numerous), race, sex and disability discrimination, unlawful deduction of wages, breach of contract (but only up to £25,000) and redundancy pay.
During 1999-2000, tribunal jurisdiction was extended to claims under the National Minimum Wage Act 1998, the Public Interest Disclosure Act 1998 and the Employment Relations Act 1999. In 2000-2001 the Part Time Workers Regulations were implemented, which has created many more cases.
Legislation apart, specific cases and issues have also generated extra applications. Awaiting the House of Lords' ruling in Preston, were over 50,000 cases concerning the exclusion of part-time workers from occupational pension schemes. Over 12,000 of those were received by the ETS in 2000-2001.
More complex claims
Far more applications now comprise complaints under more than one jurisdiction, most typically unfair dismissal and sex or race discrimination, giving rise to statistical difficulties. The ETS records all applications under a 'main jurisdiction' but also records additional jurisdictions. A fair measure of the ETS workload, and the complexity and probable length of cases, can be shown by the total number of jurisdictions covered by each application. Over the last few years, the number of jurisdictions per application has increased from 1.4 to 1.7 and the complexity of even 'single issue' cases increased, with a commensurate increase in hearing times. In 2000-2001, the EAT received 1,869 potential appeals and 1,528 proceeded to full registration.
Quality and efficiency
The ETS measures itself against key targets, one of which is an assessment of the proportion of single jurisdiction claims reaching a first hearing within 26 weeks. The success rate on this declined from 88 per cent in 1999-2000 to 77 per cent for 2000-2001. The ETS says this is due to the 25 per cent increase in applications. The target for 2001-2002 was lowered to 75 per cent. The proportion of tribunal decisions issued within four weeks of the final hearing has remained consistent, at around 86 per cent.
Who claims what?
Most claims involve unfair dismissal, numbering 49,401 for 2000-2001. Second and third were Wages Act claims (41,711) and breach of contract applications (31,333). Sex discrimination claims top the discrimination charts at 25,940, with a large number of equal pay claims (17,153). New in 2000-2001 were some 12,280 claims under the recently introduced Part Time Workers Regulations.
Many claim, few are successful
Of 42,908 unfair dismissal cases, nearly a quarter were withdrawn and 17,130 (40 per cent) resolved under Acas conciliation settlements. Of the small number that proceeded to full tribunals on the merits, almost equal numbers were successful (4,936) and unsuccessful (4,809). A similar amount were 'disposed of otherwise', a catch-all that includes settlements other than those involving Acas, as well as other informal resolutions.
Of over 4,000 sex discrimination claims, Acas brokered settlements in more than a third, with a similar number withdrawn. Only 322 cases proved successful - 567 failed and 175 were disposed of otherwise.
A fair proportion of race discrimination cases (30 per cent of over 3,000 claims) was resolved by Acas and a similar number withdrawn. Few were successful at hearing (204) and more were unsuccessful (650-plus). Of 1,884 disability discrimination cases, over 39 per cent were resolved by Acas and 32 per cent withdrawn. Only 6 per cent were successful at tribunal, 15 per cent resulted in failure.
Unfair dismissals - (almost) no way back
Where applicants won unfair dismissal cases, reinstatement was awarded in only 0.1 per cent of unfair dismissal cases proceeding to hearing. Compensation was awarded in 17 per cent, but no award at all was made in over 25 per cent of successful cases.
Compensation - highs and lows
The ceiling for the compensatory award for unfair dismissal rose from £12,000 to £51,700 for dismissals after 25 October 1999. Although this may have led to more claims, there has been no dramatic increase on the level of awards, which in 2000-2001 averaged £5,122 (with a median of £2,744).
The maximum award for race discrimination (with unrestricted compensation) was over £200,000, the average award £15,484 and the median £8,000. Noticeably lower were the awards for sex discrimination (maximum £139,000, average £11,000, median £5,499). The average and median awards in disability discrimination cases were similar.
Tribunals - last resort or first port of call?
The Government has made attempts to reform procedure to reduce the number of claims heard by tribunals and to simplify the procedure for those claims. Some of these reforms were enacted in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001, which came into force in July 2001. Further reforms are proposed in the Employment Bill. One early proposal was for applicants to pay a fee upon issuing a claim, but this was dropped very early on.
Tribunals have always had (limited) power to make costs orders but rarely use them. The 2001 regulations made it compulsory for tribunals to consider a costs order where a party had acted "vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings has been misconceived" - where misconceived includes having "no reasonable prospect of success". The maximum is £10,000. Orders are still rarely made, although representatives threaten applicants for costs more frequently.
In May 2001 the Acas arbitration scheme was established. It is entirely voluntary and permits potential parties to an unfair dismissal claim to opt for a binding arbitration. The scheme was intended to provide a less formal route than a tribunal. But as only 13 cases were dealt with under the scheme from May 2001-15 March 2002, it may not help much.
The new Employment Bill allows the Secretary of State to make regulations to establish a fixed period for conciliation by Acas. This may entail a postponement of the listing of a hearing, or the hearing itself for certain periods. The regulations would set out the length of conciliation period. On its expiry, the conciliation officer can continue conciliation or refer the case back to the tribunal.
The Employment Bill empowers the Secretary of State to introduce further regulations for the redrafting of standard application and response forms. It makes it mandatory for both parties to provide further particulars and documents at the outset of the case to enable the tribunals to issue practice directions to increase efficiency and consistency and to make clear that weak cases can be struck out at the pre-hearing review stage.
Whether any or all of these initiatives will produce a reduction in the number, complexity and cost to employment tribunal applications remains to be seen.
Ellen Temperton is an employment partner at Baker & McKenzie