Industrial tribunals. Employment law isn't working

The exclusion of industrial tribunals from Lord Woolf’s reforms will restrict access to justice, believes Margaret McCabe. Industrial tribunals are not included in the wide-ranging reforms of civil justice proposed by Lord Woolf. At the Women Lawyers conference last month Lord Woolf frankly admitted that industrial tribunals were never part of his brief.

This exclusion raises some important questions. As the vast majority of claims for sex and race discrimination are made in tribunal, is there to be a two-tier system when the Woolf proposals are implemented? And does modern employment law truly provide access to justice?

Industrial tribunals

Industrial tribunals were established in 1964 with limited jurisdiction by the Industrial Training Act 1964. Since then this jurisdiction has extended to the extent that now all individual disputes based on both statutory and some contractual claims – subject to a monetary upper limit – can be heard by these courts. Their first main power was in respect of redundancy awards; now they hear, inter alia, unfair dismissal disputes, redundancy disputes, sex and race discrimination claims, equal pay claims, transfer of undertakings and certain common law contractual claims.

When industrial tribunals were first introduced the industrial scene was based on informal means of dispute resolution and they were designed to be cheap, speedy and accessible bodies. Now the flexibility and discretion of the tribunal decision is restrained by complex legal provisions and legal precedent. To all intents and purposes, the tribunals now operate as courts. There is legal representation in an adversarial system with cross-examination, burdens and evidential standards of proof and a right of appeal on points of law.

In recent years, EU law has had a major impact on these tribunals in certain areas as a new legal order, superior to national law and applied directly in, for example, sex discrimination, equal pay and transfers of undertakings cases, makes its mark. As the law now stands it is very difficult for employees to bring race discrimination matters to court. This is a problem for all of us in the legal profession, not just those directly affected. Inconsistent access to justice is justice denied.

Legal aid

One of the major problems is that litigants cannot obtain legal aid for industrial tribunal hearings. As a large number of applicants are unemployed at the time of the tribunal, this is a major inequality, because costs are rarely awarded.

In his report, Lord Woolf identified certain defects in the present system of industrial tribunals, namely, that they are too expensive (costs often can exceed the value of the claim), too slow in bringing the case to a conclusion and unfair to under-resourced applicants who take on powerful, wealthy litigants. As employment law has become more complex and as research shows that those represented at hearings by lawyers are twice as likely to win, it is not surprising to learn that the number of cases with lawyers has greatly increased. Lord Woolf supports the growing numbers pressing for legal aid to be available for industrial tribunal hearings.

Those with money to fund litigation can and do take advantage of the length of time it takes to conclude many industrial tribunal matters. For example, the recent speech therapists case led by Pamela Enderby took around 11 years from start to finish. The employers in this case took advantage of the long delays which, combined with the lack of legal aid available, gave them a significant tactical advantage over the applicants. A simple, faster and more cost-effective resolution to this dispute was available to the employers in the form of a Job Evaluation Scheme.

Equally, it is not uncommon for first instance hearings to be delayed. In central London an unfair dismissal claim with a four-day time estimate may take 9 to10 months to complete, largely due to inefficient administration in listing cases and to accommodate the lay judges’ diaries. Delayed access to justice is justice denied.

Modern employment law

Lord Woolf writes in his report that our civil justice system urgently needs reform. Those who practise in industrial tribunals would welcome an extension of the proposed reforms to cover tribunals. If the access to justice principles were applied to tribunal procedure, these cases would in theory progress with a set timetable and be monitored by the court. There would be a fast-track fixed timetable of no more than 30 weeks and a special fast track for the lower value or less complicated claims and a complex multi-track case where the procedure will be as simple as possible with appropriate budget-priced costs.

Justice must not be simply efficient, it must also be seen to be scrupulously fair.

Arbitration as an alternative

Under our present system most applicants bypass the offer of Acas conciliation and opt for an IT hearing. Acas was created by the 1974-79 Labour government to improve industrial relations through more use of collective bargaining. With the demise of union power this service did not reach its potential. However, there have been discussions in recent years about taking industrial tribunals outside the present judicial hierarchy by extending the Acas arbitration system. This, it seems, is viewed by the powers-that-be as the alternative to industrial tribunals. Presently, an individual Acas arbitration costs the Exchequer less than an industrial tribunal. Perhaps this is why it was not part of Lord Woolf’s brief.

In July 1996, with a view to immediate legislation, the DTI published a consultative document, Resolving Employment Rights Disputes, which contained draft legislation for consultation including an outline of the Acas Scheme F for the arbitration of unfair dismissal claims (annexe B) together with a draft employment rights (disputes resolution) Bill. This followed the development of the arbitration proposal in the Employment Department’s earlier green paper on resolving employment rights disputes.

Included in the legislation is a draft outline of the Acas arbitration system as an alternative to tribunals. This will have a profound effect on the way unfair dismissal claims are dealt with bearing in mind:

unfair dismissal claims constitute the majority of all applications to industrial tribunals;

Acas arbitration presently works without lawyers;

Acas offers non-legalistic private hearings;

Acas arbitrators are non-lawyer arbitrators who will be called on to apply employment law;

at present there is no appeal from an Acas decision. But the standard provisions of the Arbitration Act 1996 are likely to be included, specifically, s68, which enable a legal challenge to arbitration awards.

Arguably, a more holistic approach should be adopted and arbitration more widely used to resolve disputes which are often crucial to the careers, income and self-esteem of those involved. However, discrimination is injustice and those affected by it should have access to a court which is part of the mainstream, well-managed, efficient judicial process.

Arbitration as part of that process can help to break down discrimination. Excluding industrial tribunals from Lord Woolf’s reforms creates a feeling among those who use and need those courts of being unimportant and overlooked in the justice process.

Margaret McCabe is an employment lawyer practising at 2 King’s Bench Walk and founder of the Woman Lawyer Conference and the Equal Opportunities Action Unit.