Public Consultation on Disputes in the Workplace (September 2009)

Response by Thompsons McClure, Solicitors

Thompsons McClure is the Northern Ireland associate of Thompsons Solicitors and is the largest trade union law firm in Northern Ireland. At a UK level Thompsons is the UK’s most experienced firm of trade union, employment rights and personal injury lawyers. The firm has a network of offices, operating in England, Wales and Scotland and Northern Ireland. On employment and industrial relations issues it acts only for trade unions and their members. Thompsons represents the majority of UK trade unions and advises on the full range of employment rights issues through its specialist employment rights service.

Maintaining good employment relations/informal attempts to resolve disputes at work.

Q1. What impact do the statutory dispute resolution procedures have on the development of strong employment relations?

We totally support the basic aim underlying the disputes resolution procedures i.e. to seek to ensure that employment disputes are to the greatest extent possible resolved in the workplace without recourse to litigation.

We believe that a properly structured system which encourages and facilitates such an approach can only have a positive impact on strong employment relations. We further take the view that strong employment relations are best developed and fostered in a situation where employees are represented at a collective and individual level by trade unions which are formally recognised by employers. Through our close work with trade unions and their members and our exposure to employees in non-unionised workplaces we have no doubt of the vital role played by trade unions in resolving potential and actual disputes in the workplace at an early stage.

We broadly agree with the findings of the Gibbons Review (2007) in relation to Great Britain that while the intentions of the statutory dispute resolution procedures were sound, the system introduced was overly complex and inflexible. We take the view that similarly the equivalent dispute resolution procedures in Northern Ireland have not been particularly successful in achieving the basic aim of resolving disputes in the workplace and that, in any event, a fundamental review of the entire system for dispute resolution is required.

We believe that the focus of any such review should be to seek to ensure the development of systems and procedures which ensure that the vast majority of disputes are resolved in the workplace through the promotion of a system based on the development of a good industrial relations structures (including retaining the statutory obligation on all employers to have formal disciplinary and grievance procedures which comply with clearly defined minimum requirements) backed up by access to conciliation and arbitration services available at the earliest stage with appropriate sanctions against parties who unreasonably refuse to participate. Such a system should also include access to appropriate legal remedies, which take due account of the disparity in resources as between employees and employers and which are generally only accessed after other appropriate means of dispute resolution have been exhausted.

Q2. We are proposing an inter-agency approach to the provision of information and advice on employment law/workplace dispute. How might such an approach work most effectively?

While we agree that there are significant gaps and some duplication in the provision of public advice and information about employment rights, it is important to maintain a distinction between the provision of ‘neutral’ information by public bodies (Labour Relations Agency and DEL) and advice and assistance to parties to a dispute or potential dispute by independent organisations who may be more ‘partisan’ in their approach (trade union, advice agencies, law centres and employer organisations).

The role of the Labour Relations Agency (LRA) is absolutely critical in the general provision of information to employers and employees, particularly to small employers and, in the current absence of significant other provisions, to employees in non-unionised workplaces. 
However in relation to the matter of advice provision there is an issue about the potential role of the LRA. At its simplest there may be structural problems and/or a perception of a conflict of interests if the LRA is involved in providing advice to ‘both sides’ in a dispute. While it is possible that the structural problem might be resolved by clearly demarked and separate sections to deal with the provision of advice to employers and employees, this may not deal with the perception of a conflict of interests.

For these and other reasons, it is arguably more appropriate that advice to employees is provided through trade unions and independent advice agencies and advice to employers is provided through their representative bodies (EEF, FSB etc) supplemented if so required by local enterprise agencies. This is likely to require some consideration of public funding of such services especially in relation to the provision of advice to non–unionised employees.

Given that the most vulnerable group in terms of securing and enforcing their employment rights are non-unionised workers, very often in small workplaces and very often migrant workers, specific measures are required to address the particular needs of this group.

While independent advice agencies can provide a measure of support to such individuals, it is our view that the trade union movement is best placed to provide such a service given their day to day involvement in workplace issues.

Public funding should be made available to the trade union movement through ICTU to provide an advice (and representation) service to such employees. Such a service would contribute to good industrial relations by potentially bringing such employees into appropriate trade unions as members facilitating a more structured and effective channel for dispute resolution at the earliest stage in the relevant workplaces. (This would be particularly so if the current exemption from compulsory trade union recognition in businesses with less than 21 employees were removed as addressed below)

For the reasons set out above, it is difficult to see how the advice work of individual independent advice organisations and employers organisations could be merged into any one system other than to be fully informed of the material and services available through the LRA and otherwise and to do their utmost to avail of and promote these services.

Specifically in relation to information material, apart from the area of equality law, where the Equality Commission should retain its responsibilities for advice and information, consideration should be given to clearly giving the lead role to the LRA with DEL ceasing to publish leaflets, handbooks etc.

Q3 Do you agree that the public sector, as an employer, has a role to play in developing and promoting best practice?

Yes. The proposal in the consultation document about piloting dispute prevention/resolution strategies in the public sector should be pursued in association with the relevant trade union/s.

Q4 Would enhancing the capability of managers through training in dispute prevention/resolution techniques encourage the development of employee relations best practice? If so, what type of training should be developed?

We agree. One possibility which should be explored is that such training could be provided to managers (and trade union representatives) through the LRA.

Q5 How can small businesses be supported to establish and maintain an employment relations culture supportive of dispute prevention/informal resolution of workplace disputes? What role should Government/ the Labour Relations Agency / the Federation of Small Businesses and similar organisations play?

See 2 and 4 above.

Q6 Should some form of company accreditation associated with employment relations best practice be introduced? Should it be a new standard or should it form part of an established accreditation scheme? How could businesses be encouraged to become accredited?

We agree that it is important that managers and personnel who deal with workplace disputes and internal hearings should be required to have appropriate training and experience (in the same way as lay trade union officials who act as representatives where an employee asserts his/her ‘right to be accompanied at certain disciplinary and grievance hearings must be certified as having appropriate training and/or experience).

Q7 Is there a need for inspection/enforcement machinery to produce more legally compliant workplaces?

Yes. While it is obviously preferable that compliance is achieved on a voluntary basis aided and assisted by enhanced advice, information and support services for employers, it is a fact that a small minority of employers, primarily in non-unionised workplaces, systematically ignore legislative requirements. While provision of greater support services will assist in relation to those employers who do not comply with employment legislation through lack of knowledge, it will not deal with those employers who knowingly flout the law.

While it may be argued that the affected employees may assert their rights through bringing claims, it is the case that many of these employees, who are usually low paid, non–unionised and often migrant workers, are very vulnerable and are most unlikely to bring claims. It was for these very reasons that such a system was recently established in the Republic of Ireland through the National Employment Rights Authority.

Q8 What additional measures, statutory or non-statutory, would aid the promulgation of employment relations best practice?

As stated above, it is important in any reform of the current dispute resolution procedures to retain the statutory requirement that all employers must have formal disciplinary and grievance procedures which comply with clearly defined minimum requirements. There should also be introduced an appropriate sanction against employers who do not have such a procedure (e.g. a free-standing right for an employee to apply to a Tribunal for an award of 4 weeks pay for non-compliance).

Also, as in the new dispute resolution system in GB there will be a need for a revised authoritative LRA Code of Practice on Disciplinary and Grievance Procedures.

Given the vital role of trade unions in dispute prevention/resolution and in facilitating appropriate internal workplace structures to deal with disputes, there is no justification for the present position where compulsory union recognition cannot be achieved in firms with less than 21 employees.

The situation in this regard in Northern Ireland should be brought into line with best international practice where any such restrictions are either non-existent or much more limited (see Research on Industrial Tribunals and Fair Employment ICTU 2009 at paragraph 112).

Formal processes for resolving disputes at work

Q9 Of the three possible options with regard to the statutory dispute resolution procedures, which is your preferred option and why do you feel this option is the most appropriate?

1. Retain the procedures without modification.

2. Modify the procedures, retaining them in part but preserving a process mandated by statute.

3. Repeal the procedures in full and replace them with a voluntary compliance model.

We believe that the current procedures should be repealed in full for reasons set out below.

However, as an absolute minimum there should be in place a statutory process, in whatever form, designed to encourage and facilitate early resolution of workplace disputes without recourse to litigation incorporating the following elements:

• an overarching statutory basis for managing the process of linking pre-litigation steps to ultimate access to any legal remedy where required taking due cognisance of time limit issues;

• the specific requirement on all employers to have formal disciplinary and grievance procedures which comply with clearly defined minimum requirements (and with a sanction against employers who do not have such a procedure);

• provisions specifically designed to encourage the use of alternative dispute resolution channels rather than litigation without prejudice to an ultimate right to pursue a dispute by way of litigation;

• a comprehensive and authoritative LRA Code of Practice on Disciplinary and Grievance Procedures (specifically including the 3 step process – notification of charge; hearing; appeal - as a minimum requirement in disciplinary matters);

• due regard to the disparity of resources between employer and employee.

Should the statutory dispute resolution procedures be repealed?

The statutory dispute resolution procedures aim to encourage employers and employees to resolve problems in the workplace, avoiding as far as possible recourse to employment tribunals. That is a proper aim. In particular, the procedures have brought benefits to many employees:

• the procedures penalise those employers who do not have proper disciplinary and grievance procedures and encourage them to adopt minimal standards;

• paragraph 14 of Schedule 1 of the Employment (NI) Order 2003 deems the procedures’ meetings to be hearings for the purposes of the right to be accompanied conferred by the Employment Rights (NI) Order 1999. This widened the scope of employers’ obligation to allow their employees to be supported by a trade union representative

However, these benefits are outweighed by the many drawbacks which include the following:

• While the procedures appear to be straightforward, their application is inordinately complex. The procedures only apply to certain types of claim. It is highly unlikely that the unaided employee could be sure of the jurisdictions to which the procedures apply - in particular, if he/she wrongly thinks that the grievance procedure applies to a particular complaint he/she might mistakenly think that the time limit extension is available and so miss the deadline for the IT1.

• The fact that the procedures only apply to certain types of claims also leads to the not uncommon scenario where a Claimant had a number of claims, some of which are covered by the procedures and some of which are not, leading to problems about time limits and the need for several separate applications to the Tribunal.

• Departing from decades of workplace practice and expectations, the dismissal and disciplinary procedure affords employees only the merest hint in writing of what they are supposed to have done wrong (e.g. “absence”, “conduct”). The lack of a requirement for the employer to provide written information at Stage 2 puts the employee at risk of being ambushed at the Step 2 meeting.

• Articles 19 & 20 of the Employment (NI) Order 2003 lock employees out of the Tribunal if they have wrongly failed to trigger the grievance procedure. This exclusion is a draconian penalty for employees, inappropriate and disproportionate for legislation intended to encourage workplace resolution of employment disputes. An employer’s failure to follow the DDP only brings a penalty of automatically unfair dismissal in dismissal cases and even then the impact is greatly lessened by the possibility of reductions in compensation.

• The 3-month time limit extension where the GP applies is triggered when the employee complies with Step 1 and this works well. But the 3-month time limit where the DDP applies is only available if, on the day the normal time limit expires, the employee has reasonable grounds for believing that any dismissal or disciplinary procedure is ongoing – regulation 15(2). This encourages unscrupulous employers to string out appeal procedures in an attempt to catch the employee out. Thompsons McClure have encountered cases of employers issuing their decision on appeal just before the normal tribunal deadline. While an experienced representative will know that this places the employer in breach of paragraph 12 of Schedule 2 (unreasonable delay) and gives grounds for using the appropriate time limit escape clause, the unaided employee risks being excluded by failure to meet the tribunal deadline;

One result of these and other complexities and defects is that Tribunals regularly hold review or preliminary hearings on the application of the procedures. This increases costs and delays the determination of the dispute.

Some of the problems and injustices identified above (and others not listed) could be addressed by amendments to the legislation. In the event that the Government decides to retain the basic dispute resolution legislation, Thompsons McClure would welcome the opportunity to propose specific changes.

However, the complexities of the current law, the volume of case law generated in the EAT in Great Britain and the problems faced by claimants are so wide-ranging and their impact is such that we have concluded that the only option is to repeal the legislation.

Q10. Should any additional measures, statutory or otherwise, be introduced to improve formal systems for resolving workplace disputes?

See comments below.

Q11 Would there be any unintended consequences of the repeal of the statutory procedures (or part of them) that would need to be considered?

In the event of repeal, Tribunals will face a transitional period of increased complaints, for which resources should be made available.

Q12 If the procedures or parts of them are to be repealed, what should replace them and how would compliance be encouraged?

See comments below.

Alternative dispute resolution (ADR)

Q13. What are the strengths and weaknesses of current ADR services provided by the LRA?

The current ‘pre-claim conciliation’ services of the LRA whereby disputes are settled without claims being lodged to the Tribunal is a successful feature of the LRA’s operation which should be expanded and built upon.

This can be undertaken by means of the adoption of a radically different system such as that outlined at paragraph 7.46 of the consultation document (hereinafter referred to as the “pre-claim ADR system”) - which proposal we support as discussed below.

Such a service would thus be similar to the Rights Commissioner model which operates in the Republic of Ireland but more tailored to the current structures in Northern Ireland in terms of the LRA and the tribunal system.

However, at the very least the current pre-claim conciliation scheme should be expanded in line with the similar initiative launched by ACAS in GB in March 2009.

It is unclear why the take-up of the LRA’s current statutory arbitration scheme is so low although we would agree that the limits to the types of claim and the lack of an appeal are very likely the key factors. While we accept that it is in the interest of all parties, particularly in terms of costs and time, that such matters should not generally be the subject of an appeal, the absence of any form of appeal or a re-hearing at a Tribunal is a disincentive to the use of this scheme and would certainly be an important reason why lawyers who act for Claimants are very wary of suggesting this particular method of dispute resolution. As suggested in the consultation paper, the possibility of a limited right of appeal (or a rehearing before a Tribunal) should be considered as part of any overall reform.

Should the pre-claim ADR system be introduced then either party who was not satisfied with the outcome of the ADR would have the right to proceed to a Tribunal and where appropriate, if an EAT were to be established (as we propose), to appeal from the Tribunal on a point of law to an EAT.

Q14 How can the LRA improve its services?

Greater resources and promotion of its services with the emphasis of pre-claim intervention and the development of a pre-claim ADR system on the basis set out in the consultation document at paragraph 7.46 i.e. an application/referral to the LRA prior to any application to the Tribunal of a dispute that cannot be resolved using internal workplace procedures; the suspension of normal tribunal time limits to allow for potential resolution by way of ADR; appropriate ADR suggested by LRA with both parties having right to refuse to participate and proceed to Tribunal; and the ultimate right for either party to proceed to Tribunal with normal time limits (which we suggest should be extended to 6 months in all claims as set out below) restarting once the process ends without resolution or any decision is appealed.

Q15 Could the LRA be more involved in conciliation before a tribunal claim is lodged, and if so how?

As set out above.

Q16 Should the LRA be equipped to enable it to provide advice in addition to information?

No – see 2 above.

Q17 Is some form of early neutral evaluation desirable and, if so, how should the process work?

We are not in favour of this as a specific measure requiring public resources other than as part of an overall pre-claim ADR system as set out above. In most cases sufficient advice re the potential merits and value of a case should be available to potential Claimants through trade unions and independent advice agencies supplemented by the Equality Commission. The provision of such advice to employees could be considerably extended and improved if resources were provided to ICTU as proposed above to provide advice and assistance to non-unionised and vulnerable employees at the earliest stage. Similarly employers should have sufficient access to initial advice.

Q18 Should the statutory LRA arbitration scheme to expanded to cover a wider range of jurisdictions?

Yes as part of a wider pre-claim ADR system as proposed. If it is subject to appeal on a point of law as proposed above there is no good reason why it should not cover all (non-Industrial Court) jurisdictions except perhaps Equal Pay given the complexities of the law and procedures in this area.

Q19 Should there continue to be time limits on the LRA’s duty to resolve disputes post-claim?

If the proposed new pre-claim ADR system is introduced this would not arise. Otherwise the fixed conciliation periods have not been a success and should be removed. They have imposed artificial restraints on the work of LRA’s Conciliation Officers.

Additionally, when the fixed period is concluded and a CO3 is unavailable, respondents are increasingly demanding that compromise agreements are used. With clauses dealing with restrictive covenants, good behaviour, repayment clauses etc, the provisions of these go far beyond what is usual in CO3s and this has placed many Claimants at a distinct disadvantage simply because of the fixed conciliation period system.

Q20 Would it be beneficial to incorporate within the existing system a process comparable to Rights Commissioner hearings in the Republic of Ireland?

Yes. As referred to above the current much under-used pre-claim conciliation and statutory arbitration schemes operated by the LRA could be transformed into a pre-claim ADR system similar to the Rights Commissioner model with all the advantages of that system in terms of earlier, cheaper and less conflictual resolution of workplace disputes.

Q21 Could a simplified tribunal application be used which would enable the LRA to assist the parties to determine how each case should be taken forward?

There is a general need for a simplified tribunal application form notwithstanding the recent introduction of a new improved form by the Office of Industrial Tribunals. Given the complexities of the dispute resolution procedures the recent new form is inevitably complex. Should the dispute resolution procedures be repealed (as we propose) it will of necessity create the opportunity to design a new claim form tailored to whatever new simplified system is introduced.

In any such new system consideration would have to be given to an appropriate system to allow a Claimant (and an employer) where necessary to ‘flesh out’ their claim after the ADR process has been exhausted if the matter is to go to the Tribunal.

Q22 Would it be beneficial to allow for pauses in the limits imposed on tribunal claims while ADR processes are taken forward?

The time limits for any claim to the Tribunal should be standardised to 6 months (see 27 below) and the time limits should be suspended during the period of ADR in accordance with an overall aim of seeking to resolve disputes without resort to litigation.

Q23 Should a subsequent tribunal be empowered to take into account the parties’ actions with regard to ADR processes and penalise unreasonable behaviour?

If so, it is vital that the test for unreasonable behaviour should be set at a high level so as not to deter parties from using ADR procedures.

Legal remedy

Q24 Should legal aid be available in respect of tribunal hearings and, if so, in what circumstances?

We do not believe that there is any realistic prospect of any extension of legal aid to Tribunals and we do not support this at this time. However, we would suggest that any possible move in the future towards a ‘loser pays’ costs regime would of necessity have to be accompanied by some legal aid or other specific provision to ensure that access to justice was not denied to any Claimants on the basis of limited means.

Q25 Should the amount of the deposit be increased in deposit hearings, and if so, to what amount?

No. The threat of costs is a sufficient deterrent without imposing a requirement to pay a deposit on a Claimant who will often be unemployed and will rarely be a person of substantial means.

Q26 Should the tribunal’s powers to award costs be extended, and if so, in what circumstances?

This matter should be reviewed in the future particularly if any fundamentally different pre-claim ADR system is introduced. If, as envisaged, this results in most matters being resolved without recourse to formal legal proceedings at the Tribunal, it is possible that the Tribunal would be more focussed on those cases which do have significant legal issues. In this scenario, the Tribunal would be more akin to a ‘Labour Court’ and it is arguable that a costs regime should be introduced as in the civil courts where ‘costs follow the event’ and the losing party generally pays the costs of both parties.

However the absence of legal aid for Tribunals would require that any such costs system took due account of the reality that there would be Claimants without sufficient resources or union support to pursue their cases. Some system would be necessary to ensure that such Claimants were not effectively denied access to justice because of limited means or a fear of costs. This would require either some limited legal aid system or the adequate resourcing of some form of tribunal representation service based either in the trade union movement and/or an appropriate independent organisation such as Law Centre (NI).

Q27 What, if any, beneficial changes could be made to time limits which apply in relation to the tribunal process?

The three month time limit that applies to most tribunal jurisdictions is unjustifiably short and actually forces employees into lodging claims when they still hold out hope of resolving the problem with their employer. That in turn damages the prospects of informal settlement, precisely contrary to the thinking behind the dispute resolution procedures. Equally, the “not reasonably practicable” escape clause frequently operates unjustly.

The 3 month limit was originally part of the package for introducing the law on unfair dismissal, in the expectation that re-instatement or re-employment would be the normal remedy and so it was important to get cases up and running before the relationship had gone stone cold. Wholly without justification, it and not the 6 month redundancy payments time limit, was applied to all other new jurisdictions. Furthermore, the re-employment remedy has died on its feet, so that the original rationale for 3 months is wholly unsustainable. Finally, it makes little sense to have different time limits and different escape clauses in multi-headed claims.

Accordingly, time limits should be standardised for all claims to the Tribunal to a norm of 6 months (with the provision for the time limit to be suspended to enable structured ADR as outlined above) with a standard “just and equitable” escape clause.

Q28 Would it be desirable to provide a ‘fast-track’ service for more straightforward claims? If so, how should it operate?

Not necessary under proposed pre-claim ADR system.

In any event, many so-called straightforward claims are either part of multi-jurisdiction cases or turn out not to be straightforward at all.

Q29 Is there scope to strengthen the enforcement of tribunal awards?

We would support the proposal that unpaid awards are automatically registered with the courts.

Q30 What steps, if any, can be taken to make improvements in how multiple claims are handled?

No comment.

Q31 Should tribunals have the ability to make improvement recommendations? How would you envisage such a system working?

No comment.

Q32 Should tribunals be given statutory contempt powers?

No.

Q33 Should the powers of tribunals to restrict reporting be revised, and if so, in what way?

No comment.

Q34 Is there a need for a restructuring within the tribunal system in line with any of the following options?

1. Replacement of industrial tribunals and the Fair Employment Tribunal by a single Employment and Equality Tribunal.

2. Retention of industrial tribunals with a separate Equality Tribunal dealing with all equality cases.

3. Creation of a single Employment Tribunal but with an Equality Division focusing on equality cases.

4. Integration of all employment-related tribunals into a two-tier unified tribunal system.

We believe that there should be a single Employment Tribunal with an Equality Division and that it should be renamed as the Employment and Equality Tribunal.

There is no need for a separate FET. We are also aware that unnecessary and wasteful technical issues can arise in claims where there are multiple related claims by one Claimant as to whether or not all of the claims can in fact be consolidated into the FET.

We take the view that as discrimination/equality is a highly specialised area that there should be a suitably experienced panel of chairpersons and wing members who deal with discrimination and equality issues.

Appeal

Q35 Should the current appeal process be restructured?

Yes. The option of appeal by way of case stated is a non-starter for many Claimants. The level of costs associated with the Court of Appeal and the risk of paying the Employers costs if the case is lost is a massive deterrent to Claimants. While legal aid is available for such cases in the Court of Appeal, most Claimants would not meet the financial eligibility requirements. Even where the Claimant is supported by a trade union the risk of costs remains a very substantial deterrent as the financial resources of unions are limited. 

We are aware of a number of cases which were withdrawn by the Claimant when the employer appealed to the Court of Appeal or not pursued as appeals by the Claimant as he/she could not risk the costs if the case was lost in the Court of Appeal.

Additionally, given the seniority in the legal hierarchy of the Court of Appeal, it would seem apparent that it is not the appropriate legal forum for an appeal directly from a Tribunal. It is arguably clear from a number of decisions of the Court of Appeal in recent years in matters that have come up to it from the Tribunal that the Court takes a similar view.

Finally, in the House of Lords' decision in the case of SCA Packaging v Boyle [2009] UKHL 37, Lord Hope of Craighead raised various concerns and suggestions about the appeal process in paragraphs 12-17 of the judgement in that case. He felt that there was "an urgent need" for fresh consideration of the appeal process operated currently. Whilst there was no reference to the creation of an EAT, we would strongly endorse this view and believe that the best solution is to establish an EAT for Northern Ireland.

Q36 Would the introduction of an Employment Appeal Tribunal be an improvement upon the current structure?

Yes. The current system does not give Claimants proper access to an appropriate and affordable system of appeal.

Further an EAT would develop a body of local expertise and authoritative precedents on employment law and would be likely to result in a greater degree of scrutiny of the decisions of the Tribunal which should act to improve the overall quality and consistency of decisions.

In the absence of any wider ranging costs and legal aid regime each party to any EAT hearing should bear their own costs.