Unaffordable Justice

Issue section: 

Dave Renton writing as Judge Red

The Employment Reform and Regulatory Reform Bill, currently before parliament, contains a series of measures which are likely to make life harder for every worker.

Press coverage has focused on plans to reduce the maximum compensatory award that an employee can be awarded for unfair dismissal from £72,000 to around £26,000. Few claimants win the maximum award, but it is an important benchmark in high-value cases. These claims usually settle, because employers do not want evidence of bullying, etc, to be in the public domain. The proposals will do nothing other than reduce the financial liability of employers who behave unreasonably.

Another novelty is the government's plan to introduce "protected conversations", where a manager, on reaching a preliminary view that a worker could be dismissed, will invite the worker to a meeting where they would be told that, if they agree to resign, they would receive some modest compensation. The conversation is "protected" in that whatever the manager tells the worker, the worker will not be allowed to report later in tribunal proceedings, even if what the manager says in an unguarded moment gives a real insight into the true motive for dismissal.

To make matters worse, while the worker will be prevented from telling the tribunal what was said, the manager is not prevented from telling the tribunal. The government plans that this additional power will be used by companies to bully workers into settling potential claims, on the basis that if a worker was offered (say) £5,000 before dismissal, but won only slightly more, say £6,000, at the hearing, and bringing the case took up several days of court time and required the employer to spend £30,000 in its defence, the tribunal will find that the worker should have accepted the original offer, and make the worker pay the company's £30,000 costs.

The government is also planning to introduce compulsory "cooling-off" periods, similar to the provisions for strike ballots, where a worker who wishes to bring a claim first has to register the claim with Acas and wait for a certificate recording that the case has not settled, before being allowed to bring a claim. This will not merely delay justice, but lead to an increase in the number of hearings, as lawyers battle it out as to whether the claimant waited too long before going to Acas, or too long after going to Acas before submitting their main claim.

Not in the bill, but providing the context to it, is the government's plan to introduce from summer 2013 fees in the Tribunal ranging from £400 in unlawful deduction of wages cases, £1,200 in unfair dismissal and £1,600 in discrimination claims. Workers will pay the fees; employers will pay nothing. These fees represent roughly 25 percent of the average claimant's award for each type of claim. In theory they could be claimed back from the employer on winning the claim, save that tribunal awards are poorly enforced and only around 40 percent of employers pay tribunal awards in full and the government is taking no steps to improve enforcement rates.

Fees are also a threat to unions. Around two percent of employees are dismissed in any year. For a union like the RMT, that's 1,500 people. If each was to bring an unfair dismissal claim, with the union's backing, that would require the union to pay £1.8 million a year, just to get the same limited access to tribunals that workers have now. In practice not all dismissed workers bring claims, unions estimate that total subs would need to increase by more than 10 percent to cover the new fees. No union could cover the "hit" that fees will represent without to some extent cutting back on the number of cases they fund or cutting their organising capacity.

The introduction of fees is also unpopular with lawyers and judges, as it risks making the system look unbalanced. In the words of Daniel Barnett, a barrister and employment law blogger who makes his living almost exclusively by representing employers at the tribunal, "It makes justice unaffordable for workers on low incomes and gives unscrupulous employers comfort that their actions won't be challenged."

A serious high-profile union campaign against fees would have a real chance of success, but the details of fees have been in the public domain for four months already and there are far too few signs of a campaign starting any time soon.

Finally, while a successful strike may stop a dismissal, barely one in 500 successful unfair dismissal claims ends in an order reinstating a claimant. Even while we campaign against the coalition's attacks, there is an argument for socialists to win as to what are the most effective means of fighting for workplace justice.