Below is the text of the speech made by Harold Walker, the then Minister of State at the Department of Employment, in the House of Commons on 26 June 1978.
I am very grateful for the kind and generous remarks of my hon. and learned Friend the Member for Leicester, West (Mr. Janner). His speech dealt again with a series of very important matters that he touched upon on the last occasion when the House debated the industrial tribunals. He has argued tonight as cogently and lucidly as he did on 21st November last year. I am glad that, in spite of the limited time available, I may be able to deal a little more fully with his case now than I could then.
First, my hon. and learned Friend expressed concern about the number of complaints of unfair dismissal—and not only the number but the proportion—of all applications to the tribunals that fail. Secondly, he advanced what he believes to be some of the reasons, which he believes may in some cases be beyond an employee’s control. Thirdly, he made some constructive suggestions for reform.
Between 1972 and 1976 the proportion of complaints upheld at hearings was about 37 per cent. In 1977 that figure fell to 31 per cent. It is much too early to say whether it is part of a trend over recent years for this figure to decline. Much more noticeable, perhaps, is the consistency in the figures since 1972. In any event, it is not a figure that I would set much store by, for reasons that I shall explain briefly.
It would be wrong to infer that a small drop of this kind in the proportion of complaints upheld necessarily means that employees are failing to obtain their rights under the law. There may be a number of explanations for such a change. It may be that there are changes from year to year in the strength of the applications made, and that the cases which get as far as a hearing are not evenly matched year on year.
In any case, we see that the picture is different if we look at what we might call the overall success rate. By that I mean the proportion of employees whose case was upheld at a tribunal hearing, plus employees whose case was settled at conciliation. That proportion was 39 per cent. in 1972, but since 1975 it has been more like 47 per cent. each year. Therefore, if we look at the system as a whole, we see that perhaps there has not been the tendency that my hon. and learned Friend suggests.
My hon. and learned Friend also made the point that applicants might not be fully informed about their rights and were often at a disadvantage in conducting their cases. We are doing our best to counter that problem. We publish a number of guides about the legislation, guides which explain what employees’ rights are, including a very full booklet about employees’ rights on dismissal. Indeed, I well remember criticisms from Opposition Members that my officials were too ready to inform people about their rights.
My hon. and learned Friend is right to say that many working people are apprehensive about appearing before any judicial body. That certainly applies to industrial tribunals, notwithstanding their informality. It is natural. But we seek to do everything we can to explain the procedures to applicants and respondents alike. There is a leaflet on the subject. Moreover, I believe that the chairmen try to be as helpful as possible, particularly to unrepresented applicants.
My hon. and learned Friend was concerned about applicants being at a disadvantage as compared with the employer regarding witnesses. This was a point he made in our previous debate—the question of witnesses’ reluctance to appear for the applicant. In fact, both parties may bring witnesses to the tribunal, and if there is any difficulty they can ask the tribunal for a witness order. The tribunal may grant such an order if it considers it justified. The reason for giving the tribunal that discretion is that it is important not to lengthen the proceedings with irrelevant detail. If parties could bring whatever witnesses they liked, the tribunal would soon be like law courts. In my view, that would be a retrograde step. I think that already many employers produce too many witnesses, some of whom can add nothing to what has already been said in the proceedings. In such cases, many chairmen discourage witnesses who can add nothing, and I am sure it is right that they should do so.
I share the view that perhaps tribunals are becoming legalistic. I do not want them to become as legalistic as the courts. Nor do the presidents of the tribunals. We want to keep them as informal as possible. To the extent that they are becoming more legalistic, as is often suggested, I believe that there is one outstanding reason, namely, that there is an increasing tendency for employers to engage lawyers to represent them. Not only does that put up the cost to the employer; it increases the legalism, and often prolongs cases. I do not go along with those who want more lawyers in tribunals. They may be necessary in a small number of difficult cases, but in the overwhelming majority of straightforward unfair dismissal cases employers could do themselves a good turn and dispense with legal representation. They would find the tribunals no less sympathetic to their case than they are at present.
Let me come now to some of the other criticisms we hear about tribunals. Some people think that the tribunals may be unduly favouring employers. Yet much of the criticism comes from the other side with complaint that they unduly favour applicants. The truth is, of course, that they are impartial.
Let us look at the facts. The tribunals consist of a legally qualified chairman and members nominated by both sides of industry. They are therefore well suited to their task and are evenly balanced. Virtually all of their judgments are unanimous, which hardly suggests bias towards either side. I suggest that the truth—and this, perhaps, is why they are criticised from both sides—is that they get things right and so, inevitably, one side or the other is disappointed.
My hon. and learned Friend rightly drew attention to those who seek to scare employers by quoting the possibility of an award of £13,400 being made against them. Let me confirm what my hon. and learned Friend has said. What most people fail to say is—that that can happen only in the most exceptional cases. To the best of my knowledge it has not yet happened. It can happen only to someone over the age of 61 who is earning more than £5,000 a year, who has been with his employer for more than 20 years, who gets the maximum basic and compensatory award, whose employer refuses to reinstate him following a tribunal decision and whose original dismissal was on race, sex or trade union grounds. I suggest that that is a most unlikely set of circumstances. Well over half the awards made—55 per cent. —are for less than £400 and nearly four-fifths are for less than £750.
Much has been made of increasing caseloads. It has been suggested that the number of unfair dismissal cases is increasing dramatically. In 1977 there was a slight increase of 5 per cent. Experience so far this year is that there is a slight decline of about 10 per cent. Those who were predicting 100,000 this year have been proved to be wildly wrong.
There are some, including Tory Members, who, as my hon. and learned Friend reminded us, attribute a high failure rate to the flimsiness of many of the claims. We are often given the impression by critics that people who have nothing to lose lodge a complaint of unfair dismissal just to try it on. That is certainly not the impression that I get from letters to my Department. I have had many comments from employees about the consequences of applying to an industrial tribunal. Applicants who are legally represented have to pay solicitors’ fees. More seriously, the publicity resulting from an industrial tribunal’s decision and from the evidence given during the hearing can adversely affect an employee’s ability to obtain other employment—even when he has won.
I have had comments in letters such as:
“So I failed to clear my name. I was now classified as a troublemaker—industrial misconduct. Where could I get employment with a character like that? No one would want to employ me.”
I think that comments such as that show that employees will not apply to tribunals lightly because they know that they risk their reputation.
Certainly the tribunals are less intimidating to the ordinary man than the rest of the judicial system. That is deliberately and intentionally so. They may not be perfect, but the tribunals were set up to provide a speedy, informal and inexpensive means of settling disputes. I am anxious however, to stop them becoming more like law courts, and I know that the presidents are also. They are constantly seeking improvements in organisation and procedures which will save everyone’s time and trouble, while giving both employers and employees a fair hearing.
My hon. and learned Friend asked about the improvements that I touched on and, indeed, promised in the course of our last debate. I am glad to be able to tell him that I am proposing to introduce some changes in the tribunal procedure regulations which I hope will be to the benefit of both applicants and respondents, and which will mean that more information is available, as my hon. and learned Friend asked, before the tribunal hearing. They can only be of help to all the parties, and should help to shorten hearings. I am aiming for those changes to be effective by about the end of August.
In conclusion, may I say that in all this criticism of the tribunals and the employment legislation it would appear that too many people lose sight of the advantages which flow from them. For the first time in this field, employees have legal rights in employment which prevent those employers who would otherwise do so from behaving unscrupulously and recklessly. The good employer, of course, has nothing to fear and need have no anxeties from this legislation. But, in turn, the increased security which employees now have reduces the antagonism between employee and employer, and helps to promote stable industrial relations.
My belief is that there can now be no going back on the new rights which employees have. Among other things, to do so would be to step out of line with the rest of Europe, and to shift the basis for the development of sound industrial relations which the legislation has created. I believe that the way forward is for employers and employees alike to familiarise themselves with the basic provisions of the new laws and to set about building sound procedures which are based on them.
Mr. Greville Janner
Before my hon. Friend sits down, will he give an indication of the nature of the changes in procedure that he has in mind? In view of the fall in the number of cases before industrial tribunals, can he give any hope of wrongful dismissal cases being transferred to the tribunals within the powers given to the Lord Chancellor in the Employment Protection Act 1975?
On the second point, my hon. and learned Friend will know even more sharply than I the distinction between wrongful dismissal and unfair dismissal, and the statutory provisions deal only with unfair dismissal. There is some provision within the Employment Protection Act to enable certain matters relating to contracts of employment to be dealt with in specified circumstances by the industrial tribunals. I do not think that it extends their jurisdiction to cover wrongful dismissal. We are looking very carefully at the possibility of implementing that remaining power within the Employment Protection Act to extend the jurisdiction of the tribunals to cover contracts of employment in the specified circumstances. But I rather doubt whether it will be to cover cases of wrongful dismissal.
The procedural changes will be those that I suggested, which will enable the parties to have, as my hon. and learned Friend wishes, rather more information before the proceedings of the tribunal commence than they have at present. If my hon. and learned Friend wishes, I shall be happy to send him details.