Joint Committee On Human Rights Twelfth Report


TWELFTH REPORT


The Joint Committee on Human Rights has agreed to the following Report:

EMPLOYMENT BILL

Introduction

1. The Employment Bill was introduced to the House of Commons in November 2001 (Bill 44). It carried a section 19 statement of compatibility by the Secretary of State for Trade and Industry, the Rt. Hon. Patricia Hewitt MP. In December 2001, we reported to each House that we did not find it necessary to draw the Bill to the attention of each House on human rights grounds.[1] Subsequently, our attention was drawn to a memorandum prepared by His Honour Judge John Prophet, President of the Employment Tribunals for England and Wales, which drew attention to a number of concerns about the impact of the Bill, particularly its potential effect in limiting people's access to Employment Tribunals and their opportunity to enforce rights under employment law. In the light of the memorandum, we re-examined two human rights issues which seemed to us to arise.

 2. First, in § 7 of his memorandum, Judge Prophet suggested that clause 33 of the Bill, as originally drafted, might violate ECHR Article 6(1) by allowing the executive to deny access to an employment tribunal to employees who have not complied with employers' statutory internal procedures. Secondly, in § 8 of his letter, Judge Prophet referred to clause 31 of the Bill, which requires the compulsory reduction or enhancement of compensatory awards where one party or the other if statutory internal dispute resolution procedures have not been followed, unless there are 'exceptional circumstances'. It seemed to us that this might possibly violate either or both of the right to a fair hearing under ECHR Article 6(1) and the right to the enjoyment of property under Article 1 of Protocol No. 1.

 3. Our Chairman therefore wrote to the Secretary of State for Trade and Industry asking a number of questions about her reasons for concluding that those parts of the Bill were compatible with the Convention rights mentioned above. We asked for a response by 31 January, in the hope that we would be able to report on the Bill before it left the House of Commons. In the event, it proved impossible for the Secretary of State to respond by that date. Her answer, dated 14th February 2002, arrived on 15th February.[2] By that time, the Bill had completed its Commons stages. On Report in the House of Commons, the Government had successfully moved an amendment to replace Schedule 2 to the Bill (which sets out the statutory dispute resolution procedures which employers and employees would normally be required by clause 31 to follow before resorting to an Employment Tribunal) with a new version of that Schedule. Another Government amendment, moved successfully on Report, had replaced the original version of clause 33 with a new provision, setting out, with rather more particularity than had been provided in the original version, the circumstances in which non-completion of the statutory procedures would bar an employee's access to a tribunal. As the Secretary of State observed in her letter, 'The intention of the New Clause is that there should be greater detail about what is proposed on the face of the Bill.'[3] We endorse this objective. As we have observed in relation to other Bills, including as much detail as possible on the face of a bill helps to maintain the principle of legal certainty which is an important safeguard for human rights against arbitrary or unjustified interference.

 4. We proceed to consider the two issues mentioned above. In addition, the Secretary of State, in her letter,[4] mentioned concerns which had been expressed, during the consultation process in the summer of 2001, about the human rights implications of clause 26. In what follows, we give our reasons for concluding that this clause, as well as clauses 31 and 33 of the Bill as amended on Report in the House of Commons, are capable of being implemented in ways which would be compatible with the Convention rights, and that the clauses do not need to be drawn to the attention of each House on human rights grounds.

The Purpose of the Provisions

5. The provisions, forming part of Part 3 of the Bill, are concerned with dispute resolution in respect of both grievance procedures and disciplinary procedures, but, like the Secretary of State, we do not find it necessary to deal separately with them. Clause 30 of the Bill would make it a requirement for both employers and employees to follow the statutory dispute resolution procedures, forming a term in every contract of employment. Clauses 31 and 33 are concerned with the effect of a failure to follow those procedures on an employee's right of access to an employment tribunal to pursue a complaint against the employer, and on the level of compensation which the tribunal would be able to award in respect of an employer's unlawful act if either the employer or the employee has failed to follow the statutory procedures before resorting to the tribunal.

 6. The Government regards these provisions, so far as they restrict access to a tribunal to enforce rights or restrict or increase sums payable as compensation for interference with rights, as pursuing two legitimate public interests. First, they encourage employers to put proper dispute resolution processes in place within the workplace. Secondly, they encourage employees and employers to use those processes to try to resolve problems internally before applying to a tribunal. The Secretary of State, in her letter, states:— According to a 1998 survey of applications, in 37% of claims no attempt had been made in the workplace to resolve the problem before the application. In 62% of cases, the parties did not meet to discuss it. Currently out of a workforce of 25 million people we estimate that there are nearly 6 million who have access to no procedures or to substandard procedures. It is apparent that a disproportionate number of claims to employment tribunals result from workplaces where proper dispute resolution procedures are not followed.[5] We accept the purposes of the provisions are legitimate public interest objectives, so far as that is relevant to the assessment of compatibility with human rights.

 7. We now consider, first, the compatibility with Convention rights of adjusting compensatory awards under clause 31 of the Bill for non-compliance with internal dispute resolution procedures, and, secondly, denying or restricting access to a tribunal under clause 33 where internal procedures have not been completed.

Clause 31 of the Bill: Adjustment of Awards

8. Clause 31(2) provides that, in proceedings to which the section applies, the tribunal would normally have to reduce any award to the employee by at least ten per cent if statutory procedures had not been completed, and the non-completion was wholly or mainly attributable to the employee's failure to comply with a requirement of the procedure or to exercise a right of appeal under it. In addition, the tribunal would have a discretion to make a further reduction 'if it considers it just and equitable to do so in all the circumstances to do so', but the total reduction must not in any case exceed 50 per cent.

 9. If the failure to complete the statutory procedures was wholly or mainly attributable to the employer's failure, clause 31(3) would require the tribunal to increase any award to the employee by ten per cent, with a discretion to increase it by up to 50 per cent if the tribunal considered it just and equitable to do so in all the circumstances.

 10. Both these provisions are subject to clause 31(4), under which neither the duty nor the discretion to reduce or increase any award would apply 'if there are exceptional circumstances which would make a reduction or increase...unjust or inequitable'. In that event, the tribunal would be allowed to reduce or increase the award by zero to ten per cent.

 11. Clause 31 and ECHR Article 6. ECHR Article 6(1) confers a right to a fair and public hearing, before an independent and impartial tribunal, in the determination of anyone's civil rights and obligations. This is an absolute right, which cannot be interfered with (although it is possible that particular aspects of a procedure contributing to a fair trial may be adjusted or interfered with as long as the overall fairness of the hearing is not undermined). The right to compensation for breach of contract or of statutory requirements is a civil right for this purpose. We raised with the Secretary of State the possibility that reducing or increasing an award of compensation, to which a person is entitled, as a penalty for failing to complete statutory procedures, might violate the right to a fair hearing if the compensation were required to be reduced or increased by at least 10 per cent and may be reduced by 50 per cent as a result of factors unconnected with the unlawful conduct which gave rise to the right to compensation.

 12. In her reply, the Secretary of State contested the suggestion 'that Article 6(1), in requiring a fair hearing, requires that the compensation awarded by the court is to be reduced or increased only as a result of factors connected with the matters which gave rise to the right to compensation.'[6] In the light of the absence of authority on the question either from Strasbourg or the United Kingdom, we regard the matter as arguable.[7] However, the Secretary of State has a further response to our concern, in the light of which we do find it unnecessary to give further consideration to the issue at this time.

 13. The Secretary of State in her letter argues that, even if Article 6(1) does impose requirements as to the way in which compensation is to be calculated, the obligations require— ... no more than that, taken as a whole, the determination is fair and reasonable, that any restrictions on compensation are imposed for a purpose which is in the public interest, that any restriction is proportionate and that it is in accordance with the law.[8] Without expressing any conclusion on this suggestion, we regard it as a view which can legitimately be held in the existing state of the case-law. We have already accepted that the provisions have a legitimate public interest aim.[9] The Secretary of State's letter continues— In the Department's view, the modesty of the 10% reduction or increase, the tribunal's discretion as to an increase of that reduction or increase to an amount not exceeding 50% and the tribunal's discretion under clause 31(4) to make no reduction or increase at all in exceptional circumstances, lead to the conclusion that the procedure is fair and reasonable and the restriction on compensation proportionate.[10] 14. This argument requires careful consideration. The tribunal's discretion under clause 31(4) would come into play only where there were 'exceptional circumstances' making an increase or reduction of ten per cent unjust or inequitable. On the face of it, restricting the discretion in this way would significantly limit a tribunal's ability to avoid unfairness. As the Judge Prophet pointed out in § 8 of his memorandum, it is not clear what circumstances would be regarded as exceptional. However, section 3 of the Human Rights Act 1998 would require clause 31(4) to be read and given effect, so far as possible, in a manner compatible with Convention rights. If there were a risk that giving a narrow meaning to 'exceptional circumstances' in a particular case would lead to a violation of a party's right to a fair hearing, the tribunal would probably have to interpret the words as including a wide range of circumstances which would make it unfair to restrict or increase the award of compensation. There is already an example, in the context of the law of sentencing, of 'exceptional circumstances' being given such an extended meaning by virtue of section 3 of the 1998 Act.[11] We think that it is safe to assume that a tribunal would treat clause 31(3) of the Bill in a similar way.

 15. We therefore conclude that the Secretary of State was entitled to conclude that clause 31, approached in that way, is unlikely to give rise to incompatibility with ECHR Article 6(1). We are fortified in this conclusion by the fact that, for reasons which we outline below, we do not consider that the restriction or increase of compensation would be likely to violate the right of the claimant or the respondent to the enjoyment of possessions under Article 1 of Protocol No. 1 to the ECHR. It seems to us unlikely that a substantive right to a given amount of money would be regarded as being more extensively protected under the procedural requirements of ECHR Article 6 than under the provision of the ECHR specifically directed to the protection of property rights.

 16. While we accept that the duty to read and give effect to clause 31 in accordance with the requirements of section 3 of the Human Rights Act 1998 would be likely to minimize the risk that a party would be denied a fair hearing, we think that, so far as possible, legislation should be drafted in such a way as to make clear the extent of their interference with rights and obligations. We have already welcomed the Secretary of State's commitment to this principle.[12] It is especially important when, as in the case of this clause, the provisions would restrict rights by way of a penalty without regard to the facts giving rise to the original entitlement to compensation. In our view, it would have been preferable had it been possible to draft clause 31(4) in a way which ensured that it would operate proportionately without the need to resort to external aids to interpretation in the form of the Human Rights Act 1998 and a judicial decision in an unconnected area of law. This might have been achieved, for example, by giving tribunals a single discretion in clause 31(4) to reduce or increase the amount of any enhancement or restriction of the award, allowing a tribunal to fix an amount of between zero and 50 per cent 'if it considers it just and equitable in all the circumstances to do so'. This would have reduced the complexity of clause 31, improved its transparency, and reduced the risk of tribunals behaving in ways which might be disproportionate. We draw this to the attention of each House.

17. Clause 31 and Article 1 of Protocol No. 1 to the ECHR. Article 1 guarantees the right to enjoyment of possessions. The rights to awards under the law for breach of contract, unfair dismissal, redundancy etc., are possessions for this purpose. Article 1 permits the State to deprive a person of possessions, as long as it is done 'in the public interest and subject to the conditions provided for by law and by the general principles of international law'. In particular, the State has the right 'to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.' The European Court of Human Rights has held that the Article demands the striking of a 'fair balance ... between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights.'[13] This is, in effect, a requirement of proportionality. We asked the Secretary of State what her reasons were for concluding that depriving a person of ten per cent of the value of an award to which he or she has a vested right, or increasing an employer's liabilities by a similar proportion, would always be proportionate to the aim which is sought to be achieved in pursuit of a legitimate public interest.

 18. The Secretary of State, in her letter, accepted the need for proportionality. She drew attention to the fact that the reduction or increase in an award would occur 'only if the employer or the employee had been held not to have complied with the procedural steps.' She referred again to the public interest in resolving disputes without recourse to litigation, and referred to the straightforward requirement to follow the statutory dispute resolution procedures proposed in the revised version of Schedule 2 to the Bill, the modesty of a ten per cent increase or reduction, and the possibility that no increase or reduction might be imposed where clause 31(4) applied. In the light of this, it was the Department's view that clause 31 met the test of proportionality.[14] 19. Bearing in mind the way in which clause 31(4) would be likely to be given effect by virtue of section 3 of the Human Rights Act 1998, to which we have already drawn attention,[15] we consider that the Secretary of State was entitled to take the view that the provisions of clause 31 would not be incompatible with the right to the enjoyment of possessions under Article 1 of Protocol No. 1 to the ECHR.

Clause 33 of the Bill: Power for the Secretary of State to make Regulations preventing Access to a Tribunal

20. Clause 33 as originally drafted would have empowered the Secretary of State to make regulations to make provision for the purpose of preventing a claim being made to an employment tribunal, or preventing an employment tribunal from hearing such a claim, unless the statutory internal dispute resolution procedure had been completed. The effect of such regulations would have been to prevent a tribunal from hearing a claim which is within its jurisdiction. The regulations would have had to be made by statutory instrument, and could not have been made unless the Secretary of State had consulted the Advisory, Conciliation and Arbitration Service and a draft had been laid before and approved by a resolution of each House of Parliament, ensuring a reasonable level of parliamentary control over the circumstances in which access to a tribunal could have been denied.[16] Nevertheless, the power as it appeared on the face of the Bill was extremely wide, although tribunals might have read it down if necessary in order to secure compatibility with Convention rights or other provisions of primary legislation.

 21. We were concerned about several matters in relation to this clause. First, as Judge Prophet had pointed out in § 7 of his memorandum, the decision to refuse to register a claim might have to be taken by the Secretary of the Tribunals, because the tribunals have no jurisdiction over a case until it has been registered by the Secretary to the tribunal. It would have been strongly arguable that the claim to compensation—which, as noted above, is a civil right for the purposes of ECHR Article 6(1)—would have been effectively determined by the secretariat when deciding whether or not to register a claim. As the secretariat is part of the Department of Trade and Industry, this could well have violated the claimant's right to a hearing before an independent tribunal as required by Article 6(1), since the secretariat in the Employment Tribunals Service, would not be sufficiently independent of the executive to meet Article 6(1) requirements. The High Court or Court of Session would have been able order the Secretary to register the claim, thus protecting all Convention rights, but relying on judicial review would arguably not have been an efficient way of protecting Convention rights. We therefore asked the Secretary of State what steps the Government intended to take, in implementing clause 33, to ensure that protection for Convention rights is secured as efficiently as possible, including any safeguards which it intended to include in regulations made under clause 33 for Convention rights in the event that the Government intended to include appropriate protections in the regulations.

 22. Before the Secretary of State replied, the Government had successfully moved an amendment at the Report stage in the House of Commons to replace the original clause 33 with a new clause. The new version of clause 33 is a significant improvement on the original version in terms of safeguarding human rights, because a number of important aspects of the regime for denying access to tribunals are now expressly included on the face of clause 33, instead of being left to be specified entirely in subordinate legislation at the Secretary of State's discretion. The following features are particularly relevant for present purposes— —  As well as delimiting the tribunal jurisdictions to which the power to make regulations barring access to a tribunal applies,[17] the new version of clause 33 limits the grounds on which an application would be barred. A claim would be excluded only if the claimant had failed to comply with two aspects of the statutory grievance procedure: the requirement to inform the employer of the grievance in writing, and the requirement to allow 28 days after informing the employer before making the claim, to allow an opportunity for the grievance to be resolved;[18] and —  The new version of clause 33 would provide that where the requirements were complied with only after a period of more than a month after the end of the original time limit for making a complaint, the complaint could not be presented to a tribunal.[19] However, clause 33(5) would allow the Secretary of State to make regulations directing that the tribunal should nevertheless hear such complaints in such circumstances as may be specified in the regulations, making it possible to use regulations to safeguard access to a fair hearing.

 23. As we have observed above, we welcome the greater transparency which the revised version of clause 33 offers. To respect the principle of legal certainty, we consider it to be highly desirable that legislative steps which may restrict human rights, such as the right of access to a fair hearing under ECHR Article 6, should be clearly delimited, and specified on the face of primary legislation, rather than being left to be specified in subordinate legislation made by the Secretary of State.

24. Nevertheless, we regret that the safeguards for fairness contemplated by the new clause 33(5) would be left to be provided in subordinate legislation. It makes it difficult for Parliament as a whole, and for this Committee in particular, to form a view about the compatibility of proposed legislation with Convention rights when important safeguards are not included on the face of the Bill. If it will be possible to draft regulations specifying with sufficient clarity the circumstances in which a tribunal would be able to entertain a claim notwithstanding the late completion of the statutory dispute resolution procedures, we do not see why similarly drafted provisions could not be included on the face of the Bill. This would both further enhance legal certainty, and facilitate the task of Parliament in satisfying itself, where necessary, as to the proportionality of the restriction of Convention rights.

 25. We draw these matters to the attention of each House.

 26. The new version of clause 33 does not explain (any more than the original version) who would take the decision to refuse to register a claim under clause 33(2), (3) or (4). Therefore a risk remains that the decision would be made by a member of the secretariat, denying the applicant a right to a hearing by an independent tribunal. We had drawn this to the attention of the Secretary of State in our fourth question to her. The Secretary of State, replying to the fourth question, recognized the importance of avoiding this. She emphasised that it is not the Government's intention that either the Secretary or the Employment Tribunal Service should determine the application for Article 6 purposes. One possibility which is under consideration by the Department is that the secretariat might examine an application for an indication that the statutory procedure had been followed. If there were to be no such indication, the secretariat would write to the applicant drawing attention to the need to follow the statutory procedures. An applicant who had neglected to follow the procedures through inadvertence could then do so. If the applicant were to assert that there were good reasons for not having followed the procedures, the regulations would provide for a procedure whereby the matter would be decided by the tribunal, rather than the secretariat.[20] 27. We consider that this would be an appropriate way of guaranteeing that civil rights would be determined by an independent tribunal, as required by Article 6(1).

 28. At a more general level, the Secretary of State recognized that the whole of clause 33 might restrict an applicant's access to a tribunal, and that such access is a requirement of Article 6(1). She drew attention to the fact that this aspect of the rights under Article 6(1) is not absolute. The right of access may be restricted as long as the restriction does not impair the very essence of the right. Subject to that, the state may regulate access to a tribunal 'according to the needs and resources of the community and of individuals'.[21] The Secretary of State referred to the public interest in preventing unnecessary litigation, and concluded that clause 33 would not impair the very access of the right of access to a tribunal. The new version of clause 33 expressly limits the grounds on which claims would be barred. In addition, the Government intends that employees who had failed to meet the requirements before making their initial application would be allowed to make a fresh application after having an fresh opportunity to do so. In certain circumstances, the tribunal would be permitted to dispense with the requirement to send a grievance letter to the employer, if it were to be impractical for an employee to comply.[22] 29. We find these points persuasive. We note that nothing in the Bill would preclude a second application if one had been rejected in reliance on clause 33 (subject to the need to comply with time limits, which could be extended by the Secretary of State by regulations which could be made under clause 32 of the Bill). We are also swayed by the limitations and safeguards for access to tribunals contained in the new version of clause 33 and the other planned regulations and practices to which the Secretary of State has drawn attention. We conclude that the Secretary of State is entitled to take the view that the interference with access to the tribunal which the new version of clause 33 might cause would not be likely to impair the very essence of the right of access to a tribunal, and would therefore be unlikely to give rise to a violation of Article 6(1) on this ground.

 30. The same considerations persuade us that the Secretary of State is entitled to conclude that any interference clause 33 might generate with the right to enjoy possessions, under Article 1 of Protocol No. 1 to the ECHR, would be likely to be justifiable on the grounds outlined in paragraph 17, above, in respect of clause 31.

Clause 26: Determination without a Hearing

31. Clause 26, to which we did not refer in our letter to the Secretary of State, would insert a new sub-section 7(3A) in the Employment Tribunals Act 1996, permitting employment tribunal procedure regulations to authorise the determination of proceedings without a hearing in such circumstances as the regulations may prescribe. The Secretary of State informed us that representations had been received, during the public consultation on the Government's proposals during the summer of 2001, about the possibility that clause 26 might violate the right to a fair hearing under ECHR Article 6(1). The Secretary of State assured us that the Department 'fully recognises' the Convention rights implications.[23]

32. In our view, it would have been preferable to have specified the circumstances in which a case could be determined without a hearing on the face of the Bill. As we have observed already in this Report, we consider that any provisions which are known to be likely to present a threat to a Convention right should be set out in primary legislation, which should specify the extent of any permitted interference with the right and, so far as possible, the safeguards which the Government intends to put in place to ensure that the right is adequately protected. This would help to maintain both the principle of legal certainty and the effectiveness of parliamentary scrutiny, both of which, we understand, are supported by the Government. We draw this to the attention of each House.

 33. Nevertheless, we recognize that any regulations made under clause 26 would have to ensure that determinations could not take place without a hearing in circumstances where that would violate the right to a fair hearing under Article 6(1). Regulations which purported to permit determinations in violation of Article 6(1) would be invalid to the extent of the incompatibility, by virtue of section 6 of the Human Rights Act 1998. That being so, we are confident both that the Department will act on its recognition of the human rights implications of the power to make regulations under the new sub-section 7(3A) of the 1996 Act, and that there is little danger of any regulations having the effect of violating the right to a fair hearing in the determination of civil rights and obligations under Article 6(1).

Conclusion

34. After careful further consideration, we conclude that our original decision not to draw the special attention of each House to the Employment Bill was the right one. Nonetheless, we are pleased to note that the wording of some of its more controversial provisions has been improved. We consider that the Employment Bill, in the form in which it is now being considered by the House of Lords, is capable of being implemented in a manner compatible with Convention rights. Apart from the matters mentioned in paragraphs 16, 24-25 and 32 above, which are of general significance but do not give rise to particular concern in relation to the Convention compatibility of this Bill, we are satisfied that the Government is entitled to take the view that the aspects of the Bill considered above are compatible with Convention rights.

PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT

MONDAY 25 FEBRUARY 2002

Members present:

Jean Corston MP, in the Chair


Lord Campbell of Alloway Vera Baird MP
Lord Lester of Herne Hill
Lord Parekh Baroness Perry of Southwark
Mr Norman Baker MP
Baroness Prashar

Baroness Whitaker


The Committee deliberated.

 * * * * * Draft Report [Employment Bill], proposed by the Chairman, brought up and read.

 Ordered, That the draft Report be read a second time, paragraph by paragraph.

 Paragraphs 1 to 34 read and agreed to.

 Resolved, That the Report be the Twelfth Report of the Committee to each House.

 Ordered, That certain papers be appended to the Report.

 Ordered, That the Chairman do make the Report to the House of Commons and that Baroness Prashar do make the Report to the House of Lords.

 * * * * *   [Adjourned till Monday 4 March at half-past Four o'clock.

APPENDICES TO THE REPORT

Memorandum from His Hon Judge John Prophet, President of the Employment Tribunals (England and Wales), sent to Lord Lester of Herne Hill and others

THE EMPLOYMENT TRIBUNALS AND THE EMPLOYMENT BILL 2002

  1.  The Employment Tribunal System Taskforce was recently set up by the Lord Chancellor and the Secretary of State for Trade and Industry to consider how the Employment Tribunal system can be made more efficient and cost effective for users. It is chaired by the distinguished employment lawyer Janet Gaymer and is due to report in the Spring of this year. The Lord Chief Justice, in another context, recently commented on "the current emphasis on efficiency and economy in the conduct of litigation in the interests of the parties and the public as a whole". To achieve these objectives requires the legislation on employment rights to be as uncomplicated as possible, and readily understandable to both employee and employer alike.

  2.  It is, therefore, particularly unfortunate that prior to this report being produced the Department of Trade and Industry is currently steamrollering through Parliament measures which will have just the opposite effect and impact severely on the ability of the Tribunals to provide justice for both employees and employers in respect of employment rights. These measures are to be found in clauses in Parts 2 and 3 of the Employment Bill 2002.

  3.  These clauses arise mainly from proposals by the DTI to improve dispute resolution in the workplace. The policy objective is "to encourage parties to avoid litigation by resolving differences through the proper use of internal procedures" (Employment Bill—Explanatory Notes p 19 paragraph 85). That is a laudable objective, fully supported by the Employment Tribunals. Indeed many employers now appreciate that internal conflict resolution procedures can dramatically cut costs and even be a creative force for the business (see Financial Times—Mastering People Management 26 November 2001). However implementation through the clauses in the Bill is a crude legal enforcement procedure which will have serious consequences for Employment Tribunals, and fetter judicial discretion in respect of doing justice in the individual case.

  4.  The principal reason for this is that the DTI is attempting to use the Tribunals to force employees and employers to follow legally binding internal procedures by the introduction of penalties which the Tribunals will be compelled to impose on both employees and employers.

  5.  This is quite contrary to the proper function of the Employment Tribunals, as an independent judicial body, entrusted as part of the civil justice system with the proper enforcement of employment rights as provided by Parliament, and if appropriate, the assessment of such compensation as is just and equitable for any breach of those rights.

  6.  The Employment Tribunals have no wish to be a pawn in the DTI's strategy of attempting to reduce the number of cases being presented to the Tribunals (whatever the motive for that may be) by placing barriers on rights of access for employees to the Tribunal, and imposing penalties on both sides where there has been some lapse in following internal procedures. The careful balance, which the Tribunals have successfully fostered over many years, between the interest of the employees and the employers will be upset if the Tribunal is seen as punishing either the employee or the employer.

  The principal offending Clauses are as follows:

  7.   Clause 33—which would authorise the executive to exclude access to the Tribunals altogether for an employee who has not complied with a statutory internal procedure requirement. To illustrate how fundamentally wrong this would be, consider the position of an employee who has been dismissed by his employer for redundancy and is entitled by law to a redundancy payment. The employer refuses to pay him. When Clause 33 is implemented by regulations, he will be debarred from accessing the Tribunal to have an enforceable judgment that he is so entitled, unless he shows that he has set out in writing to his former employer that he has a grievance on this matter, notwithstanding that there has been a blatant disregard of his legal entitlement. Not only is this degrading for the employee, it could well be a denial of his human rights under Article 6 of the Convention. Incidentally how does an internal grievance procedure apply to a person who is no longer an employee?

  Furthermore, who will decide if access to the Tribunals should be denied? It cannot be the Tribunal itself, because it has no powers unless the case is registered by the Secretary of the Tribunals. So that will be the responsibility of the executive ie the Employment Tribunals Service, which is part of the DTI. Thus the ETS will become subject to judicial review for anyone who considers his access to the Tribunals has been improperly denied.

  Also to be noted are the exceptional draconian powers which the Minister will gain to make regulations under this clause—regulations which have not yet even seen the light of day. It is not surprising that Members of Parliament are concerned about being asked to sign a blank cheque.

  Where the DTI gets the idea that employees rush to employment tribunals without attempting to resolve differences in the workplace is a complete mystery to all who are actually involved day to day in employment relations. It is usually the last thing that an employee wants to do. The alleged figure of 62 per cent quoted by the DTI in its Dispute Resolution document and by the Minister during Standing Committee debates cannot be correct because most applications to the Employment Tribunals come from persons who are no longer employees, and will have had no opportunity to use grievance procedures.

  The related mistake by the DTI is to assume that the Tribunals are not aware that there are in most businesses some means of resolving disputes internally through formal or informal grievance procedures. If those are in place, Tribunals always want to know why the employee did not use them in appropriate cases.

  8.   Clause 31 which compels Employment Tribunals unless there are exceptional circumstances (what are they?) to reduce compensatory awards to an employee by a percentage up to 50 per cent if statutory procedures set out in Schedule 2 of the Bill are not completed, and equally to enhance compensatory awards by up to 50 per cent if the failure rests with the employer. The DTI appears not to understand the difference between the proper assessment of compensation and penalties. Penalties are more akin to fines in the eyes of those subjected to them. There are potential burden of proof difficulties if either employees or employers are to be subjected to such penalties. Why in the previous example even if he does gain access to the Tribunal should the employee risk having to lose part of the redundancy payment to which he is fully entitled to under the law? Why should an employer have to pay an employee or a former employee up to 50 per cent in excess of his actual financial loss? This could be crippling for a small employer. Furthermore why should the Tribunal have to lengthen its proceedings to consider these matters?

  Again the draconian powers for the Minister in Clause 31(5) may be noted if only because of the further complications which are likely to be introduced by regulations.

  9.   Clause 32—introduces additional complications for employees, employers and the Tribunals on what are well established principles on time limits, only because of the additional legal requirements on statutory procedures. Result—more work for Employment Tribunals at interlocutory stages and more preliminary hearings.

  10.   Clause 25—To reinforce the barriers on access and the compulsory use of statutory procedures, the Minister will dictate the contents of the forms of application to the Tribunal, and the forms of defence. It appears to have been overlooked, even by the Standing Committee, that appropriate forms for judicial proceedings should be the responsibility of the judiciary as in the Courts, not that of the executive. The DTI is attempting to usurp a judicial function for the purpose of implementing its policies in the Bill of creating barriers to access to the Tribunals.

  It has long been a feature of Employment Tribunals that access should be relatively simple. The current application form as devised by the judiciary is simple to complete, even for unrepresented applicants or those with language difficulties. Further details from both sides can readily be obtained at a later date to clarify the issues under the Tribunal's case management procedures.

  It is certain that if the executive draw up the forms, they will be many pages long and resemble tax forms. Will failure to complete the form properly or at all be a further denial of access?

  11.   Clause 34—Ostensibly designed to reverse the decision by the House of Lords in the Polkey case in 1987, this is a potentially disastrous clause, which will undoubtedly produce considerable litigation in itself. It sends out the wrong message in that it suggests that disregarding internal procedures understood by employees, unions and employers is not important. Tribunals every day accept that minor procedural lapses by employers do not necessarily cause a dismissal to be unfair. However if the lapse is more serious eg not allowing the employee a proper hearing, it is sensible for the finding to be one of an unfair dismissal, with the justice of the particular case met through deciding the appropriate compensation. The main reason for this, however, as the House of Lords correctly recognised, is that a Tribunal cannot really speculate on what might have happened if there had been a proper hearing, so far as the fairness of the dismissal itself is concerned.

  But Clause 34 goes much further than attempting to reverse Polkey. It actually provides for automatic unfair dismissal if the statutory procedures are not completed, unless the employer can prove that he would have dismissed the employee if he had not lapsed in that respect.

  This is just the opposite of what the Tribunals should be called upon to do, which is to look principally at the merits of a case ie the reason for the dismissal and whether it was reasonable to dismiss for those reasons, not to put such focus on internal procedures. This measure will impact severely on small businesses who will find it difficult to prove to the Tribunal that they would have dismissed anyway. It has to be remembered that many such businesses will not understand what the Tribunal will adjudge to be proper completion of the statutory procedures. It cannot be a mere mechanistic approach but will have to be interpreted as incorporating proper investigations, fair hearings etc. This the Tribunals do already, but always balancing the situation to try to reach a just result having particular regard to the size of the business eg the garage in Hull. Now that will be swept aside, with the Tribunal forced into considering whether or not internal statutory procedures have been completed, and if not why not, and further forced into a straightjacket of having to find an automatic unfair dismissal when that is not based on a just assessment of the merits of the case. The only escape will involve an exercise in speculation which the Tribunal will be reluctant to enter into. Longer hearings are inevitable.

  12.   Clause 38—Quite irrespective of whether it makes the slightest difference to the real issues in the individual case, the Tribunal will have to examine at every hearing where any right is being considered whether the employer failed to give employment particulars to the employee, and adjust compensation by a formula so complicated that even the judiciary who have looked at the clause are uncertain what it means. Pity then the ordinary employee and the small business. Even longer hearings are inevitable.

  There are other clauses which have dubious advantages. For example the present situation, by which ACAS conciliation operates simultaneously with the progressing of cases through the Tribunal works quite satisfactorily. Settlement is encouraged by the prospect that the alternative is a Tribunal hearing. The proposal in Clause 24 to have a fixed period of conciliation before a Tribunal can fix a hearing date will simply delay the final resolution of many cases to the disadvantage of needy applicants. However these matters are more misguided than positively harmful to the work of the Employment Tribunals.

13.  EFFECTS

  The Employment Tribunals are already experiencing more and more issues to deal with in every individual application. If the above clauses are implemented into law, applicants will be encouraged to add some or all of the following into their applications when they would not have done so before:

    (i)  breach of contract (because the statutory procedures are contractual—Clause 30)

    (ii)  a claim to additional compensation because statutory procedures have not been completed by the employer (Clause 31)

    (iii) a claim to automatic unfair dismissal for failure by the employer to complete statutory procedures (Clause 34)

    (iv)  a claim to additional compensation because the employer failed to give to the employee a written statement of particulars as required by s 1 of the Employment Rights Act 1996 (Clause 38).

  The employer in his defence will have to deal with the above matters. He will also have to consider including his own submission that compensation should be decreased because of procedural lapses by the employee, and that any breach of internal statutory procedures should be disregarded by the Tribunal because the Tribunal should find (speculate?) that dismissal would have occurred anyway.

  It can readily be seen that virtually all Employment Tribunal proceedings will become ever more complicated for all involved leading to more interlocutory work, delays, and much longer hearings—a far cry from what is needed in these days of existing heavy Tribunal workloads.

14.  CONCLUSION

  It is tempting to ask why a Government with many other serious domestic issues to address should want to risk, through these ill thought out clauses, creating unnecessary disturbance in the delicate field of employment relations and the work of the Employment Tribunals—recently described by the Lord Chancellor as a "bulwark of the civil justice system".

  Why humiliate employees who are simply seeking to have their rights established? Why increase legal regulation on employers, particularly on small businesses when again it is unnecessary? Why give even more work to employment lawyers? Why get on a collision course with the judiciary by excessive interference with judicial discretion, when once again it is quite unnecessary?

  If anyone had troubled to consult the Employment Tribunals properly on the clauses which will deny admissibility to employees who had not taken their grievance through internal systems or impose penalties on both employees and employers, we could have explained that there is a simple alternative solution which would largely achieve the policy objective but without causing a major upheaval. We can readily stay proceedings which have been launched, at the request of the employer with a proper grievance procedure, pending completion of internal processes through that grievance procedure. We do it every day with internal disciplinary procedures, and hearings before Tribunals frequently become unnecessary as a consequence of the employee and employer resolving the difference through those procedures. This can be supported by revising the ACAS Code of Practice to including the "minimum" procedures, and giving further encouragement to employers to appreciate their benefits.

  What should happen now? The answer is for good sense to prevail and for the Government to recognise at a high level that the above Clauses in the Bill should be withdrawn for the time being to allow the Taskforce to complete its work, and then to enter into measured and sensible discussion with all the social partners and the stakeholders (to use the modern parlance) as to what, if any, legislative changes are needed in the future to improve dispute resolution and the Employment Tribunal System.

8 January 2002

Letter from Chairman of the Committee to the Department of Trade and Industry

EMPLOYMENT BILL

  After an initial examination of the Employment Bill, the Joint Committee on Human Rights reported to each House in December 2001 that it did not intend to draw any aspects of it to the attention of either House on human rights grounds (Ninth Report, Scrutiny of Legislation: Progress Report, HL Paper 60, HC 475, pp vi-vii, paragraph 9). Subsequently, the attention of the Committee was drawn to a memorandum from the President of the Employment Tribunals in England and Wales, His Honour Judge Prophet. It is critical of the Bill and has received extensive publicity. In the light of this, the Committee has revisited the Bill, and is considering whether it should report to each House on the possibility that two of the matters raised by the President may give rise to incompatibilities with human rights. To assist it in reaching its decision, the Committee would be grateful for your responses to the questions highlighted in this letter.

  The starting-point for our examination of the Bill is of course the statement you made on it under section 19(1)(a) of the Human Rights Act 1998; but I should make it clear that the Committee's remit extends to wider considerations of human rights, not just the Convention rights under the Act.

  Whilst the Committee does not, as a general rule, intend to express any view on the underlying policy issues, its consideration of the human rights questions raised by the Bill would be greatly assisted by an understanding of the issues you considered before making the section 19 statement and, more particularly, to conclude that any curtailment of those rights which the Bill may entail is justified by reference to the wider public policy considerations set out in the Convention, where these are relevant.

Clause 31 of the Bill: adjustment of awards

  Clause 31(2) provides that, in proceedings to which the section applies, an employment tribunal must normally reduce any award to the employee by at least 10 per cent if statutory procedures have not been completed and the non-completion was wholly or mainly attributable to the employee's failure to comply with a requirement of the procedure or to exercise a right of appeal under it. In addition, the tribunal has a discretion to make a further reduction if it considers it just and equitable in all the circumstances to do so, but the total reduction must not in any case exceed 50 per cent. If the failure to complete the statutory procedures was wholly or mainly attributable to the employer's failure, clause 31(3) provides that any award to the employee must be increased by 10 per cent, and may be increased by up to 50 per cent if the tribunal considers it just and equitable to do so.

  Both these provisions are subject to clause 31(4), providing that the duty and the discretion to reduce or increase any award are not to apply "if there are exceptional circumstances which would make a reduction or increase . . . unjust or inequitable", in which event the reduction or increase may be in the range zero to 10 per cent.

  ECHR Article 6(1) confers a right to a fair and public hearing, before an independent and impartial tribunal, in the determination of anyone's civil rights and obligations. The right to a fair hearing is an absolute right, which cannot be interfered with. The case-law of the European Court of Human Rights clearly establishes that a vested right to compensation for a legal wrong is a civil right for the purposes of Article 6(1). It is arguable that there cannot be a fair hearing in relation to a right to compensation if the amount of the compensation will have to be reduced or increased by at least 10 per cent and maybe reduced by 50 per cent as a result of factors unconnected with the matters which gave rise to the right to compensation. In the light of these considerations—

1.   What were your reasons for concluding that the provisions of clause 31, particularly in relation to the automatic reduction or increase of 10 per cent in the compensation awarded (subject to the establishment of exceptional circumstances under clause 31(4)), are compatible with the rights of parties to proceedings under ECHR Article 6(1)?

  The Committee also notes that certainty and accessibility of legal standards are important protections against arbitrary and unjustified interference with human rights. In the light of this, the Committee considers that the considerations likely to be taken into account by a tribunal in reaching decision on the exercise of the provisions of clause 31 should be clear. In this light—

2.   If your view that the provisions of clause 31 are compatible with Article 6(1) depends on the application by courts or tribunals of standards derived from other legislation or case-law, what were your reasons for not including those standards expressly in clause 31?

  ECHR Protocol No 1, Article 1 guarantees the right to enjoyment of property. The case-law of the European Court of Human Rights makes it clear that legal rights to compensatory awards for breach of contract, unfair dismissal, redundancy etc, are a form of property for this purpose, as is the money which an employer would have to use to satisfy an award. Under Article 1, a state is permitted to deprive a person of property, as long as it is done "in the public interest and subject to the conditions provided for by law and by the general principles of international law". In particular, a state has the right "to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties." The European Court of Human Rights has held that the requirements of the Article demand that there be a reasonable relationship of proportionality between the means sought to be employed and the aim sought to be achieved. In the light of these considerations—

3.   What were your reasons for concluding in relation to the provisions of clause 31 that depriving a person of 10 per cent of the value of an award to which he or she has a vested right, or increasing an employer's liabilities by a similar proportion, would always be proportionate to the aim which is sought to be achieved in pursuit of a legitimate public interest? It would be helpful if you could set out any relevant statistical or other information which was taken into account in fixing this proportion.

Clause 33 of the Bill: power to make regulations preventing access to a tribunal

  Clause 33 would empower the Secretary of State to make regulations to make provision for the purpose of preventing a claim being made to an employment tribunal, or preventing an employment tribunal from hearing such a claim, unless specified steps under a statutory dispute resolution procedure have been taken. The effect of such regulations would be to prevent a tribunal from hearing a claim which is within its jurisdiction. The decision to refuse to register a claim will have to be taken by the Secretary of the Tribunals, because the tribunals have no power unless the case has been registered by the Secretary. The President of the Tribunals has observed that the secretariat is part of the Department of Trade and Industry.

  Under ECHR Article 6(1), there is a right to a fair hearing before an independent and impartial tribunal in the determination of civil rights and obligations. It is arguable that the secretariat in the Employment Tribunals Service, as part of the DTI, is not sufficiently independent of the executive to be an independent tribunal for Article 6 purposes when deciding whether or not to register a claim. It seems at least possible that a refusal to register a claim may make unenforceable a right to compensation which would constitute a civil right under Article 6(1), subject to the possibility of a claimant seeking judicial review of a refusal to register his or her claim. The High Court or Court of Session would be able to order the Secretary to register the claim, thus protecting all Convention rights, but this would not be not an efficient way of protecting Convention rights. It may be that the Government intends that any regulations made by the Secretary of State would themselves include appropriate protections. In the light of these considerations—

4.   What steps, including any safeguards which might be included in regulations, does the Government intend to take in implementing clause 33 to ensure that protection for Convention rights, particularly those arising under Article 6(1) of, and Article 1 of Protocol No 1 to, the ECHR, is secured as efficiently as possible.

  Finally, it would be helpful if you could inform the Committee of any representations you have received in connection with this Bill in relation to human rights issues, and to what specific points those representations were directed.

  In view of the Bill's progress through the House, and the desirability of reporting before its second reading in the Lords, the Committee would be grateful for a reply to these questions by 31 January.

24 January 2002

Letter from the Secretary of State for Trade and Industry to the Chairman of the JCHR

EMPLOYMENT BILL

  Thank you for your letter of 24 January. I am sorry not to have been able to reply by your original deadline. The questions in your letter required a longer consideration and I am pleased to be able to reply to you in full now.

  You asked for an explanation of the considerations underlying the policies on admissibility of claims and adjustments to awards by employment tribunals. These are jointly the main enforcement mechanism for the use of the statutory dispute resolution procedures the Bill will require. The mischief addressed in clauses 31-33 is an over-ready resort to employment tribunals. According to a 1998 survey of applications, in 37 per cent of claims no attempt had been made in the workplace to resolve the problem before the application. In 62 per cent of cases, the parties did not meet to discuss it. Currently out of a workforce of 25 million people we estimate that there are nearly 6 million people who have access to no procedures or to substandard procedures. It is apparent that a disproportionate number of claims to employment tribunals result from workplaces where proper dispute resolution procedures are not followed.

  The importance of avoiding unnecessary litigation is increasingly recognised. See, for example, the remarks of Lord Woolf CJ in Cowl and Others v Plymouth City Council decided in December 2001, in the context of a judicial review case:

  ". . . the court might have to hold on its own initiative, an inter partes hearing at which parties could explain what steps they had taken to resolve the dispute without the involvement of the courts. In particular the parties should be asked why a complaints procedure or some other form of alternative dispute resolution had not been used or adopted to resolve or reduce the issues in dispute". [The quotation is taken from the report of the case www.lawreports.co.uk/civdecb0.7.htm

  Article 6(1) of the Convention provides that "in the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law." There is also a requirement for judgement to be pronounced publicly.

  The express rights given by Article 6(1) are: the right to a fair hearing, the right to a hearing within a reasonable time, the right to an independent and impartial tribunal established by law, the right to a public hearing (subject to certain qualifications) and the right to public pronouncement of judgement.

  In addition, the Strasbourg court has interpreted Article 6(1) as giving the following implied rights: the right of access to the courts, the right to be present at an adversarial hearing, the right to equality of arms, the right to fair presentation of the evidence, the right to cross-examine witnesses and the right to a reasoned judgement. In the view of the Department, the case law shows that the implied rights are subject to inherent limitations. A breach of any one of them does not always mean there has been a breach of Article 6(1). The fairness of the proceedings as a whole is to be considered and it is often necessary to carry out a balancing exercise between the interests of the individual and the interests of society as a whole.

  The Committee asked a number of specific questions which I will take in turn:

What were your reasons for concluding that the provisions of clause 31, particularly in relation to the automatic reduction or increase of 10 per cent in the compensation awarded (subject to the establishment of exceptional circumstances under clause 31(4)), are compatible with the rights of parties to proceedings under ECHR Article 6(1)?

  Part 3 of the Bill imposes new procedural requirements on employers and employees. It provides that, if a tribunal finds these are not complied with, the result may be an enhancement or reduction in the compensation that will be awarded to the employee if he is successful (clause 31) or a claim not being admitted (clause 33). The Committee should note that a new form of clause 33 (New Clause 6) was added to the Bill at Report Stage in the House of Commons, together with a replacement for Schedule 2 (New Schedule 1). Copies are attached. There are similar but separate procedures for grievances and disciplinary matters but, for convenience these are referred to below as the procedural steps. Separately, clause 30 implies a contractual term into employment contracts requiring both employee and employer to comply with the procedural steps. As indicated, clauses 31 and 33 provide for the statutory consequences that follow from a failure to follow the procedural steps. Those clauses do not impact on the fairness or timeliness of the hearing, the fact that it is being held or the decision given in public; nor do they impact on the independence or impartiality of the tribunal. They do alter the legal framework within which the tribunal sets its award of compensation.

  It is appropriate at this stage to consider precisely what is required by an employee in complying with the procedural steps. Schedule 2 provides a very simple procedure. The standard procedure is intended to be applied by regulations to cases where the employee is still in the employment of the employer. The modified procedure is intended to apply to the case where the employee is no longer in the employment of the employer. In the case of the standard grievance procedure, the employee must set out the grievance in writing and send a copy to the employer.

  The employer is required to invite the employee to at least one meeting to discuss the grievance and the employee must take all reasonable steps to attend the meeting. The employer must then inform the employee of this decision. The employee must inform the employer about any intentions in relation to appeal from the decision of the employer. The employee must take all reasonable steps to attend the appeal meeting. None of these requirements is inherently unreasonable in a case where the employee is still in an employment relationship with the employer. The regulation-making power is intended to be used to ensure that the employee is not required to take steps which would be unreasonable in the circumstances.

  Under the modified procedure, the employee need do one thing only which is to send a copy of his grievance in writing to the employer. The procedure can be followed at any time before the making of a claim to the tribunal and it is intended to use the powers in clause 32 to adjust the time limits for bringing claims consequentially. This is not an onerous requirement and it is highly desirable that it should take place to give the employer the opportunity of addressing the employee's concerns before the issue escalates to the point of litigation. Clause 31(5) enables the Secretary of State to make regulations and paragraph (d) in particular permits me to make provision about the circumstances in which a person is to be treated as not subject to, or as having complied with, the requirement to follow the statutory procedures. It is intended to use this regulation-making power to disapply the requirement in circumstances where it would be unreasonable for the employer even to write a letter or attend a meeting. This might arise where the behaviour of the person to whom the letter must be written or who would conduct the meeting would make it dangerous or seriously daunting for the employee to make further contact.

  The 10 per cent reduction or increase is regarded as modest, in circumstances where the party penalised will have failed to have taken the steps referred to above. It will be open to the tribunal, but not required of it, to increase or reduce this percentage where it regards it as just and equitable to do so. It should be borne in mind that only in an exceptional case can a party to a tribunal case be penalised through costs, as would be the case for conventional litigation in the courts. The reason why so substantial a discretion is left to the tribunal is because it will have the facts before it and will be able to assess the extent to which the failure to follow the statutory procedure would warrant further adjustment.

  Article 6(1) imposes no requirement as to the substantive remedy which is to be awarded by the independent and impartial tribunal which determines a person's rights. In its judgement in Z v UK on 10 May 2001 (Application no 29392/95) the European Court of Human Rights said at paragraph 87: ". . . it [Article 6(1)] does not itself guarantee any particular content for (civil) `rights and obligations' in the substantive law of the contracting states." While a claimant's right might be vested in the sense that he has the right protected by Article 6(1) to make a claim to compensation under the existing law, that does not in the view of the Department prevent a legislative change operating for the future which alters the way in which the compensation is calculated. The Committee has referred to absence of a link between the reduction or increase and the matters which gave rise to the compensation. It is not accepted that Article 6(1), in requiring a fair hearing, requires that the compensation awarded by the court is to be reduced or increased only as a result of factors connected with the matters which gave rise to the right to compensation. If Article 6(1) does indeed impose requirements as to the remedy to be given by the tribunal, in our view that obligation requires no more than that, taken as a whole, the determination is fair and reasonable, that any restrictions on compensation are imposed for a purpose which is in the public interest, that any restriction is proportionate and that it is in accordance with the law. The limitation in clause 31 is for the proper and reasonable purpose of reducing unnecessary or premature litigation which is in the public interest. In the Department's view, the modesty of the 10 per cent reduction or increase, the tribunal's discretion as to an increase of that reduction or increase to an amount not exceeding 50 per cent and the tribunal's discretion under clause 31(4) to make no reduction or increase at all in exceptional circumstances, lead to the conclusion that the procedure is fair and reasonable and the restriction on compensation proportionate.

  Let me turn to the Committee's second question, which is

If your view that the provisions of clause 31 are compatible with Article 6(1) depends on the application by the courts or tribunals of standards derived from other legislation or case law, what were your reasons for not including those standards expressly in clause 31?

  The reasons for the Department's view that the provisions of clause 31 are compatible with Article 6(1) do not depend on the application by courts or tribunals of standards derived from other legislation or case law.

  The Committee's third question is—

What were your reasons for concluding in relation to the provisions of clause 31 that depriving a person of 10 per cent of the value of an award to which he or she has a vested right, or increasing an employer's liabilities by a similar proportion, would always be proportionate to the aim which is sought to be achieved in pursuit of a legitimate public interest? It would be helpful if you could set out any relevant statistical or other information which was taken into account in fixing this proportion.

  To the extent that the right to a compensatory award is property for the purposes of Protocol 1 Article 1, the Department takes the view that that Article requires that reducing or increasing the award must be in the public interest and subject to conditions provided for by law and the general principles of international law. The Department accepts that there should be a reasonable degree of proportionality between the increase or reduction provided for in clause 31 and the aim sought to be achieved. The reduction or increase will take place only if the employer or employee has been held not to have complied with the procedural steps. As noted above, I see a clear public interest in resolving disputes without recourse to litigation. Again I would point out that only in exceptional cases can a party be penalised through the award of costs.

  Given the modesty of the 10 per cent reduction or increase as the default position, the discretion of the tribunal to increase the amount, the limiting of the reduction or increase to a maximum of 50 per cent and the ability of the tribunal to make a reduction or increase of less than 10 per cent (or nothing) where exceptional circumstances mean that a higher figure would be unjust or inequitable, as compared with the straightforward requirement on the employer and employee to follow the procedural steps the Department takes the view that the test of proportionality is met.

  The Committee's fourth question is

What steps, including any safeguards which might be included in regulations, does the Government intend to take in implementing clause 33 to ensure that protection for Convention rights, particularly those arising under Article 6(1) of and Article 1 of Protocol 1 to, the ECHR, is secured as efficiently as possible.

  The Committee's attention had already been drawn to the replacement of clause 33 and Schedule 3 [now clause 33 of and Schedule 4 to HL Bill 54]. The intention of the New Clause is that there should be greater detail about what is proposed on the face of the Bill.

  Your letter drew attention to one possible mechanism for the prevention of a claim being made to an Employment Tribunal. The Committee's concern was that power would lie in the hands of the Secretary of the Tribunals on the basis that tribunals have no power in relation to claims unless registered by the Secretary. The Committee expressed concern that the Secretary and the Employment Tribunal Service, as part of the DTI, are not sufficiently independent of the Executive to be an independent tribunal for Article 6 purposes.

  I would emphasise that it is not our intention that the Secretary or the Employment Tribunal Service should play the role under Article 6 of an independent and impartial tribunal. The detail of the ways in which the Service would assist tribunals in screening applications has yet to be determined. However, one option under consideration is that the Secretariat on receipt of a claim would consider whether it indicated that the statutory procedure had been followed. Where there is no indication, the Secretariat would write to the applicant drawing attention to the need to follow the statutory procedure. This would give the opportunity to a claimant who had not followed it through inadvertence to follow the procedure. Where the claimant asserts that the circumstances are such that he is not required to take a step under the statutory procedure or argues, contrary to the contention of the employer, that it has been taken, it is not anticipated that the Secretary should adjudicate that matter. It is intended that the tribunal should decide such issues, but the mechanism for this will be in regulations. In the majority of cases a letter from the Secretariat drawing attention to the requirement that followed the statutory procedure will bring about the following of that procedure. It must be remembered that the procedure will not cause the barring of the action through the operation of time limits, because the powers in clause 32 would be used to make suitable consequential adjustments to those limits.

  In relation to the issue of access to the tribunal and the operation of Article 6(1) I recognise that clause 33 presents a potential restriction to an applicant's access to an employment tribunal. The right to real and effective access to a court or tribunal is a fundamental aspect of Article 6, but it is not an absolute right. The European Court of Human Rights has held that access to justice may be restricted, provided the restriction is not such that "the very essence of the right is impaired". In the case of Ashingdane v UK (judgement of 28 May 1985, Series A no 93, pp 24-25 paragraph 57) the court said that the right of access to the courts is not absolute but may be subject to limitations: these are permitted by implication since the right of access—

    "by its very nature falls to regulation by the state, regulation which may vary in time and place according to the needs and resources of the community and of individuals".

  In considering whether the very essence of the right of access to a tribunal is impaired by the provision, it is necessary to consider what would need to happen for the access to be enabled. It is relevant here to note that at Report in the Commons, the original clause 33 was replaced by a more detailed clause which set out the criteria which will be applied by the tribunals in determining whether a claim should be admitted. These criteria are limited to matters to which the statutory grievance procedure will apply. In those circumstances, they require the claimant simply to inform his employer of his grievance in writing. In addition, a period of 28 days should pass between the sending of this written communication and the tribunal claim. This would provide time for the parties to resolve their differences before a tribunal application is made.

  It is the intention that where employees fail to meet these requirements in their initial application, they should be given an opportunity to make a fresh application which meets the admissibility criteria, as long as they make their initial inadmissible application within the normal three month time limit or send their written grievance to their employer within this period. In such cases, it would normally be necessary for the tribunal to extend the normal time limit by a further three months. Where applicants wish to submit a fresh application, they will normally be required to send their grievance letter before the second month of this extended period. This is to ensure that the employer is given a relatively early sight of the grievance before recollection of the circumstances which gave rise to the grievance fade. The tribunals will be given power to waive this requirement, however, if it is not practicable for the employee to send the grievance letter within the specified period. As a result, the Government believes that the new admissibility regime will not restrict access to tribunals. Applicants will be debarred only where they have failed to make an application (either admissible or inadmissible) within the normal period or where they have not sent the grievance letter within that period. This arrangement mirrors the existing restrictions on access to the tribunals, where applicants do not raise their complaint within the normal period.

  The Department considers that the aim of preventing unnecessary recourse to tribunals to determine issues which are capable of being settled within the workplace without recourse to the expense and formalities of tribunal proceedings is legitimate and in the public interest. What is required of the claimant in order to achieve access to the tribunal is reasonable. In the circumstances, it cannot be said that access to the tribunal is being denied or delayed. Rather, the Government is, in the words of the Ashingdane judgement, regulating the right of access in a way which does not impair the very essence of the right.

  As with Article 6(1), so with Article 1 of Protocol 1. To the extent that the right to an adjudication of compensation is protected by Article 1 Protocol 1, it will lie within the claimant's power to follow the straightforward procedure provided for in Schedule 2 to achieve the compensation judged appropriate by the tribunal. There is scope for the tribunal to adjust the reduction or increase to the facts of the case or in an exceptional case to provide for none. Any reduction or increase will be in accordance with the law. The purpose of the reduction or increase will be in the public interest. One of the principal purposes in providing for regulations to make provision about the operation of this provision is to have an opportunity to reflect on the structure needed to secure efficient compliance with Convention rights. The Bill provides for affirmative resolution procedure, which will give the opportunity for the Government to explain to Parliament how the regulations comply with the Convention.

  Finally, you asked me to inform the Committee about any representations concerning human rights issues which were made in respect of dispute resolution policies. The Department conducted a full public consultation last summer and some of the responses from legal organisations queried whether there might be HRA implications in the policies taken forward in clauses 31 and 33, but without developing these queries. There were also questions regarding clause 26 (determinations without a hearing), where the Department fully recognises the HRA issues which arise.

  I hope that this letter and the responses to your questions will help the Committee's consideration of the Bill. I am very willing to provide further information if this would be helpful. I apologise again for not meeting your deadline and trust there will be enough time before Lords second reading—provisionally scheduled for 26 February—for the Committee to complete its report.

14 February 2002



1  
Ninth Report of 2001-02, Scrutiny of Bills: Progress Report, HL Paper 60, HC 475, pp. vi-vii, para. 9 Back

2   The letter is reproduced as an appendix to this Report, p. Ev 5, below Back

3   Below, p. 7, para 8 Back

4   Below, p. Ev 5 Back

5   Below, p. Ev 5, para 2 Back

6   Below, p. Ev 7, para 1 Back

7   It may be relevant to note that rules limiting or increasing the amount of recoverable compensation in the law of the jurisdictions of the United Kingdom are normally concerned either-(a) with the extent to which it is proper to attribute the claimant's losses to the defendant's conduct (for example, questions of causation, remoteness of damage, and mitigation of damage), which would usually be unaffected by the way in which the parties have dealt with the dispute; or (b) with the conduct of the defendant (as in the case of an award of aggravated or exemplary damages), which may sometimes relate to the way in which the defendant has responded when the claim was advanced Back

8   Below, p. Ev 7, para 1 Back

9   Above, para. 6 Back

10   Below, p. 7, para 1 Back

11   R. v. Offen [2001] 1 WLR 253, CA (petition for leave to appeal dismissed, [2001] 1 WLR 514, HL) for an example of a wide meaning being given to the words 'exceptional circumstances' in order to meet the requirements of section 3 of the 1998 Act, in the context justifying not imposing an automatic life sentence under the Crime (Sentences) Act 1997, s. 2 Back

12   Above, para. 3 Back

13   Sporrong and Lönnroth v. Sweden (1982) 5 EHRR 35 at para. 69 of the judgment Back

14   Below, p. Ev 7, para 6 Back

15   Above, para. 14 Back

16   Clause 49(4) of the Bill Back

17   New version of clause 33(1) and Schedule 4 Back

18   New version of clause 33(2) and (3). Those statutory requirements are now contained paragraphs 6 and 9 of Schedule 2 to the Bill Back

19   New version of clause 33(4) Back

20   Below, p. Ev 8, para 1 Back

21   Ashingdane v. United Kingdom, Eur. Ct. HR, Series A, No. 93, Judgment of 28 May 1985 at para. 57 Back

22   Below, p. Ev 8, para 4 Back

23   Below, p. Ev 9, para 1 Back


 
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