Select Committee on Northern Ireland Affairs Minutes of Evidence

Examination of Witnesses (Questions 60 - 79)



Mr Beggs

  60.  Good afternoon, Mrs Stewart, and welcome to our Committee. You mention, in your written evidence, that there are costs associated with the implementation of the legislation. Could you provide the Committee with more information on these costs?
  (Mrs Stewart)  I know that this was an issue that came up when Mr Ingram appeared before you, actually, and I was interested to see his answer. We have tried to do an exercise on this and found this to be very, very difficult, in terms of trying to put specific costs on it, because I noticed that actually he was not able to do that precisely either. Although I am aware that there has been a figure of half a million used, in terms of the additional requirements under the new legislation, but, to the best of my knowledge, I do not think that figure—certainly I am not aware of anybody having done any detailed work on costs, I suspect because it is so difficult to do. So I am afraid I cannot be more specific on that.

  61.  And are you saying you have not made any assessment then of the burden which is expected to arise from the new Fair Employment and Treatment Order?
  (Mrs Stewart)  No, we have not done that.

Chairman:  I should perhaps say, so that we do not give any impression that we are luring Mrs Stewart into an ambush, that Mr Ingram has not yet written to us, in the way that he said he would, arising out of the evidence he gave before.

Mr Beggs

  62.  Is your evidence then entirely based on self-reporting by companies replying to your questionnaires, or is there any more objective research available, as far as you know?
  (Mrs Stewart)  As far as we know, unless other organisations, of which I am unaware, have done something more recently, there is nothing. As I said, we did the two exercises, in 1993 and 1995; the 1995 one in advance of the employment equality review, which was just starting at that stage, and, as far as I am aware, no, I do not believe there has been anything else done, to the best of my knowledge there has not been anything else done since then.

  63.  On the question of costs and benefits of the legislation, how far do you consider that the benefits outweigh the costs?
  (Mrs Stewart)  That is quite difficult, because, although we have referred to the benefits of having objective and, if you like, standard recruitment selection procedures, it is obviously very hard to put a figure on that. I suppose the way you could turn it round is that, by an employer, hopefully, having such procedures, they will be making it less likely, not, of course, fully protecting themselves but making it less likely, that they will end up in a tribunal, or in a situation where they have to appear before the Fair Employment Tribunal, where, of course, the costs can be substantial. But, apart from that, it is very difficult to put a cost on, or put a figure on, the benefits of having good recruitment selection procedures, again.

  64.  Thank you. Finally, what evidence, if any, do you have that the Fair Employment Commission has supported frivolous cases being taken to the Fair Employment Tribunal?
  (Mrs Stewart)  We have no evidence that they have done that. I understand that there is a procedure, an in-house procedure, within the Commission, whereby they decide which cases they will support, and that goes through their internal procedures. And I suspect that, obviously, because their own funding is not unlimited, they have to make a decision on the basis of their own agenda, if I can put it that way, in terms of which cases they support. But we have no specific evidence of them supporting frivolous cases.

Mr Robinson

  65.  Good afternoon, Mrs Stewart. Could you tell us, first of all, just so that we can get a bit of a handle on this, in terms of the number of businesses that would be registered with the Fair Employment Commission, and we see their reports, which give us some analysis of the monitoring returns, what percentages of those businesses would be CBI businesses?
  (Mrs Stewart)  We have 300 companies in direct membership, but then, as I said, there are a substantial number of other companies who are members, if you like, at a remove, through the trade associations which I mentioned. I could not be more precise, in terms of that analysis, because that analysis has not been done. We could probably provide that, at a later date, if that was an issue that you were particularly interested in.

  66.  I would be interested to see it, Mrs Stewart, because I think it is a fairly small percentage, is it not?
  (Mrs Stewart)  As I said at the beginning, we did actually do an exercise, not in terms of the people registered with the Fair Employment Commission, that is true, but in response to a question which was raised with ourselves a number of years ago, in terms of our representative nature. We did do this analysis, and that is where the figure of the 80,000 employees in the private sector came from, which we would say is a fair proportion of those in private sector employment in Northern Ireland. Obviously, I know that the FEC registration applies to all those who employ more than ten, and I think that is in the region of about 6,000 different organisations.

  67.  The reason I ask, Mrs Stewart, is that I just cannot believe what you are telling me, because it is so out of kilter with anything that I hear from the business community in Northern Ireland. The business community in Northern Ireland that I speak to do not have anything good to say about the Fair Employment Commission, they indicate that it is costing them jobs. In fact, only two weeks ago I came over in the plane with a businessman who was so successful he was wanting to open up another plant, and was going to put it in the North of England, for two reasons, one was electricity costs and the other was fair employment. So, effectively, the business community is telling me that it is costing jobs in Northern Ireland, and you are telling me it is the greatest thing since sliced pan?
  (Mrs Stewart)  We have never, I think, made light of the fact that there are costs associated with the legislation, we have said that, quite clearly, and there are things, even in the new legislation, that we did not particularly want to see, in terms of the increase in monitoring, because we accept that, particularly for the smaller companies, there are costs involved. But I think, on the other hand, the legislation is there, and, realistically, employers have to work with it. And, from our membership, what we are actually hearing in more recent years is not, interestingly enough, so much about the problems associated with fair employment but more, in fact, the problems associated with the equal opportunities legislation, which, obviously, we do not want to get into here. But I think that seems to be in terms of our contact with members, and we make a specific effort to visit quite a large proportion of our members every year, on a one-to-one basis, when we ask about this issue, and we always do when we visit them, it tends to be the subject, in terms of employment law, that is coming up, rather than the fair employment side. That was the case, more so, I think, perhaps, in the early nineties, in the first few years of the legislation, but it seems not to be so much the case now. So we can only speak as we find, and that, I think, is the way we find the situation at the moment. Again, that could change, possibly, in the future.

  68.  In reading your submission, I notice, in paragraph 1.1, in singing the praises of this piece of legislation, you are showing how great a success it has been, that in eight years it has improved Catholic employment by 1 per cent, you think that is a remarkable achievement, and it cannot actually even be identified as being the legislation that has caused that increase?
  (Mrs Stewart)  In terms of you looking at the figures as they were since 1990 and the figures as they are in the last FEC Annual Report, I think actually the figures are slightly better now, because, unfortunately, the latest report was not available to us when we were putting this together. It seems like a small increase. I think the other side of the issue is the unemployment differential, but that is a completely different topic, and the figures there do look quite different. But we have been quite careful to differentiate between the ability of the legislation to impact on that unemployment differential, rather than those in employment, and we have actually made the point, in this submission, that there are other supply—side issues, if I can call them that, in terms of skills, and so on, which also impact on the proportions.

  69.  Can I ask you about your own personal position. Have you ever been hands-on, in terms of dealing with fair employment issues and the monitoring and returns, and so forth? How close do you get to that?
  (Mrs Stewart)  In terms of my current post, and in terms of the nature of how——

  70.  As the Chairman would say, there is no edge to this question, it is not a trick question in any way?
  (Mrs Stewart)  No, we do not; we are primarily a lobbying organisation, so we tend to work, if you like, at the macro level, we do not tend to get down into very specific situations, in terms of individual companies. Certainly for member companies, we will try our best to assist them; quite often, that consists of signposting them to others, just because of our resource situation. But, actually, in terms of my previous employment, I actually worked for the Fair Employment Agency, as it then was, for five years.

  71.  That is interesting. Would that have coloured your view, do you think, on your great welcome for the fair employment legislation; it would not have had any impact?
  (Mrs Stewart)  No; because when I came into CBI, it was actually at the beginning of 1992, so the arguments, if you like, about the legislation were over, and I think that the situation then was that, to be quite frank, I was actually surprised at the positive attitudes that I experienced among CBI members at that time, because, as I explained earlier, I think once the legislation came into place the feeling among employers was that this was now law, so basically they had to work with it.

  72.  I may have been tempted to ask you if you were in a position that I faced not so long ago, to win a case against the Fair Employment Commission, who took up the case of a particular person, it cost £40,000 to win the case, do you think that an employer, who probably needs whatever profits he can get out of his business, should be asked to carry that kind of burden for cases that the Fair Employment Commission take up, which you say you have no evidence that any of them might be frivolous?
  (Mrs Stewart)  This is an issue that we have addressed, not in this particular submission, but we have addressed in the past, and we have actually made the point, in terms of the situation, in terms of costs, and so on, we were very strongly against legal aid being extended to fair employment applicants, which, of course, did not happen, but it was mooted, I think, by SACHR. But, certainly, there is a penalty even for, if you like, the winners of the case, but, of course, there are a relatively small number of cases which actually go through to the tribunal stage. On the other hand, of course, there are costs associated before they actually reach the tribunal, and I think, again, in the past, we have urged that there be a better use of the existing powers of the tribunal to sift cases, because there are powers that the tribunal can use before a case actually gets to a hearing.

  73.  If I make an allegation against the Chairman, it ends up in court, if I cannot sustain that allegation in the courts not only do I lose but I would have to pay the Chairman's legal costs. Why should not the Fair Employment Commission be paying the costs to employers who are able to rebut the allegations that are made against them, when the Fair Employment Commission have taken up the case on behalf of the person who has made the allegation?
  (Mrs Stewart)  That is a point that we have referred to in the past, not in this particular submission, but the issue of costs is one where we have actually supported that view.

  74.  Just one last question, and it might actually be useful, the fact that you have been an employee of the Fair Employment Commission's predecessor. It is fair, is it not, to say that there are, effectively, two different roles for the Commission; one of them is the monitoring role, the other being taking actual cases against those it is alleged have discriminated? If we were to wipe out the monitoring role and increase significantly the penalties for those who do discriminate, do you think that there would be any difference in the outcome, though clearly it would reduce very considerably the cost to employers?
  (Mrs Stewart)  You are now looking at unlimited awards anyway, in discrimination cases, and I think fair employment awards always have been substantially bigger than, for example, equal opportunity awards, I think you can see that when you look back to the early nineties. So I think there always has been a premium, if you like, if I can put it that way, in terms of the awards made at the Fair Employment Tribunal. I think there are two issues here. There is the issue that an employer can monitor and have very good procedures, and so on; they may still find themselves susceptible to an individual complaint, and, of course, those with below ten employees, who are not actually having to monitor, can still find themselves being susceptible to a complaint anyway. So that really, I suppose, leaves it very much down to the individual whether an individual proceeds with a complaint. I suspect that the Government policy was that it was felt that that was not an adequate deterrent, if you like, in terms of what was required of employers. I would not be privy to that thinking, but I suspect that was the idea behind introducing the monitoring structure.

Chairman:  As Mr Robinson chose to make me an actor in his hypothetical case, I should perhaps put on record, for the general interest of the Committee, that I have only once been involved in a legal case of any sort; it was, in fact, an industrial relations tribunal. My counsel was the present Lord Chancellor, and his pupil, who was, in fact, the present Prime Minister. Mr Robinson:  Did you win?

Chairman:  It was around 20 years ago. I dare say, they would be more expensive today than they were on that occasion. But I am delighted to report that we won the case.

Mr Beggs:  Chairman, can I just put in a little supplementary at this stage?

Chairman:  Of course.

Mr Beggs

  75.  Mrs Stewart, is there any evidence, or have you any record of the number of out of court settlements that would be made to avoid the legal costs?
  (Mrs Stewart)  The FEC, in their Annual Report, actually give an analysis of this. I have not seen the latest Report. They do not actually give, unfortunately, the reasons why it is only raw figures, if I can put it that way, but, certainly, if my memory serves me right, the last figure I remember seeing was that it was something in the region of ten times as many cases settled as proceeded. But there is no analysis of why those cases are settled; it may be because the applicant withdraws, or whatever.

Mr Robinson:  Can I just add a supplementary to the supplementary, Mr Chairman, just to put on record that legal counsel's advice in the case that I referred to was that "We will win this case but we advise you to settle." We decided to fight the case as a deterrent to others, but that is the advice that legal counsel are giving in most cases, simply "Get it out of your hair, pay up front and get rid of the problem."

Mr Hesford

  76.  Mrs Stewart, you are very welcome, and you are, in particular, welcome because of your five years' experience in the then Agency. I certainly welcome that experience being put before this Committee. Two questions, if I may; one historical, the other looking to the future. The first is about delays in the Fair Employment Tribunal. Concerns have been expressed by some that there is a backlog of cases, resulting in unacceptable delays in the Fair Employment Tribunal. What hard evidence, if any, do you have to support this concern; do you consider that further resources should be provided to the Tribunal to reduce these delays?
  (Mrs Stewart)  The Tribunal office themselves would accept that. I am actually a member of a group called the Industrial Tribunals User Group, which meets about twice a year, and I actually sit on the Employers Panel for industrial tribunals, not fair employment tribunals, and I can say now, through that, that the backlog, or the time to hearing for ordinary, I suppose we should call them Employment Tribunal cases now, is getting to be about six months, and actually the fair employment delay is two years; that is an accepted fact, I do not think anybody would dispute that in Northern Ireland. We have suggested various things, we have suggested recruiting more full-time chairmen, there is a difficulty in terms of that; there is also a difficulty in terms of accommodation, to the extent that Longbridge House, which is the main centre for tribunals, in Belfast, is actually being partitioned, the rooms are actually being partitioned, to increase the number of rooms that they have, because, obviously, there is no point in having more time if there are no rooms to hear the tribunals in. And then the other issue is, I think, the listing system. From my personal experience, in employment tribunals, and, again, this is back to the earlier points, I think, it is quite common to be rung at four o'clock in the afternoon, before a tribunal, where you have set aside a day, or whatever, to be told that the tribunal has been settled, and therefore probably that is a lost day, in the sense that it is a lost day to the panel members, but it is also a lost day in terms of it is too late to get anything else on for that day. So there are problems, I think, in terms of those issues, which the tribunal people, if I can call them that, are very well aware of. And we actually, in 1995, the CBI, when there was a review of the industrial tribunal system, made all these points, and I think what came out of that was that we now have the employment dispute resolution legislation, which has been passed; now we are waiting to see what the practical effects of that will be. What I would also say is that, since 1995, we have had an increase in the jurisdiction of tribunals as well, and, of course, now we have race relations and we have disability cases as well; so the problem will probably get worse, unless it is tackled.

  77.  In terms of listing, on this side of the water, it is common to have what is called floating cases, or reserve cases, in any given tribunal; in any given tribunal there is one case listed with two others behind it, in case it collapses. Is that not the case?
  (Mrs Stewart)  It is; but, even allowing for that, the last case I was involved in there were three or four cases listed, when we arrived in the morning, I think, two of them had been settled, and there were two to go, so obviously, yes, that is built into the system. But even apart from that, it still seems to be just a practical problem, in terms of how you actually organise these things and how you overcome the problems, if you like, of these last-minute settlements.

  78.  In terms of ordinary Employment Tribunal cases, and Fair Employment Tribunal cases, what would your best guesstimate be as to the length of cases, how long do they normally take, these things?
  (Mrs Stewart)  We were recently asked to nominate, by the Department of Economic Development, four panel members for both the Employment and the Fair Employment Tribunal, and I think they, in their guidance literature, said that really anybody putting themselves forward for a Fair Employment Tribunal had to be in the situation that they would be able to deal with a case lasting perhaps four or five consecutive days. Anecdotally, a lot of them do last a lot longer, ten, 15 days.

  79.  When you say "they", there are two; which lasts longer?
  (Mrs Stewart)  The Fair Employment ones.

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