Employment Bill

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Rob Marris (Wolverhampton, South-West): Perhaps I can assist the hon. Gentleman. First, I declare an interest: I am a member of the Transport & General Workers Union, which, as I said on Second Reading, gave moneys to my constituency Labour party before the general election was called. The hon. Gentleman's remarks may have referred to me but I have no formal links with any law firm; I was paid up until 7 June, when I got my P45. I have many friends in Thompsons Solicitors, a leading legal aid trade union firm, where I worked for 13 years.

The civil and criminal courts can make a wasted costs order, so the proposal is not the thin end of a wedge.

Mr. Hammond: I am grateful to the hon. Gentleman. I hope that he will contribute to later debates exploring how the incidence of such an order is determined and how to hit the people whom we intend should be hit, and not anyone else.

Alan Johnson: The amendment is flawed, as the hon. Member for Runnymede and Weybridge said, and unnecessary. It forces tribunals to take account of the circumstances of the party when making a costs award against them, and of the representative, especially whether he is paid, when making a wasted costs order.

Case law has established in virtually all cases that tribunals take into account a party's means before making a costs order. I asked, as a matter of interest, for examples of tribunals that did not take the trouble to discover the resources of the person against whom they had made a cost order. In one case, an applicant brought a case against her husband but failed to appear before the tribunal, having travelled to India and claimed illness. The tribunal found that the case had been brought not to seek redress for an employment-related issue, but to use the tribunal as a weapon in her matrimonial difficulties. In her absence, the woman was found to have acted vexatiously; we guess—we are not absolutely sure—that the tribunal did not discover the resources, but simply issued a costs award because it was such an outrageous misuse of an employment tribunal.

The hon. Member for Weston-super-Mare raised a major issue, which I shall put in context: of 130,000 applications to employment tribunals last year, 247 had a costs award. Costs awards are not for cases that are wrong, but for the small category that are completely misconceived. The vast majority of people who go to employment tribunals believe that they have a case; whether they do is decided through the system. Only a tiny proportion—about 2 to 4 per cent.—of initial claims could be described as vexatious.

The hon. Member for Runnymede and Weybridge asked whose interests were being served; it seemed to him that it was trade union interests. As published in our response to ''Routes to Resolution'', which was almost unanimously approved of, the Trades Union Congress supported the measure, which it said would deal with unscrupulous time wasters; the Confederation of British Industry said that it recognised that extensive costly delays can sometimes be caused by unscrupulous representatives; the Employment Lawyers Association described it as desirable and workable, and one tribunal chairman, in a heartfelt letter, said that the

    ''power to make orders for wasted costs directly against representatives who charge for their services would have the almost universal support of the tribunal judiciary''.

In all the responses, the argument, ''Why not extend it to CAB and trade unions?'' was not used. That is because the people who deal with such cases, day in and day out, understand the important difference. My hon. Friends the Members for Warrington, North and for Wolverhampton, South-West (Rob Marris) show that we on the Labour Benches have considerable experience in these cases. In any of the 247 wasted costs awards in the past year that involved trade unions I would be surprised if the trade union representative did not say at an early stage, ''Do not pursue this case in an employment tribunal.''

The difference is that members pay a subscription to a trade union, as you and I do, Mr. Benton, and that is one of the services that they receive. Irrespective of having been told that there is no case to pursue, trade unionists sometimes say to their trade unions, ''I am a member of this union, I pay my subs, I want your assistance. You are there to be my advocate.'' That is different from what happens in organisations that have a financial incentive to take the cases on. Trade union representatives' earnings do not depend on the cases they pursue to employment tribunals; trade unions are very keen to weed out weak and vexatious cases because of the financial burden involved.

The hon. Member for Weston-super-Mare raised a most important point about employers' associations, which would be in the same position as trade unions, citizens advice bureaux and the not-for-profit sector if, as part of their members' subscriptions, those organisations represented small business people as respondents.

Brian Cotter: The Minister mentioned 247 cases. Does he know how many were employer or trade union led?

Alan Johnson: No, I do not, but a third of those costs awards were awarded not against the applicant but against the respondents, because their case was so poor: for example, they did not pay the national minimum wage or the right redundancy payments, or they had such an outrageous defence that the case did not stand up, or they failed to turn up to put their defence to the court. It is a misconception that the costs awards are always against the applicant to an employment tribunal. We have no details of how many cases involved employers' organisations.

Mr. Hammond: The Minister makes a clear case for it being unlikely that many, if any, trade union representatives would find themselves in jeopardy. That is my point: because they are experienced and have a back-up, they are professionals in this system. It is not good law to exclude a class of people from potential jeopardy if they misconduct themselves on the basis that evidence shows that they are not very likely to do so.

Alan Johnson: The organisations representing those involved did not advance the same argument as the hon. Gentleman. His argument is not valid because there is a huge disparity in the resources of paid representatives and those who do not charge for their services or who are non-profit making.

Mr. Prisk: It would be peculiar if a small business man or an individual employee who took on a legal representative directly was treated differently from someone who was represented by a lawyer appointed by an organisation to which he subscribed, even if it was the same lawyer. Does the Minister recognise that peculiarity?

Alan Johnson: I do not. We want to return to the original basis of an employment tribunal, to which Leggatt referred, which was not legalistic. As I said on Second Reading, that may be an impossible dream, because, without wishing to offend my lawyer colleagues, once the lawyers get a grip on something it is difficult to loosen it.

I do not accept the hon. Gentleman's point because if we are talking about small businesses as respondents, they would welcome the move because they do not want to end up with vexatious cases, which involve time and trouble. If we are considering them in the position of aggrieved party, or having costs awarded against them, and including legal fees, that is an absolutely fair basis because they may well have been persuaded by the paid representative to defend a case that was vexatious and had no chance of success. A different clause prevents the paid representative from clawing costs back from the small business person, so I think that we have dealt with the point fairly.

If we include unpaid representatives there will be real danger that volunteers will be discouraged from offering their services. Alternatively, the behaviour of a rogue individual could impact harshly on a resource-free advice centre. Only 19 per cent. of employment tribunal applicants are professionals, and 25 per cent. are unemployed. It would be wrong of the Government to harm their opportunity to be properly defended.

10.45 am

Mr. Lloyd: My hon. Friend has made the point that I was about to make. It is not common practice to have a paid advocate before the tribunal. What, however, would happen to, for example, the citizens advice bureau or law centre advocate whose services are provided entirely free to the client if they were told that they might end up having to foot the costs if things went awry?

Alan Johnson: My hon. Friend makes an important point. I guess that that would seriously diminish their opportunity to offer advice in the future. It would affect not just trade unions but other free centres of advice. It would be an unwarranted penalty, and I do not think that that would be fair.

Mr. Hammond: I should like to pick up on the intervention made by my hon. Friend the Member for Hertford and Stortford (Mr. Prisk). When the Minister talks about a representative being a paid representative, is he talking about a representative who is paid by the person whom he is representing or does he include a representative who is paid for being there, but not paid directly by the person whom he is representing? I am thinking particularly of a lawyer who is engaged by a trade body or professional association to represent an employer. In many respects, he will be in the same position as a lawyer engaged directly by the respondent. Does the Minister intend to include or exclude such a person as a paid representative?

Alan Johnson: We intend to exclude them on the same basis as trade union officers who might be paid by trade unions but are not paid a specific fee for representing a person in court. We are talking about people who have a financial incentive to pursue a case.

Brian Cotter: Will the Minister consider the point about contingency fees, for which being remunerated was relevant to the category into which people would fall?

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