Employment Bill

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Alan Johnson: The guidelines will—but let us return to the basis of the clause. It must be right for cost awards to take into account the time spent by people who are not usually legally represented. The minority of applicants and respondents are legally represented, even now. It must be fair that, when a case is vexatious and misconceived, someone who has spent time coming to court and preparing for the case should be compensated for that time. If we take that as a basic principle, I accept what my hon. Friend says about the need to ensure that we get it into perspective when we

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set up the regulations. We shall do that, and we shall consult widely, but his arguments should not override the basic justice of the argument for introducing an element for cost awards on the existing basis.

We intend compensation for preparation time to go beyond litigants acting in person; it may also apply to represented parties. We shall take great care in framing the regulations, and shall set out guidelines that will enable the tribunal to assess what would be reasonable compensation for preparation time. A worker may have to spend time gathering evidence, arranging witnesses and assembling his or her case. Tribunal allowances already cover loss of earnings for attendance at a tribunal, so it is inconsistent that there should be no possibility of compensation for preparing for the tribunal as well as attending it.

Concern has been expressed that the provision could lead to excessive claims. Tribunals have an overriding objective to deal justly with cases, in proportion to the complexity of the issues, and they will not be sympathetic to excessive claims. We are considering how to define the size of preparation time awards, perhaps against average costs per jurisdiction. We shall also consider a ceiling on compensation awards, as suggested by my hon. Friend the Member for Amber Valley. In any case, the regulations will provide that when a tribunal has made an award of both costs and preparation time, the total will not exceed the current limit for costs awards. We shall consult on the regulations, giving full consideration to suggestions about how they should be framed.

On amendment No. 8, I can give the categorical assurance that the hon. Member for Runnymede and Weybridge sought. It is unnecessary to substitute ''shall'' for ''may'', for the reasons with which I have bored the Committee senseless on a couple of occasions.

Amendment No. 17 is a probing amendment. Including the phrase, ''in specified circumstances'' is unnecessary. If the amendment seeks to provide that the procedure will take place in the circumstances already set out for cost awards, it does not need to do so, because that is clear in the Bill. If the hon. Gentleman is suggesting that the amendment goes further than that, we resist it because we have not at any stage proposed to extend the base for cost awards.

On that basis, I ask the hon. Member for Weston-super-Mare to withdraw the amendment and, if he does not do so, I ask the Committee to oppose it.

Mr. Hammond: I wanted to clarify the matter of Robbie Williams, because the Minister said that 90 per cent. of all applicants to tribunals were professionals, and I thought that that was a strange figure.

Alan Johnson: No, I said 19 per cent.

Mr. Hammond: Ah, now it is clear. I thought that the explanation could be found in the Minister's wide definition of professionals to include performing artists, but it is now clear.

The Minister and I had an exchange, following which I am clear that only vexatious or unreasonable cases will be capable of having either costs or

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preparation time compensation awards made against them, so I understand what the Minister has in mind. If that assurance is to be taken at face value—I appreciate that the Minister is walking on something of a tightrope—and we are talking about only 2 per cent. of cases, we will not have achieved very much, because the mischief of employers being tempted to buy off applications with cash because of the unlikelihood of recovering their costs will not be addressed. In a case where the applicant does not have a reasonable chance of winning, the employer, if he succeeds, will probably recover his costs in defending himself, but the employer might be tempted to offer £500 or £1,000 to avoid going to the tribunal. That will have precisely the effect that the Minister does not want of encouraging cases that are not well founded.

I wonder whether the situation that I am painting and that the Minister has encouraged the Committee to think will occur is as bad as I have suggested. Later in the Committee's proceedings, we shall consider the provisions for conciliation that are to be introduced in the pre-tribunal procedure. Will the Minister tell the Committee how a tribunal will regard a case which the conciliation officer has made clear has no chance of succeeding? The Minister has talked about vexatious and unreasonable applications. I put it to him that, once the new procedure for conciliation has been introduced, a case in which the conciliation officer has told the applicant, ''There is no reasonable chance of you winning this case, you do not have a good claim,'' should be eligible for awards of costs and compensation for preparation time.

Will the Minister tell the Committee whether, in his regulations, the definition of cases where costs and compensation for preparation time can be awarded will be broad enough to include those cases where the conciliation officer has effectively rejected the applicant's claim?

Alan Johnson: I shall not be drawn on the hon. Gentleman's coming amendment. When we discuss the issue of conciliation, I shall explain why I believe that it would be absolutely wrong and against everything that we seek to achieve to have the conciliation part of the process somehow reporting to the system, for example by saying that a person is acting vexatiously. The conciliation process is about trust, the independence of ACAS and confidentiality, all of which would be breached if we were to go down the route suggested by the hon. Gentleman.

The hon. Gentleman makes an interesting point. He suggests that costs should be awarded to put an employer in a stronger position so that he would not have to settle to avoid a case going to the tribunal. I was in that position when I employed 250 people. People sometimes want to take a trade union to an employment tribunal and we had a minority of such cases. The route that the hon. Gentleman suggests would lead to the loser paying the winner's costs. The CBI, the TUC and everyone involved believes that, if we take that route, we might as well give up and hand over to the ambulance chasers, because we will have

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no-win, no-fee legal representation coming out of our ears. As in Germany, people would have to take out insurance to cope with the situation. That is the direction towards which he is pushing us.

Mr. Hammond: No, I have been careful not to go down that route. I have asked the Minister--I gave him the opportunity to respond by tabling amendment No. 17, which referred to ''specified circumstances''--whether he plans to define the circumstances in which an award of costs can be made as only where applications are vexatious or unreasonable on the face of it. Will he really make no reference to whether the earlier conciliation process has determined that the case has a chance of success? If an applicant has gone into conciliation and has been told by a qualified conciliation officer that his case has no prospect of success, it would be prima facie vexatious and unreasonable to continue with it. That was my question to the Minister, which he ducked by saying that he thought that such a procedure might cause problems with confidentiality. I am happy to postpone this debate until we consider another amendment that addresses the same question, but whether we are talking about costs being awarded in 2, 10 or 20 per cent. of cases is critical to understanding whether the power to award costs under new section 13A will provide any relief against a current mischief.

Alan Johnson: Let us postpone that debate until this afternoon when we discuss the other relevant amendment.

It is not only conciliation that weeds out vexatious cases, and we are not changing the basis of the application for wasted costs, which applies to between 2 and 4 per cent. of cases. The Bill will implement grievance and disciplinary procedures in every workplace and will beef up conciliation. The hon. Gentleman is wrong to say that we are not addressing the problems of the employment tribunals service because we have not increased the percentage of cases that could be affected. To do what he suggests would seriously jeopardise employment tribunals as places where people believe that they can seek justice, and would deter people who have a genuine case from pursuing it.

Brian Cotter: I feel strengthened in my resolve by having the support of two such knowledgeable Members, my hon. Friend the Member for North Norfolk and the hon. Member for Wolverhampton, South-West, who clearly know what they are talking about.

We have had a good debate. We had no objection to the wording, but we needed to debate several points. The hon. Member for Amber Valley made a valuable point about intimidation, and it is important that that is on the record. The hon. Member for Wolverhampton, South-West made some clear points, with which we agree, about tightening the guidelines, about capping and perhaps introducing tariffs. As the Minister rightly said, the debate is especially important because there are not many cases to draw on. It is important to air the issues and to put them on record in order to get the legislation right. It is also

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important that the employment tribunal rules of procedure are improved, and I am sure that they will be.

I am happy with the Minister's responses. The amendment was a probing one and I am happy to withdraw it, so new section 13A will remain in the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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