Examination of Witnesses (Questions 41-59)
CBI AND EEF
24 JANUARY 2006
Q41 Chairman: Good morning. We have got
a replacement because I understand one of your colleagues is unable
to be here, so it is all the more important to ask you to introduce
yourselves for the record.
Mr Thompson: Thank you, Chairman.
My name is Anthony Thompson and I am Head of Employment, Pensions
and Skills at the CBI. I have to apologise for Katja Hall whose
little girl was taken ill yesterday. Katja called me yesterday
afternoon to see if I could cover this alongside Richard and David.
I have to admit Acas is not an area of expertise on my part, although
it is Richard's. I should, along with Richard and David, be able
to give you a broad overview of the CBI's position in this area.
Mr Wainer: Richard Wainer, Senior
Policy Adviser in the employer/employee relations region.
Mr Yeandle: David Yeandle, Deputy
Director of Employment Policy at EEF, responsible for providing
advice and guidance to members on a wide range of employment and
pensions issues. I have a lot of experience of the organisation
in terms of practical involvement with Acas both at national and
regional level in a whole range of different fields.
Q42 Chairman: Thank you. It was difficult
to find any space for a cigarette paper between your evidence
and that of the TUC or other unions. Why is Acas so highly regarded
by you?
Mr Thompson: It is not very often
that we are in violent agreement with the TUC on a whole range
of policy areas but I think in this area in particular, give or
take a few specific issues raised in your last session around
collective bargaining, in terms of the general role of Acas, its
effectiveness, its appreciation and value and recognition within
the employer and employee community, we would agree wholeheartedly
with the positive assessment given by the TUC, both in their written
evidence and their oral evidence. One of the main reasons is that
one of our fundamental principles for the success of Acas has
always been that it should achieve and maintain an impartial role
in the whole area of dispute resolution, and I think it has and
continues to achieve that impartiality. I think that assessment
is shared from the CBI, within the EEF and the TUC.
Mr Yeandle: When we go out and
talk to our members, and particularly our regional associations
who are very actively involved with a whole range of Acas officials
on the ground, the message that comes back loud and clear time
and time again is the very high regard in which Acas is seen on
the ground, and that it has a well deserved reputation for impartiality,
which is absolutely fundamental to the successful undertaking
of all its roles. I think that is a fundamental point that has
built up over 30 years and we lose it at our peril, frankly.
Q43 Chairman: So it should have nothing
to fear from the 2007 Comprehensive Spending Review when it has
to be justified again from first principles?
Mr Thompson: There are a few things
in the reviews that are taking place at the moment where we have
to have a bit of concern. You have been talking this morning already
around funding cuts and some proposals for efficiency savings
within the remit of Acas and its future role. I think we would
share some of the concerns that the TUC has raised.
Q44 Chairman: An objective spending
review would pose no threat to Acas?
Mr Thompson: It should not, indeed.
Q45 Mr Hoyle: Obviously what can
one say, everybody is singing from the same hymn sheet today.
Acas gives specialist advice, it gives advice out; how does that
compete with, say, the RDAs, the Small Business Service and BusinessLink,
just to name a few? Do you think there is duplication in the advice
being given?
Mr Thompson: I think our experience
to date is that Acas has a unique role to play. It is complementary
in many areas, but not supplementary and repetitive. It has a
unique role to play because of the expertise and insight it has
gained over the past 30 years. That knowledge or resource is not
there within other agencies like the RDAs and CABs. From our members'
perspective, they go to Acas because they know that they will
get expert advice from them which they will not get from other
resources. That does not mean that agencies like the RDAs might
not have a role to play or be able to offer advice or maybe direct
people in areas where they can get more guidance on employment-related
issues; but I think what it does say is that Acas has a very unique
role to play, and it is a role that that it is succeeding in at
present.
Mr Wainer: If you look at the
other agencies, they do see Acas as having that unique role as
well. Where they provide some forms of advice they do refer employers
to the Acas helpline and Acas guidance.
Mr Yeandle: From an employer's
perspective, clearly an organisation like our own provides a wide
range of information on employment relations to our members; but
our experience in talking to companies who do not have the benefit
of our membership is that many of them see Acas as the prime conduit
which they would actually go to, and indeed their employees would
equally want to go to, I think, for advice and guidance. They
are seen as being very user-friendly. They have a very good website.
They provide straightforward, understandable guidance, and that
is absolutely critical. They also understand the world of work.
They have a whole range of people working for them who do understand
the world of work, and that is very important, I think.
Q46 Mr Hoyle: What you are saying
is that all that expertise is built up over many years, so really
this is the authority for advice compared to other agencies?
Mr Thompson: Yes, and I think
that is the fundamental principle, but it is also particularly
over recent years the way in which they are delivering for their
users, both employees and employers. From our side of the fence,
when we have asked employers what they think of Acas in comparison
to other agencies, we are looking at much greater levels of satisfaction.
94 per cent, on our last employer survey, are getting a good service,
compared to BusinessLink where we are looking at 41 per cent of
employers thinking they are getting a good service. It is a fundamental
principle of authority and impartiality; but Acas is actually
very good as well at delivering that to their users.
Q47 Chairman: Do you find sometimes
that other agencies claim expertise but actually just act as post
boxes to refer their clients to Acas?
Mr Thompson: That would not be
for the CBI to say. We can say that other agencies have Acas very
prominently on their website.
Q48 Mr Weir: We had earlier evidence
that there had been a general reduction in collective bargaining
and in multi-employer agreements, and much of the agreements between
employers and employees are now on a much more individualistic
basis. Given that, why do you think we need Acas to resolve individual
employment disputes between the employer and the employee; when
previously it would be a collective dispute but it is much more
individual now? Why do we need Acas funding by the taxpayer to
do that work?
Mr Yeandle: First of all, you
are right that the role of resolving collective disputes is less
important perhaps in terms of the numbers of cases that they have
to deal with, but it is still a very important role that Acas
has to fulfil. When those occasions occur they are often causing
concerns that are in the public interest to resolve as quickly
as possible; and it is important that we have the expertise, skills
and experience of officials who can deal with that. I have to
say, one of the things that was touched on in the previous set
of evidence—the reduction in the number of experienced officials
in Acas which we are going to see over the coming months—does
raise some concerns in our minds that it may be more difficult
for Acas to handle as expeditiously and efficiently as it has
done in the past the major disputes that inevitably will occur
from time to time. As far as individual disputes are concerned,
of course that is primarily dealt with through individual conciliation,
through the tribunal system; and, again, Acas has a lot of very
valuable services that it provides there. A key thing there again
is impartiality; and a key to that is that it should not be charged
for. If there was a question of Acas charging for individual conciliation
cases that would inevitably effectively undermine the independence
and impartiality that it has.
Q49 Mr Weir: Given that Acas's involvement
comes once the tribunal procedure has started and a claim for
tribunal has entered into a legal dispute, if you like, between
employer and employee, do you think a) there is some merit in
Acas becoming involved before it gets to the tribunal; and b)
to repeat the first question, which you did not answer, why should
the taxpayer fund resolution of these individual disputes through
Acas rather than going to a court where you end up paying for
a lawyer?
Mr Yeandle: I think in the general
public interest it is actually going to save more money in the
longer term. Acas has a very effective record of conciliation
in these. If Acas was not there to do that conciliation in an
impartial way then an awful lot of the cases that at the moment
never get to court, for one reason or another because Acas has
resolved them, would actually get to court and, therefore, the
costs of that process, the costs of the employment process, would
be much, much higher. It is a saving that is often not fully recognised
as one of the clear benefits that we as society get from the Acas
service.
Mr Thompson: If I could back that
up with numbers. If Katja had been here she would have told you
that Acas conciliation services often cost about £400-£450
per case, as opposed to £2,000 per case if it goes to tribunal.
If you put that into the volume of cases which Acas is dealing
with, that is a £30 million saving to the Treasury every
year. I think that reinforces David's point that there is a role
to play there, to try and keep individual cases out of employment
tribunals which is a hugely costly process.
Q50 Mr Weir: Do you feel Acas should
be involved earlier in the alternative dispute resolution procedure?
Mr Yeandle: I think that is an
area they could look into. Clearly Acas has got a role to play
in this area. I certainly do not think it would be something we
would be averse to. Equally of course Acas have been taking on
a more proactive role in recent times in encouraging good employment
relations, particularly most recently in the whole area of information
and consultation where Acas, often working alongside organisations
like ourselves and the CBI, has been very much in the forefront
of promulgating the business benefits and indeed the employee
benefits of information and consultation, and indeed improved
employee relations. I think there is a role for Acas to play in
that, but it must not be at the expense of all the other very
important roles that they equally carry out.
Mr Binley: I have a very quick question.
I was an active executive director up until May and I claim 25
years of that experience, so that gives me a somewhat distinct
position in this place, quite frankly, and I am pleased to be
able to represent that. There is an elephant in the room, there
is the tip of an iceberg of cases that Acas deal with and there
is a whole lot of black economy going on with regard to employment
disputes that do not even get attention. That black economy is
where workers say if I make a claim I can get one thousand quid,
and where employers say it is damn sight easier to settle with
a one thousand quid than in fact go through the process, which
is really very expensive. That happens, and I can tell you it
happens. What should Acas's role be in that and what might we
do to lessen that black economy, which I believe does no good
at all to good employee relationships?
Q51 Chairman: That is an extremely
big question, rather than the short one I was expecting. Can you
give a very brief answer, please?
Mr Thompson: The shortest of short
answers to that would be that we have got to identify where that
problem area is.
Q52 Mr Binley: I will tell you; see
me later.
Mr Thompson: It would be obvious
that it is amongst the small employers. In our own surveys we
find that 100 per cent of small employers, those with under 49
employees, are settling cases before they get to tribunal, even
where 46 per cent of that 100 per cent—if you are following
my short answer—feel that they have a very strong case,
or vice versa the employee or the individual has a very weak case.
The response to you would be yes, we have to identify that, we
have to target it and we have to look at solutions that support,
in particular, that small employer community to give them more
confidence in the system.
Q53 Judy Mallaber: Can you expand
upon your concerns about the fixed periods for conciliation in
cases and what the problems are with that?
Mr Wainer: I think we all recognise
that conciliation is a much better option than litigation and
Acas figures show that they manage to stop around 77 per cent
of cases actually reaching tribunal. The introduction of fixed
periods was a big change to the system, with seven weeks, 13 weeks
and then it is still unlimited for discrimination and equal pay
claims, and the premise of their introduction, the rationale,
was pretty laudable in that it would encourage speedier settlement,
but the practice has not really followed that theory. Talking
to Acas, their clear-up rates have remained generally the same,
but the number of cases coming to them has actually dropped, although
there are no hard and fast figures because it has only been a
year or so since the changes were introduced. It will be interesting
when they come out with their formal figures to see what actually
has happened. Certainly, our members say that often the seven
week and the 13 week period is just not long enough for any meaningful
conciliation—tribunal chairs might not issue directions
quickly enough to allow both parties to have relevant information,
it often takes a couple of weeks to properly complete the ET3
response form, so that all eats into the fixed conciliation period
which leaves a very short timescale for any meaningful discussion
to take place between the two parties.
Q54 Judy Mallaber: What are you suggesting
should happen and is there a danger that if, say, it was 20 weeks
you would just have brinkmanship going up to the 19th week rather
than up to the 13th week?
Mr Wainer: We would agree with
what the TUC said earlier, that before we had these fixed periods
a lot of settlement was done on the steps of the courthouse. I
think it is always going to be a difficult one, because parties'
minds will remain focused on the hearing date as the final date
by which to resolve any dispute; sadly, although the rationale
was laudable when they were introduced, we would certainly promote
the Government and Acas reviewing the impact of those fixed periods
to ensure that Acas are able to offer the most effective service
possible. We would not want employers and employees who are about
to resolve their dispute to have Acas stepping out of that if
they do have discretion to carry on beyond the seven or 13 week
period, but probably because of resource constraints I do not
think that has really happened very much to date.
Q55 Judy Mallaber: Do you have any
particular proposals that you are looking at?
Mr Thompson: We would not have
particular proposals at this stage, but we have certainly flagged
it up as an issue that is to be dealt with. The concerns that
you are raising are very valid concerns, that you do not just
prolong the exercise and increase uncertainty. Any review of this
that takes place and has to balance those concerns, has to bear
in mind that whilst the two parties are still talking you can
maintain the employment relationship, but once you are into a
tribunal/court situation it is very difficult to maintain that
relationship, and that should be one of the underlying principles
within any review of fixed conciliation. Acas actually has an
extremely good track record of maintaining relations between both
sides, and once those two sides are talking there should not be
anything that incentivises them to cut that short and go for a
quicker, easier option.
Mr Yeandle: Can I add a couple
of points. First of all, we do have some concerns—perhaps
not so much today although it is beginning to build up—looking
to the future with the fact that clearly Acas, particularly at
the regional level, is going to lose a large number of experienced
conciliators. We are worried that there will be the difficulty
of getting conciliators and, clearly, those conciliators are equally—it
is spelled out very clearly in the work programme of Acas—going
to be doing a wider range of roles and responsibilities. Therefore
there is a danger quite often that tracking down the conciliator
and getting them to be proactive rather than reactive and getting
them really actively involved in the conciliation, not just dealing
with it as a telephone message service between the two organisations,
is an issue. There is another point that I do want to raise, which
may not be directly related to Acas but does raise a concern in
our own minds. Many of the employers that we represent at tribunals
have got recognised unions; historically, of course, it meant
that you were dealing directly with the trade union in terms of
the interface to do with the tribunal. What we find increasingly
now is that more and more trade unions have passed the responsibility
of dealing with the tribunal to a firm of employment lawyers,
and it is certainly our experience that we do not get quite the
same approach to conciliation from those employment lawyers as
we have historically got perhaps from the trade union officials
who were dealing with the case.
Chairman: That is an interesting comment
which leads on to Mick Clapham's question.
Q56 Mr Clapham: Can I start with
the point that you made earlier about the shift that is discernable
in the way that Acas is now dealing with good employment relations.
Is there evidence from your experience amongst your members that
this has resulted in a reduced dispute resolution?
Mr Yeandle: I cannot honestly
say that there is a specific natural move from one to the other.
There is a lot of evidence, of which you are probably well aware—the
CBI have commented on it already, the TUC have also commented
on it—that good employment relations can improve work performance
and, clearly, there has been a lot of work done, particularly
on information and consultation in recent times. There is, therefore,
a lot of academic anecdotal evidence, but it is very difficult
to specifically identify individual organisations to do so. We
would be very supportive of the type of work that Acas has done
in this area, providing it does not deflect it from the other
very important areas and, very importantly, if as they are inevitably
doing, moving into more of a charging environment in this area,
it does not potentially undermine the impartiality that they have
to demonstrate in other areas. It may well be quite difficult
to be charging—we are not opposed in principle to the concept
of them charging, but I think they have to strike the right balance
in these areas, because clearly if they over-emphasise the charging,
it could have an active impact on the perception of both employers,
employees and trade unions of their impartiality, which is absolutely
fundamental to the primary role that they have of seeking to resolve
individual and collective disputes.
Q57 Mr Clapham: I would agree with
that. Is this something that you have raised at all with Acas
or others?
Mr Yeandle: We certainly have
raised it on a number of occasions with Government ministers and
Acas officials, so what I am mentioning now is not something that
would be news to them I think.
Q58 Mr Clapham: A little earlier
you referred to the fact that your business is done much more
now with lawyers rather than with trade unions. Given that situation,
is there any argument to say that Acas ought to be still promoting
collective bargaining?
Mr Yeandle: I do not see that
there is a case for Acas to promote directly collective bargaining.
They clearly have an important role in collective bargaining—one
of the major roles that I have seen over the last three or four
years where Acas have been extremely effective is handling disputes,
problems, difficulties with collective bargaining under the statutory
trade union recognition procedure. In our experience—and
we have been actively involved in a number of these cases—Acas
have played a very important, helpful role in developing this
with their impartiality and their expertise. I certainly would
not see them as having, if you like, a requirement to actively
promote collective bargaining. As far as collective bargaining
is concerned, that should be something that is determined by employers
and employees, subject of course to the legislative framework
within which we operate.
Mr Thompson: If I could just reinforce
that, obviously we heard the evidence before from the TUC which
gave the TUC's very strong position in this, and I think we would
give the very strong CBI position on this—I flagged it up
at the beginning, that we would not see this as being a core role
or a role for Acas at all. There are strong reasons for that which
David is alluding to, that the demand has got to be there. We
were talking earlier about where the problems might lie in the
system around dispute resolution, and some of the biggest problems
are in the SME community. All the evidence from our own survey
and from the workplace employee relations survey shows that, particularly
in a small workplace, employees want direct communication with
their employer, they do not want indirect mechanisms put in place.
Richard, you have got some background on that.
Mr Wainer: Our survey data from
our Employment Trends survey last year showed that direct methods
of communicating with employees were twice as popular as the employee
representative bodies and trade unions, and that trend is even
more pronounced within the small employer community, those with
under 50 employees.
Q59 Mr Clapham: Nevertheless, given
what you have just said, you would feel that if Acas was to have
a smaller profile around industry it could be to the detriment
of good relations in industry.
Mr Thompson: We would say that
Acas has had a very positive impact on employee relations overall
in the UK. Where collective bargaining is already in place Acas
has a role to play in facilitating those discussions basically
when those discussions break down, but we see that there is a
fundamental line which you would be crossing over if you were
to say it was Acas's obligation to start promoting collective
bargaining across the economy where there was no demand for it.
At the moment, all the evidence suggests that there is no demand
for it.
Chairman: To enable the issues that we
rather short-changed in the last evidence session, for which I
apologise, we are going to take the charging section next and
here I look to Peter Bone.
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