Joint Committee On Human Rights Appendices to the Minutes of Evidence

5. Letter to the Chairman from Rt Hon Patricia Hewitt MP,

Secretary of State for Trade and Industry, on the Employment Bill

Thank you for your letter of 16 April. I entirely recognise the importance that attaches to the policy justification for the provisions of the Employment Bill which restrict access to employment tribunals. I am pleased to give you a full recital of the Department's policy thinking. This was rather compressed in my—already overlong—letter to you of 14 February.

I am confident that the Committee's conclusion is right that the provisions of the Bill serve legitimate public interest objectives. As I understand it, Lord Wedderburn's principal objection is based on his view that the Government has a policy goal of reducing the numbers of tribunal cases across the board, and is using a denial of access to justice to achieve this aim. But that is not what the Bill sets out to do. Our objective is rather to encourage both sides in any workplace dispute to talk to each other first, thus reducing the number of unnecessary employment tribunal cases. This is a crucial distinction. We quoted the SETA data in an attempt to give some idea of the scale of the problem. But it is not the SETA data itself which provides the policy justification. It only quantifies it, in an admittedly imperfect way. Let me explain this in detail, with reference to your specific questions.

It follows from this that the answer to the first question in your letter is that the purpose which the Government expects to advance through clause 33 has not changed since I wrote to you. (I should point out that in the latest version of the Bill this clause is now numbered 32. However for the purposes of replying to your letter I shall continue to refer to it as c33.) I do not accept that Lord McIntosh's comments as quoted in your letter contradict my explanation of the purpose of c33. I do not intend to give the impression that I am re-interpreting Lord McIntosh's remarks, because I am not. It is a consequence of quoting out of context and selectively over many hours of debate that remarks may appear inconsistent when in fact they are not. His point on encouraging communication and dialogue between employer and employee is, in my view, fully compatible with the aim of preventing unnecessary recourse to tribunals to determine issues which are capable of being settled within the workplace. It is simply expressed in a different way. The dispute resolution measures in the Bill contain both 'carrots' (new statutory procedures available in every workplace and encouragements to use them) and 'sticks' (rules on admissibility to tribunals, and mitigation of tribunal awards).

Because its critics have concentrated on the 'sticks' to the exclusion of all else, Lord McIntosh was reminding the Committee that the Bill contains 'carrots' too.

To put that another way, clause 33 is designed to encourage both sides to talk and thus at least provide an opportunity to find a mutually acceptable resolution of the problem. We fully recognise this will not be possible in all cases. The requirement to set out grievances in a letter to the employer before taking a claim to a tribunal should not be seen as a punishment, but as a responsibility to start a dialogue before resorting to the judicial route.

Let me turn to your second question, the significance which attaches to the survey figure I quoted. The policy objective for clause 33 does not rest on the findings of a single survey. The Survey of Employment Tribunal Applications 1998 is merely one indicator—used in my letter as a shorthand—of a situation for which there is plenty of corroboration. You quote Lord McIntosh's comment at Lords Second Reading that its findings had little significance for policy-making. The basis for this comment was, as I understand it, that the extra information from this survey—which we freely admit did not ask a direct question on this topic—is insignificant when judged against the weight of pre-existing opinion and fact. SETA provided results which were fully consistent with our overall judgment. Whether or not SETA statistics are individually reliable (and we believe that, within certain caveats, they are) does not undermine our case that we have a legitimate policy objective to address a genuine and widespread problem, and that we are addressing it in a proportionate way.

It is helpful to set the SETA findings in context. I doubt there is much disagreement that a significant number of workplaces in the UK do not have any form of disciplinary and grievance procedures or have substandard procedures. We have estimated these numbers in the Regulatory Impact Assessment of the Bill to be around 600,000 and 340,000 respectively, leading to an estimate that about 6 million people do not have access to procedures that meet the standard we are introducing. These estimates are drawn from the 1998 Workplace Employee Relations Survey and our own estimates. It is also a commonly held view that, even where adequate procedures are in place, in a substantial number of cases these are not followed. This opinion is based on a multiplicity of sources over many years—for example, the work of ACAS and other employment relations agencies, the findings of employment tribunals, and previous research carried out by the Department (Earnshaw et al). Although a widely held view, its frequency is difficult to quantify. We have attempted to do so using SETA, as the mostly recently produced data. According to SETA, only 32% of applicants and 58% of respondents said that the procedure (where there was one) was fully followed through. SETA also shows—as quoted in my earlier letter—that in 37% of cases there was no meeting and no procedure and no other attempt to resolve the dispute. These findings also appear to confirm another widely held view, that cases where procedures have not operated are over-represented at tribunals.

The Government believes that f fundamental tenet of good employment relations is that there should be a proper system whereby employees and employers discuss employment problems in the workplace. There are a number of unwelcome consequences when these systems do not operate. On one side, there is damage to the employment relations and productivity of the organisation concerned. On the other, an employee with a grievance who has no access to a workplace grievance procedure, or who chooses not to use it, may simply walk out of the job. Alternatively, or in addition, he or she will take the employer straight to a tribunal. These outcomes are not as desirable, for anyone, as a dialogue between the parties to resolve the problem in-house. If no resolution is possible, then the employee will of course still be able to make a claim to the tribunal. It is this fundamental principle which underlies my point that "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."

As you know, the Bill proposes a minimum system of dispute resolution procedures which it is incumbent on both the employer and employee to use. These procedures are modest and designed to be simple to operate, as discussed in my earlier letter. They consist in essence of a written statement of the problem, a meeting to discuss it, and an appeal stage. It is axiomatic when creating new rights and obligations that the regulations must be backed up with some means of enforcement. Indeed other provisions of the Bill—specifically c38—are now strengthening the penalties for non-compliance with other rights in many circumstances. The way we have chosen to enforce the statutory procedures is through the adjustments to awards under c31 and restrictions on admissibility under c33.

I am confident that these clauses represent a sensible and proportionate system of enforcement. C33 provides that individuals in certain circumstances—notably those still working for the employer—should not be able to take a claim to a tribunal unless they have completed the first stage of the procedures, ie that they have written to the employer setting out the grievance. In this way, enforcement simply reinforces the use of the procedures. The Government is committed to ensuring that even this modest step is not required where the individual is at risk of harassment or bullying. The Bill allows a second chance to those who do not meet the requirement of c33, by extending time limits for filing a claim so that they have extra time to meet their obligations. Secondly, either party faces an adjustment to the aware where they have unreasonably failed to use the procedures.

My earlier letter contained full detail of these measures, and the Committee has accepted that they are proportionate to the aim. I hope this further explanation has provided reassurance that the aim itself is legitimate. I believe it has answered both your third and forth questions.

Finally I owe both you and the Committee my sincere apologies for missing your deadline.

7 May 2002

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