Rapacious Employees and the tribunal system

The newpapers have been packed with stories about rapacious employees abusing the employment tribunal system and taking employers to the cleaners (for example, today's rant in the Daily Mail, which is riddled with inaccuracies such as asserting the burden of proof for all claims - not just discrimination claims after the burden shifts - is always on the employer, who are "presumed guilty unless they can prove their innocence, a direct contradiction of centuries of British justice". Dangerous and misleading drivel.).

But as a barrister instructed primarily by employers, I hear this view expressed a lot. Employer clients tell me the tribunal system favours employees. Employee clients tell me the opposite. But where does the truth lie?

Most employment cases are decided by a panel of three. An employment judge chairs the panel. The other two members are picked from a panel chosen by the CBI, and a panel chosen by the TUC, who - much like magistrates - are usually people in full-time jobs who sit for a few weeks a year. This ensures that the tribunal’s approach is balanced and based on practical experience of life at the coalface of industry or office life.

There is truth in the charge that the employment tribunal system is open to abuse. Serial litigants (although my experience teaches me there are probably fewer than half a dozen of these in the UK) make hopeless job applications, then lodge specious discrimination claims to extort a few thousand pounds from employers. But tribunal staff are generally wise to this (they keep seeing the same names crop up), and tribunals are often willing to make substantial cost orders against these individuals if the employer has the resolve to challenge the claim.

Likewise, some employees bring claims knowing them to be hopeless or untrue, hoping to inveigle a compromise payment out of their employer. What can be done? Probably very little, other than take it on the chin and recognise it as part of the cost of doing business, or fight the case and persuade the tribunal that the claim was misconceived (in which case, the tribunal can award costs).

But to argue this justifies the abolition of employment rights is petulant and unsophisticated. The workplace is where most of us spend most of our time, and where we invest much our self-image and self-esteem. Employers have the power to make decisions which impact fundamentally on employees’ lives, and employees are vulnerable to an employer’s unreasonable or improper use of this ability. Employment laws have arisen to strike a balance between the competing rights of the employee not to be treated unfairly, and the employer to be allowed to run its business in the way it thinks fit. Any system of laws requires an effective enforcement mechanism, which is where the employment tribunals system comes in.

Some women cry rape, knowing the allegation to be untrue, but nobody would seriously suggest abolishing rape laws. Likewise, some employees bring specious claims, knowing them to be untrue. That is not, of itself, a reason to throw out employment rights for everybody.

Tribunals already have the power to strike out hopeless cases. In practice, this is rarely used as a ‘he said / she said’ dispute is not normally the type of dispute which a tribunal can say has no reasonable chance of success. It needs a tribunal hearing to decide who is telling the truth.

And most cases are not black or white. They turn on different people’s perception of events, or questions such as whether the employer gave an employee a fair chance to improve job performance before dismissing them. Even if an employee ultimately fails to succeed in such a claim, it is quite wrong to say they should not have the opportunity of bringing a claim.

One possibility for reform, floated by former Enterprise Tzar Lord Young, is to extend the period of time an employee must work before bringing an unfair dismissal claim from one year to two years. This would reduce the number of claims, but probably not by much, as it would not stop employees framing their claim as one of discrimination or whistleblowing – neither of which require the minimum service period to succeed.

Another possibility is introducing a fee for bringing a claim, to be returned if the claim succeeds. But this is deeply unattractive. The point at which someone loses their job, plunging them into prospective impecuniosity and the Byzantine social security system, is not the point to start demanding money. In addition, since most cases settle, the reality is that this fee would end up being reimbursed by the employer as part of the settlement – thus adding to the employer’s cost.

It can cost an employer upwards of £10,000 to pay lawyers to defend a claim. But the answer is simple: why pay lawyers? When a claim is only worth a few thousand pounds, it makes no sense at all to use a lawyer’s services. Sometimes important points of principle arise, or (unusually) case involves a significant sum of money, in which case it makes business sense to hire a lawyer. But tribunals are accustomed to owner-managed companies representing themselves, just as they are accustomed to employees representing themselves. Almost all tribunal judges nowadays are courteous, helpful and will explain the procedure and the law to you. They won’t present your case for you (or, indeed, for the employee), but they will help you present it yourself.