Resolving workplace disputes

A Law Centre (NI) pre-consultation response

April 2008

1. Introduction

1.1  Law Centre (NI) welcomes the opportunity to comment on this pre-consultation paper.  In this response we identify those areas where our experience suggests the current system works well, those areas that work less well and the problems the consultation could address.

1.2  We would accept that the current grievance procedure is overly complex and in need of reform.  There are compelling reasons, however, for the retention of the statutory disciplinary process in Northern Ireland.  Principal among these is that Northern Ireland has a significantly higher proportion of small businesses relative to the rest of Britain for whom the statutory disciplinary procedure provides welcome clarity as to their legal obligations in this area.  It would be a mistake to adopt wholesale the proposals put in place by the Department for Business Enterprise and Regulation Great Britain. 

2.  Access to Justice: the Need for Advice and Representation

2.1  We welcome the fact that DEL is prepared to look at the wider issue of the problems in the system that currently limit access to justice for claimants.  The proposal to fund a research project looking to understand what happens to cases in the system is a good one and the Department is right to focus on the experiences of claimants.  We would encourage the Department to explore those factors that, in our experience, discourage claimants from pursuing access to justice.

2.2 One significant barrier to justice is the policy focus on vexatious litigation.  We would accept there will always be vexatious cases; our experience is that the number is very small. For this reason, we feel using this issue as a main driver of policy, rather than aiming to increase the number of meritorious cases being taken to completion, acts as a barrier to accessing justice and is an inappropriate driver of policy.  Many meritorious claims are not brought to hearing, are abandoned, or are settled for a reduced sum due to the lack of proper representation. This should be a stronger driver of policy.

2.3  Much of the current thinking on possible reform for resolving employment rights disputes focuses on streamlining the system and reducing the burden on Tribunals. This approach tends to ignore one of the main root causes of disruption and delay in the system; claimants who cannot afford proper advice (which cannot be provided by a general LRA advice service) or legal representation.

2.4 Reform of the system for resolving employment disputes should keep the issue of the access to rights of the individual at the forefront.   Our experience is that the system deters many individuals with valid claims from pursuing their cases.  We are concerned that the high numbers of settlements and withdrawals of cases are due largely to the built-in barriers within the system and a wide-ranging research project could confirm this.  These include: the adversarial nature of the Industrial Tribunal; the lack of partial advice; the legal complexity of the Tribunal process; the high cost of representation; the way the system appears to favour the represented parties who are more likely to be legally represented, which in the majority of cases, is the employer and the measures taken by respondents’ legal representatives, such as costs threats and delaying action.

2.5  There is a great need for the provision of dedicated and detailed advice to allow individuals to more accurately judge whether they should proceed with a case. The need becomes acute when it comes to representation before the Tribunal.  The recommendation in the Gibbons Review of setting up a government funded impartial advice provider for those involved in Tribunal cases is welcome, but what is really needed is the establishment of a system of independent partial advice that would be able to inform a claimant whether he/she had grounds for advancing a case.     

2.6  The lack of sufficient specialist tribunal representation units or Legal Aid for Industrial Tribunal cases precludes access to legal representation for many claimants.  Even traditional sources of assistance are disappearing. The increasing complexity of employment law and the formality of the Tribunal procedures mean that trade union representatives, CAB advisors and other free advice centres have now become more and more reluctant to take on Industrial Tribunal claims. The outlook for claimants in need of representation is getting steadily worse.   

2.7  The costs regime of the Tribunal that requires parties to pay their own legal costs win or lose also discourages claimants from pursuing their case.

2.8 To illustrate some of the difficulties in the current system we believe it would be helpful to consider the experience of a typical claimant trying to bring a case to Tribunal:

	The first point of call for someone who believes he or she has an employment case is likely to be a solicitor. The claimant will be advised that there is no Legal Aid for cases before the Industrial tribunal.
	The claimant must then consider whether she or he can afford to pay the solicitor themselves. The solicitor will generally require a substantial lump sum payment up front, which many prospective claimants – who may just have lost their job and be in financial jeopardy anyway – cannot afford.
	The solicitor should advise that their legal fees will have to be paid, win or lose. These fees are, given the lengthy nature of Tribunal hearings, likely to run into thousands of pounds. In many cases the fees are going to be more than the case is worth, or would eat up such a large proportion of any potential award that it wouldn’t be worthwhile. Most claimants, unless highly paid or wealthy, will find solicitors fees out of their reach.
	For most, the only realistic option is therefore to try and secure voluntary sector representation or go it alone. Voluntary sector representation is extremely limited being effectively confined to the Law Centre. At this stage many people are likely to give up, feeling that they aren’t going to be able to manage and that they have little chance of success on their own. For someone without experience of courts and legal knowledge the prospect is daunting. They are also undoubtedly correct to feel that, as unrepresented claimants, they now have a lower chance of success.
	Claimants who go on to lodge proceedings often make errors in drafting or framing their complaint due to lack of representation. This can ultimately lead to considerable waste of Tribunal time in resolution.
	At this stage the claimant will start to receive legal correspondence from the employer’s solicitor. This will very often commence with a letter giving the opinion that the claim is misconceived, unreasonable, and has no prospect of success (irrespective of the actual merits). The claimant will be warned (or threatened) that if they proceed the other side will apply for legal costs. The prospect of another legal bill has a chilling impact on the claimant.  Many will be scared into withdrawal.
	The claimant may look to the LRA for advice, but the conciliation officer is bound to be neutral and can’t give the advice tailored to the claimant’s needs.
	Next the claimant will receive legal demands from the solicitor for Further Information and Discovery. These will be lengthy and detailed, full of subsidiary clauses, and framed in opaque legalistic language. The claimant will be required to identify and deconstruct complex legal and factual issues. To another lawyer this might make sense, but the layperson will find this very difficult to understand and feel incapable of dealing with it. Once again, claimants are intimidated and left feeling overmatched.
	The claimant who persists and tries to answer the interlocutory requests often, understandably, fails to address them properly or gives an incomplete response. The employer’s solicitor will then refer the matter to the Tribunal seeking an Order that the claimant comply. The claimant, who may be trying his or her best without legal advice, is then at peril of costs being awarded against him or her, because an extra hearing is necessary, and under even more pressure.
	For those who persist despite all of the above, the prospect of having to go into court and run the case themselves can eventually prove too much for non-lawyers. They will come under pressure before the hearing to withdraw or to accept a nuisance settlement, for example £500 “to go away”.
	The employer’s solicitors are often happy to let meritorious cases drag on like this right up to the door of the Tribunal, confident that many claimants will eventually lose heart, feeling that the deck is stacked overwhelmingly against them.
	The unrepresented claimant who goes on to run their own case is certainly brave, and sometimes foolish. It is readily apparent that there will be a significantly decreased chance of success due to inequality of arms. The Tribunal is, as an impartial body, limited in what it can do to redress the balance, (the supposed 'over-riding objective' notwithstanding).

2.9 On this analysis, which is informed by our experience as one of the few sources of legal advice for claimants, many meritorious claims are being hindered and not pursued because of defects in the system. The high number of withdrawals shown by the statistics should not be seen as a success, but rather as a reflection of the inherent unfriendliness of the current system for Claimants. We believe that research into the experience of Tribunal users would bear this out.

2.10 Those that do proceed to Tribunal and fail risk being labelled as vexatious. Many of the so-called “vexatious litigants” are the product of the workings of the system described above. They have a genuine sense of grievance, but they are deprived of the legal advice they need to appreciate the merits of their case, and then penalised by costs orders for that lack of understanding. This is manifestly unfair.  

2.11 If proper provision of dedicated partial advice and representation were to be put in place, then the use of punitive powers would be more proportionate and justifiable. If a person has had proper legal advice and chooses to go forward against that advice, then, they may be behaving in a genuinely vexatious manner.

2.12 It is our experience that claimants whose case is weak or legally misconceived are much more likely to be able to “let go” if they have had legal advice from someone that they trust who is clearly on their side. In the existing system they are much more likely to muddle on as best they can.   

2.13  Given the lack of legal advice and representation, these claimants end up appearing as unrepresented litigants. This results in protracted and costly hearings, often due to a perfectly understandable difficulty in grasping complicated legal points and procedures. The reaction to this problem – which is understandably frustrating for Tribunals and representatives - has been to increase costs and the use of costs orders as a deterrent, rather than address the root cause of the problem. Proper advice and representation is the answer.

2.14 This would result in fewer weak cases being brought and more withdrawal of such cases, while also allowing speedier and more effective resolution of strong cases. It is much easier to reach resolution when both sides are represented.

 2.15 Any measures that address the symptoms without tackling the fundamental problem are cosmetic and likely to be ineffective. They also have the effect of making it even more difficult for genuine claims to be successfully resolved – as we hope we have shown above.

2.16 Northern Ireland has the opportunity for taking both the best of the current system and the best of the changes from Britain to fashion a system for resolving employment rights disputes that meets the needs of Northern Ireland and allows greater access to justice for individuals while still improving the efficacy of the system.

2.17   These views should be read in conjunction with our comments on encouraging greater use of Alternative Dispute Resolution to resolve employment disputes.

Recommendation

	The Department should implement the proposed research project looking at the wider barriers to justice that prevent many meritorious claims from being pursued successfully. This should focus on reasons for withdrawals and settlements.
	The consultation should be expanded to consider (1) provision of a dedicated partial advice service that can give claimants proper advice on the merits of their claim; and (2) provision of representation to allow those with good cases to bring them forward effectively.

3.  Statutory Procedures

3.1  Law Centre (NI) supports the review of the statutory dispute resolution procedures, as certain aspects have led to considerable difficulties for both claimants and respondents. However we believe that it would be a mistake to limit options in the forthcoming consultation to rejection or endorsement of the procedures as a whole.

3.2  The statutory disciplinary and dismissal procedure and the statutory grievance procedure are distinct in scope and operation and each should be considered individually and addressed in separate consultation questions.

3.3  Our experience and opinion of the statutory grievance procedure is, we suspect, likely to correspond with that of the overwhelming majority of Tribunal users and other stakeholders. The procedure is complicated, time-consuming and legalistic and confuses employers, employees and legal representatives. There is a strong case for its removal.

3.4  On the other hand, the statutory disciplinary and dismissal procedure is simple, easily understood, and provides welcome clarity for both employer and employee. There is a strong case for its retention.

3.5  As the two processes are so different in their mechanism and in the experience of Tribunal users we submit that individual consideration of each would allow consultees to focus clearly on the relevant issues. It would also provide the Department with more useful data and a fuller response.

Grievance Procedure

3.6 Law Centre (NI) opposed the introduction of compulsory grievance procedures as we believed that they would operate as a bar to access to justice for claimants. These fears have, in our experience, been realised. Claimants or potential claimants very often find themselves trying to bring a claim without any legal advice or help, due to the factors we have identified earlier in this paper. They are either ignorant of the statutory procedure or baffled by its complexity. As a result, a mistake in following the procedure leads to meritorious cases being disallowed.

3.7  It appears that the Tribunals and Courts share some of this concern, as the number of decisions generously interpreting the requirement for a written grievance shows.

3.8 The procedure, although intended to be straightforward, has proved to be very complicated in operation. We would like to highlight a number of areas of concern:

1. The procedure need only be followed by employees, not agency or other workers, and only employees gain an extension of time to lodge an IT1 by submitting a written grievance. The claimant therefore has to be able to identify whether he or she is an employee or a worker. This is an extremely complicated and specialised legal question that continues to engage the appeal courts, but unassisted individuals are expected to be able to answer it as a first step in this procedure. The penalty for getting the answer wrong can be reduced compensation or finding the case to be out of time and statute-barred.

2. Claimants with compound cases – perhaps involving unfair dismissal, discrimination before dismissal, and monies owed – find that they are following two separate procedures. The claim for unfair dismissal has to be lodged within three months, while the grievance procedure may well still be ongoing. In one Law Centre case the intricacies of following the grievance procedure meant that we were obliged to lodge three IT1s in relation to the same set of facts. Again, it is easy for claimants to make mistakes that can have draconian consequences.

3. Failure to clearly raise a particular claim in the grievance procedure bars a claimant from pursuing that legal issue before the Tribunal. Once again the claimant is expected to have a detailed legal understanding at an early and supposedly more informal stage. Claimants who are unable to access advice and who do not frame or label their complaint correctly will often lose their right to a remedy.

3.9  These are areas of serious concern for workers and employees. More generally, the statutory grievance procedure has led to employers, understandably, taking a very “safety first” attitude to complaints. This leads to formality and legal escalation at the very start of the process, which, paradoxically, can lessen the chance of the internal resolution the procedure was intended to promote. At the first hint that an issue has arisen the parties become bound into the statutory model, leaving less scope for informal resolution options.

3.10  We do not intend to analyse the operation of the grievance procedure in greater depth at this stage, as we believe the case for its removal to be a compelling one.

3.11  The aim of encouraging resolution of disputes within the work-place remains worthwhile, but any proposed replacement system should be less mechanistic and must not set up bars on access to justice.

Disciplinary and Dismissal Procedure

3.12   In contrast to the grievance procedure, the dismissal procedure has proved relatively simple and straightforward in operation. In essence:

1. The employer has to give written notification to the employee that there will be a disciplinary meeting, what it will be about, and that the outcome of the meeting could be dismissal.

2. There must be a disciplinary meeting.

3. There must be an appeal stage.

3.13   None of this imposes a particularly onerous burden on the employer – it is really just setting out the minimum procedural fairness that one would expect where a drastic sanction such as dismissal is being proposed. Indeed, before this principle was codified in the statutory procedure, the courts had spent many years developing case-law in that direction.

3.14   In the modern world, a person’s job is an important and defining aspect of identity, and the loss of that job can have correspondingly serious, sometimes devastating effects. If this is accepted, and it seems difficult to dispute, then it follows that the decision to dismiss should not be taken lightly. The statutory procedure, as with many other statutory rights, simply sets out an irreducible minimum standard of conduct for the employer.

3.15   Following the first step avoids the “ambush” meeting, where the employee is taken by surprise and is therefore unable to set out their case. It is also designed to ensure that the decision will not be a “knee-jerk” one, and that all sides will know in advance what the meeting is about and how serious the matter is.

3.16   The second step – the meeting – allows the employee to have their say and make any representations. It should allow the issue to be thoroughly ventilated, avoiding a decision that is not based on the full facts.

3.17   The appeal stage is in accordance with the natural rules of justice, that the verdict can be referred to a higher authority for a review, so that a mistaken decision may be rectified.

3.18   Although employers and employers’ representatives may instinctively baulk at the retention of these legal obligations, we believe that they would find it difficult to argue that these requirements are not straightforward and fair.

3.19   We believe that it is particularly important to ensure procedural fairness in relation to dismissal, because the law already allows the employer considerable latitude when reaching the decision to dismiss. If the procedure is fair, the employer need only show that the decision falls within the “band of reasonable responses” to avoid liability. This allows for a wide measure of discretion and makes it difficult for the employee to dispute the dismissal.

3.20   With the scales tilted towards the employer with regard to deciding whether the decision was reasonable, the employee should be able to expect a fair procedure and a fair hearing at the very least. Repealing the statutory dismissal procedure would be a retrograde step.  

3.21   To remove a clear, simple and just rule and replace it with uncertain guidelines would send out entirely the wrong message to employers. It would be likely to lead to less adherence to procedure and more procedural unfairness. This would ultimately result in a greater number of unfair dismissals.

3.22   Thus, while employers may not like the compulsory procedures, they may ultimately benefit employers as much as, or even more than, employees. By following them, employers will significantly diminish their exposure to unfair dismissal claims.

3.23   We believe that the disciplinary procedures are now well understood by employers and that awareness of what they should do when dismissing someone is high as a result. This has only come to pass because of the clear codification and punitive sanction that the regulations provide. The procedures have been in place for some time and have bedded in well.

3.24   Introduction of a new system or reversion to a previous one would only confuse matters further, with employers needing to be educated again from the start as to their obligations, leading to uncertainty and expense.

3.25   We have set out above the case that the retention of the statutory dismissal procedure actually benefits employers as a class. This is particularly applicable in Northern Ireland, as we have a much higher proportion of small employers in this jurisdiction than elsewhere in the UK. Small businesses are much less likely to have set disciplinary procedures of their own, but awareness of clear statutory procedures would enable them to offer employees basic procedural fairness, avoid dismissals based on incomplete or incorrect facts, and reduce the possibility that they might be held liable for unfair dismissal.

3.26   We believe that there is a clear case for retention of the statutory disciplinary and dismissal procedure.

Recommendation

3.27   The consultation should decouple the consideration of the grievance procedure and the disciplinary and dismissal procedure. Separate questions should be put for each procedure and a separate decision reached on the desirability of retention or repeal. 

4.  Alternative Dispute Resolution

4.1  Law Centre (NI) strongly supports exploring the options of ADR for certain employment disputes (while recognising that it will not be appropriate in all cases).  The benefits of ADR include the following: 

1. it provides a less confrontational and more positive means of resolving disputes (which is particularly valuable where an employment relationship is continuing);

2. it is less formal and more accessible than the Tribunal route which means that unrepresented claimants have a better chance of successfully pursuing a claim;

3. some forms of ADR may allow for a more flexible remedy/resolution than available from a Tribunal;

4. it is generally speedier and less costly than the Tribunal route.

4.2   While arbitration is clearly part of ADR, we suggest it may be appropriate for the Department to consider it separately from conciliation, mediation and early neutral evaluation.  Arbitration is an alternative to the Tribunal route and results in a decision which is binding on the parties whereas the other forms of ADR precede or run parallel to Tribunal proceedings and are non-binding (conciliation becomes binding at the behest of the parties).  

Conciliation

4.3  Conciliation is a particularly beneficial form of ADR because resolution is totally in the control of the parties to the dispute.  It is therefore possible for both sides in a conciliation to feel they have achieved a good resolution, which is particularly important if the employment relationship is continuing. The flexibility of the LRA’s conciliation service means that it is an option worth considering in most types of disputes.  It can be particularly worthwhile in resolving straightforward disputes (e.g. unpaid wages, holiday pay etc).

4.4  However, in our view, unrepresented parties (particularly claimants) do not fare as well in the conciliation process as they would, if represented. This is due to the fact that the LRA, by its nature must remain impartial and cannot advise a party on the merits of specific settlement terms.  Increased provision of partial advice for claimants (as set out in part two) would enhance conciliation.

Mediation

4.5  Mediation is probably not appropriate for more straightforward disputes as it requires a greater time commitment by the parties than conciliation. This form of ADR is better suited to more complicated cases and, in particular, situations where there has been a breakdown of relationships and parties perhaps need guidance towards achieving resolution.  However, the fact that mediation does not impose resolution on the parties means that there is a better chance of preserving the employment relationship than where the parties engage in a confrontational Tribunal hearing.

4.6  It would be helpful for the consultation to explore the following issues:

1. Are there types of disputes, which are particularly suitable for mediation?

2. Are there particular types of disputes, which are unsuitable for mediation?

3. Who should act as mediators? (eg. Tribunal chairs,  employer in-house mediators, others)

4. Should mediation on some cases be compulsory?  If so, should there be a sanction for unreasonable refusal to engage?

5. Should there be an “opt-out” from mediation for cases, which are clearly unsuitable?  If so, should the decision to opt-out lie with the parties or should the mediator decide whether opt-out is appropriate?

Early Neutral Evaluation

4.7  Early neutral evaluation would be an effective means of “weeding out” cases which clearly should not proceed to hearing (either because the claim is defective or because the respondent has no defence).    It would also help parties to be realistic about the likely outcome of their case.  Such an evaluation could, in some circumstances, be done as a paper based exercise but may in other cases require attendance of the parties before the evaluator who should have an inquisitorial role.   Further, for the early neutral evaluation to be effective, it would have to compulsory in certain cases and there would need to be an incentive for parties to engage in the process (eg disclosure of the evaluator’s decision to the Tribunal). 

4.8  Other issues that the consultation could explore include:

1. Which cases would go to an evaluator and who would make the decision?  (could referral be made by a Chairman looking at the content of the IT1 and IT3?) Should parties be allowed to request early neutral evaluation?

2. Who should act as an evaluator (Tribunal Chair/other legally qualified person)?

3.  At what stage would early neutral evaluation be appropriate (immediately following submission of IT3?  If the evaluator adopted an inquisitorial role, evaluation could be most effective at this early stage.

Arbitration

4.9  The current arbitration schemes offered by the LRA are not working.  This may be due, in part, to mistrust of the arbitration process but, the narrow focus of the current schemes also means that many cases do not qualify for arbitration.   Tribunal users have therefore not had an opportunity to assess the effectiveness of arbitration in our current system.

4.10  There are alternative models of arbitration and one option might be to review the arbitration model currently being used.  This would also require a re-assessment of the role of arbitration within the dispute resolution process generally. 

4.11  If the existing schemes were expanded to include other jurisdictions there may be better take up and this would allow for a proper assessment of the effectiveness of the schemes.  The current model of arbitration (if expanded) could potentially offer unrepresented parties the informal and speedy type of hearing that was originally envisaged by the Donovan Report.  To be effective, we believe that opting for arbitration should remain voluntary and that the arbitration decision should be a binding and final decision.

4.12  Issues that it may be worth exploring in the consultation include:

1. What would motivate a Tribunal user to opt for arbitration?

2. What jurisdictions would suit arbitration and what jurisdictions or types of disputes would be unsuitable?

Recommendation

4.13  We suggest that the consultation explore all the above forms of ADR with the purpose of identifying which models could then be run as pilot projects.

© Law Centre (NI) 2008