Tribunals on Trial

Are employment tribunals a bastion against the erosion of workplace rights, or a bureaucratic barrier to job creation? Oliver Bennett reports on a system facing reform.

by Oliver Bennett
Last Updated: 09 Oct 2013

Victory House, the central London Tribunals Office, is the Old Bailey of employment tribunal centres. Here, on dusty Kingsway, many leave with faces drawn, while others celebrate success in one of the street's faceless pubs. In search of the spirit of the employment tribunal (ET), I walk into a typical civic building of the last decade: heel-proof blue carpet, blond doors, floating ceilings, water-coolers and no frills.

I check in at the front desk and am ushered into a room where the day's tribunal files are laid out on a table near a desk staffed by two women.

I explain that I want to sit in on an ET - as with law courts, these are public events - and I'm offered some choices. 'We've got a three-day discrimination case starting today, or a two-day disability in room 14,' trills one of the women, as if reading from a menu. On the wall, the day's case list is pinned up, assigned from 4pm the previous day. It uses arcane codes: UDL is an unfair dismissal, WTR a failure to give proper breaks, SXD is a sex discrimination case. There's a juicy-looking UDL from J Adhal against the Metropolitan Police, but it's pegged to last four days, so I plump for a two-day SXD/UDL mix starting in 10 minutes in room 11, second floor.

Upstairs, there are two dreary waiting rooms: one for claimants, one for respondents. Each contains a gaggle of people in sober suits, smelling of fear. I feel I'm invading their space, so wait outside room 11 and meet Jeanette, a charming woman who's here to see how the system works. She's about to take on an SXD against her previous employer, a local authority. 'I was sacked when I was pregnant,' she says. 'Disgraceful.'

After 10 minutes, the various parties come through - claimant and brief, respondent and brief, Judge David Pearl and two sidekicks and three other unidentified parties, one an old gent with a cane. The tense atmosphere is not helped by Judge Pearl, who seems testy. 'The case is unfair dismissal, as I understand it,' he says, sitting at the beech desk with five shield-like motifs on it. On the front table, there's a clip full of laminated oaths: yellow Bible, green Koran, orange for Hindu, white for United Brethren of Moravians ... It's informal, neutral, the people's court.

There's room for about 15 people but only three attend: myself, Jeanette and a chap in a dark suit who turns out to be a trainee lawyer. Battle commences. It's between a Polish woman, Agata Lampit, and Central Park Hotel, a group that has three hotels in London and is represented by its director of sales and marketing, an Irishman called Collins.

Judge Pearl has a 'list of issues' and gives Collins a sheet. The Central Park Hotel seems to confuse him - and us. Explaining how the three hotels fit in seems to take about an hour. I'm struggling to stay awake.

The issue seems to be that Lampit was sacked after pregnancy, but it takes an awfully long time to get to the heart of the matter. And the respondents aren't helping. Collins doesn't seem to know how many people are employed at the three hotels. He uses baffling shoptalk: CRS ('central reservations'), the 'extranets', the bookings done via agents like lastminute.com over the internet. Lampit, we learn, was employed in 2007 after an introduction by someone called Charlene and took a whole five hours to do the extranets and, following her sacking, she was replaced by Dasha, who was more competent.

Throughout, Lampit, an ash blond in a grey suit, looks impassive. Dasha was preferred: the point is, why? We have a tea break, and 15 minutes later we're back in room 11. Judge Pearl calls on the hotel's owner and up gets the old gent with a cane. He swears the oath over the Koran, mumbles a few words, and the flannel about extranets continues. We stop for lunch.

It has been a baffling, boring morning, at odds with the swishy super-cases reported in the Daily Mail, wherein high-flying City blondes trouser hundreds of thousands in explosive ETs. But this is the tedious coalface of a system that is shortly to be overhauled - if current proposals are taken up.

The Government wants to reduce the number of employment tribunal claims, and has suggested that employees should be able to claim only after working for two years rather than one year; that internal procedures and Acas mediation should help weed out unworthy cases; that cases should be speeded up; and that there might be a charge, perhaps £500, to bring a case. The aim is to cut down the expense of the system. The plans are up for consultation until 20 April.

Certainly, the number of employment tribunals has risen, with 15% added last year alone. It's ongoing. According to find-a-solicitor service Contact Law, there was a 43% increase in employment-related legal enquiries in February compared with the same month last year.

There's much press interest in employment tribunals, perhaps because they represent a David-versus-Goliath narrative - the 'Silkwood' factor, if you will. But there's also a strong suggestion of another familiar story, 'money for old rope', which combines with 'political correctness gone mad' to create a toxic fascination.

Take the case of Bushra Noah, who claimed against Sarah Desrosiers of Wedge hairdressers in King's Cross after being turned down for the job in 2008 on the grounds that she wore a hijab that covered her hair. The upshot was £4,000 for 'injury to feelings' and the case was reported internationally. I call Desrosiers. 'I'm sorry,' she says. 'I can't go back there. Horrible.'

Sex discrimination has its own prurient wake, and businessman Tim Watts, the flamboyant chairman of the Pertemps Group, gets back to me about his recent tribunal ordeal, which ended in March. Watts fought Debbie Smith, once a managing director of one of Pertemps' 126 subsidiaries, who claimed sex discrimination, victimisation and sexual harassment against him. 'There was never a scintilla of truth in it from the start,' alleges Watts. 'It was vexatious, malicious, ridiculous. I only met her once or twice. The lady's testimony was incredible.'

The court heard that Smith had been made redundant after an underperforming stint, and had been led to believe that she was able to appeal. 'It lasted six months and would have cost the taxpayer thousands of pounds,' said Watts. For her part, Mrs Smith had accused Watts of calling her 'a sexy nurse' and making reference to a colleague's breasts.

Watts thinks the system has to change, and that it shouldn't be led by no-win, no-fee companies. 'We employ 30,000 people and we know employment is not perfect. But we need a new system.' He sees short, sharp mediation as the answer - an hour of questions leading to a 'sensible' judgement as to whether a case should continue. Watts - who is preparing a counterclaim - says employers should watch out for potential litigants.

So have employment tribunals become a bit of a gravy train? Says Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development: 'I do think there is a compensation culture, resulting in speculative claims. But I don't think it's a big aspect or a scam. It happens on the margins.' Nevertheless, it puts employers on the back foot and has created a divisive working culture, making them particularly fearful of damaging 'discrim' cases.

Employment law firm Peninsula receives more than 2,000 calls a day from people hoping to start claims. 'There has been a vast increase and it's exhausting,' says Alan Price, managing director of Peninsula. 'We've seen a situation develop where firms faced with a suit will give £500 or £1,000 just to walk away. Of course people have exploited it.'

A basic liability suit is expected to reach about £12,000, a UDL can gain up to £65,400, and discrimination cases are uncapped. 'Those big-money claims that you see in the Daily Mail do exist,' says Price. 'Some get really big amounts and there's no harm in putting in a claim.'

It has inevitably led to a situation where employees feel they might as well claim. 'Well, you would, wouldn't you?' says Emmott. 'In the recession, people feel they've got nothing to lose. If the job has gone anyway, then they might as well go for it.'

Still, there's a cost and, as Price says, the tribunal system is not only expensive but gets in the way of the Coalition's enterprise ethos. 'The Government wants to make the UK the best place to start and grow a business, and tribunals damage that message,' he says.

As the British Chambers of Commerce (BCC) points out, the average cost for an employer to defend itself at tribunal is £8,500, and the average settlement is £5,400.

There has been a knock-on effect on the stability of employment, with bosses shying away from offering full contracts. 'I've seen employers have a reminder set for 10 months, to get rid of (employees) before the critical year (is up),' says Price.

Chloe Harrold of employment law specialists Loch Associates believes tribunals have actively driven the fixed-term contract culture. 'There's a great frustration that the system appears to be weighted towards the employed,' she says. 'There's a real sense that it encourages people to try it on and fails to recognise that it costs employers a lot of time wrapped up in correspondence and a lot of money to defend these actions.'

She knows of firms that have gone bust as a result, and agrees with the BCC that the tribunal system is in 'dire need of reform'. As BCC policy director Dr Adam Marshall puts it: 'Tribunals are too slow and are overwhelmingly weighted in favour of the employee. The system creates risk and uncertainty and, ultimately, it's a barrier to job-creation.'

Yet there remains a feeling, strong in the unions, that tribunals represent otherwise disenfranchised workers, and that the ET is a court for ordinary people. Nick Cattrall, an employment law adviser with Etas Direct, resists the idea that a tribunal feeding frenzy has emerged. 'Yes, tribunals have increased in number,' he says. 'But there are good reasons for that. Firstly, 20 years ago there was a trades union membership two-thirds bigger than now. If there was a dispute, you'd go to the shop steward. Now people go to tribunals instead. And whatever you might think from the papers, most of the awards are small - between £5,000 and £8,000 is typical. Most of these people aren't the ones in the Mail. They're parking attendants, security guards. And they tell me that if they had to pay £500, they wouldn't take a case. That's wrong.'

I go back to Room 11 to pick up on the latest from Lampit versus Central Park Hotel - and no one turns up. They must have come to an arrangement during the lunch break. Perhaps this is the 'speeding up' that the Government wants. Either way, Lampit's case has cost us all.

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