Lawyers swarm in as tribunals busier than ever before
23 March 2009
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Economic Theory
Economic Theory
25 March 2009
Government and Institutions
Unnoticed in the economic gloom accompanying the rising unemployment figures, last week saw the publication of the statistics of employment tribunal claims for 2007-2008. The figures are quite startling and show the increasingly worrying grip of the compensation culture in our workplaces.
The number of claims accepted by the tribunal system rose by over 40% on the previous year, to reach a total of 189,300. Many of those claiming redress cited more than one “jurisdiction” – the term for one of the 80 or more offences which tribunals can hear. For instance, an individual might claim racial and sexual discrimination and unfair dismissal – three separate jurisdictions. Last year the total number of separate alleged offences was 296,963.
The big expansion last year was in two areas – equal pay claims were up 18,000 to 62,706 (mainly in the public sector, where the requirement for pay audits and subsequent job evaluation has created costly and seemingly endless hassle), while Working Time Directive claims went up by 34,000 to 55,700. This year the Tribunals Service can expect to be even busier, as unfair dismissal claims always rise in recessions.
The expansion of cases reflects the increasingly complicated arena of employment relations in the UK, where new regulation seems incessant, often in a format which invites litigation – for example, rights to “request” extended parental leave or continuation of work after age 65, when refusals of these requests can be, and frequently are, challenged at tribunals. Loose drafting also leads to jurisdictions being extended beyond what Parliament intended or understood. For example, a large number of disability discrimination cases now invoke stress, which the House of Commons was told the legislation did not cover. And recently the Employment Equality (Religion and Belief) regulations – passed largely to reassure Muslims that their sensibilities would be recognised – have been interpreted to apply to a man who claims his strong “philosophical belief” in climate change led to his dismissal.
Another factor is the increasing involvement of unions and, especially, lawyers in promoting claims. When tribunals were first given the power to hear individual claims in the mid-1960s, it was emphasised that they were to be informal institutions, free of management/labour set pieces and, above all, free of lawyers. In fact the number of cases in which unions represented claimants has risen from 6,676 in 2005-6 to 29,136 last year as unions try to develop what are in effect class actions to pursue collective goals. In the same two years, lawyer representation rose from 67,442 to 117,565. Some lawyers are operating on a “no win, no fee” basis which can give them a large slice of any compensation won.
In 2002 the government introduced procedural changes which were intended to reduce the number of tribunal cases and encourage solutions within the workplace. These have manifestly failed as more and more employees take their cases into the tribunal system rather than seek internal solutions to their concerns.
There is clearly a need for more fundamental reform of employment law and the nature of the employment contract. In a recession when we need employers to be creating new jobs, we should be seeking ways to make this an attractive proposition. We need yet more tribunal cases like a hole in the head.
The number of claims accepted by the tribunal system rose by over 40% on the previous year, to reach a total of 189,300. Many of those claiming redress cited more than one “jurisdiction” – the term for one of the 80 or more offences which tribunals can hear. For instance, an individual might claim racial and sexual discrimination and unfair dismissal – three separate jurisdictions. Last year the total number of separate alleged offences was 296,963.
The big expansion last year was in two areas – equal pay claims were up 18,000 to 62,706 (mainly in the public sector, where the requirement for pay audits and subsequent job evaluation has created costly and seemingly endless hassle), while Working Time Directive claims went up by 34,000 to 55,700. This year the Tribunals Service can expect to be even busier, as unfair dismissal claims always rise in recessions.
The expansion of cases reflects the increasingly complicated arena of employment relations in the UK, where new regulation seems incessant, often in a format which invites litigation – for example, rights to “request” extended parental leave or continuation of work after age 65, when refusals of these requests can be, and frequently are, challenged at tribunals. Loose drafting also leads to jurisdictions being extended beyond what Parliament intended or understood. For example, a large number of disability discrimination cases now invoke stress, which the House of Commons was told the legislation did not cover. And recently the Employment Equality (Religion and Belief) regulations – passed largely to reassure Muslims that their sensibilities would be recognised – have been interpreted to apply to a man who claims his strong “philosophical belief” in climate change led to his dismissal.
Another factor is the increasing involvement of unions and, especially, lawyers in promoting claims. When tribunals were first given the power to hear individual claims in the mid-1960s, it was emphasised that they were to be informal institutions, free of management/labour set pieces and, above all, free of lawyers. In fact the number of cases in which unions represented claimants has risen from 6,676 in 2005-6 to 29,136 last year as unions try to develop what are in effect class actions to pursue collective goals. In the same two years, lawyer representation rose from 67,442 to 117,565. Some lawyers are operating on a “no win, no fee” basis which can give them a large slice of any compensation won.
In 2002 the government introduced procedural changes which were intended to reduce the number of tribunal cases and encourage solutions within the workplace. These have manifestly failed as more and more employees take their cases into the tribunal system rather than seek internal solutions to their concerns.
There is clearly a need for more fundamental reform of employment law and the nature of the employment contract. In a recession when we need employers to be creating new jobs, we should be seeking ways to make this an attractive proposition. We need yet more tribunal cases like a hole in the head.
4 thoughts on “Lawyers swarm in as tribunals busier than ever before”
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While I generally agree with the sentiment of this article, we should not be too quick to dismiss tribunals.
There are too many commercial organisations in which the management, instead of acting in the interests of the owners of the business, operate in a self-serving fashion. They try to clear out any dissenting voices. Put simply, many are dishonest and incompetent. Tribunals can serve to expose them – and owners of businesses should look very clearly at tribunal payouts (or at payouts made to avoid tribunal cases) when assessing the management.
While I generally agree with the sentiment of this article, we should not be too quick to dismiss tribunals.
There are too many commercial organisations in which the management, instead of acting in the interests of the owners of the business, operate in a self-serving fashion. They try to clear out any dissenting voices. Put simply, many are dishonest and incompetent. Tribunals can serve to expose them – and owners of businesses should look very clearly at tribunal payouts (or at payouts made to avoid tribunal cases) when assessing the management.
The increase in the number of tribunals is very worrying news. Combined with a high minimum wage, large benefit increases and further regulatory burdens on employers, this suggests that job creation will be severely hampered during the recession. Accordingly unemployment will be far higher than it would have been under more liberal conditions.
The increase in the number of tribunals is very worrying news. Combined with a high minimum wage, large benefit increases and further regulatory burdens on employers, this suggests that job creation will be severely hampered during the recession. Accordingly unemployment will be far higher than it would have been under more liberal conditions.