Employment Bill [HL]

With respect to the noble Lord who moved the amendment, two things must be made clear. I feel like saying, ““Hands up””, as my friend Tony Benn once said. I would say, ““Hands up those who know the terms and history of the Conciliation Act 1896””. I suspect that not even the noble Lord who moved the amendment would raise his hand to that. I wish to make two points. First, discussion about Clause 5 and things such as this amendment are understandable in the sense that a settlement before litigation is always desirable. In financial services and commercial law, of which the noble Lord has great experience, no doubt mediation is a suitable and desirable method, but that is not true of employment relations and I shall explain why. Since the imaginative passage of the Conciliation Act 1896 over 100 years ago, the Board of Trade—later the Ministry of Labour—at the party’s request was given statutory power to appoint conciliators in its discretion in respect of any difference between the parties ““existing or apprehended””. That is a very important phrase which is still in the legislation today. Under the 1896 Act, the ministry built up an army of industrial relations officers—the IROs—whose work was explained in many publications. They had no compulsory powers, just like today, but they had power to respond to the parties with the appointment of conciliators. That is why they are given notice of claims in employment tribunals today, as they have been for a large part of the 100-year history, which is at stake in this amendment. The conciliators take steps to explain the positions of the parties without promoting a solution as such but they try to make clear the facts and differences between the parties. Accounts of that experience over the 100 years appear in various commentaries, including one based especially on the Ministry of Labour’s own evidence to the 1968 Donovan commission, the book called Employment Grievances and Disputes Procedures, published in 1969 by the University of California, the authors of which are myself and Paul Davies. ACAS has had perfectly capable mediators, but it prefers to use the method of conciliation because of its experience over a century in which the mechanism has been adapted and varied. If your Lordships look at the history you will find many new steps were taken to improve conciliation, but ACAS by the 1960s was quite clear that mediation proposing solutions to the parties was not the way ahead. By the 1970s, for many reasons, including the difficulties encountered by the impact of incomes policies of both Labour and Conservative Governments, it was decided to transfer the conciliation and the arbitration functions to ACAS, which is founded as an independent service and not subject to any Government’s or Minister’s orders or directions. I must declare an interest as having given advice and contributed to the form and substance of the 1974 and 1975 legislation. The Minister has kindly circulated the latest draft of the invaluable ACAS revised code of practice on disputes procedures, and in his covering letter he rightly stressed the independence of ACAS. But ACAS did not spring fully armed from the heavens, like Athena from the head of Zeus. From the outset its methods have reflected the experience, lessons and modifications adopted in the layers of gradual change and experience since 1896. That experience suggested that voluntary conciliation, clarifying the facts and measuring the distance between the parties was desirable. That great conciliator of the early part of the century, Lord Askwith, wrote in his book of 1920 on conciliation that, for conciliators, "““the main point is to get the parties together””," with, "““patience, as the first, second and third qualification””." A mediator no doubt tries his best but, in making proposals for solutions, it was found by ACAS and, before it, by the industrial relations officers, that mediation had drawbacks which conciliation did not. As the leading textbook puts it: "““Mediation differs from conciliation in that a mediator may make positive recommendations””." The IROs and today’s ACAS conciliators have found in common that conciliation is the better technique. Even the new ACAS scheme, which is a very special scheme made by order in May 2001 under the 1998 Act to reduce proceedings to a bare minimum without any legal activity, has not been adopted by more than a mere handful of the tens of thousands of the cases known to ACAS in employment disputes. ACAS conciliation is the method which experience shows has triumphed; it should not be lightly tampered with. In 2006-07, the record shows that ACAS arranged settlements in individual employment disputes in 42,805 out of 176,000, and many ACAS interventions also helped to promote a further 54,271 settlements by means of withdrawal of the claim. The Minister said at Second Reading that, "““around 75 per cent of claims made to an employment tribunal are resolved before reaching a hearing—a substantial portion with the involvement of ACAS””.—[Official Report, 7/1/08; col. 637.]" Your Lordships should take note of that quotation before taking any step to interfere by statute with ACAS’s methods. That leads me to my second point, a quote from the Minister when he claimed a 75 per cent settlement rate with the help of ACAS. He went on: "““But a significant proportion of cases that reach a tribunal hearing really could be resolved beforehand between the parties, saving cost and time for employer and employee alike””.—[Official Report, 7/1/08; col. 637.]" The Minister said not that a further significant proportion ““might be resolved””, but that it ““could be resolved””. If I had said that, I would want evidence for that fact; it was stated as a fact, not an estimate or forward dream. There is nothing either in the Gibbons report—his experience is in National Health Service mediation, as different from employment as financial services—or in any other research of which I know to support this statement of fact being made with confidence. I was going to comment on the Gibbons report. I simply reduce it to the same stuff that is in the Government’s report. Sections 4 and 5 advance anecdotal evidence, such as the report’s authors having ““heard it said””, or ““it has been mentioned””, without telling us who by or what constituency they represent. It is plastered all over the last sections of the Gibbons report, which also says that, "““the Government should review existing powers to see whether they are adequate and whether extending them would be effective ""in deterring those cases that have no prospect of success and parties whose intent or action is to waste time and drain valuable tribunal resources””." That is a statement of fact. Where is the evidence for it? Where is the survey showing that those who do not settle with ACAS’s help include those whose ambition is merely to waste time? I know of no such evidence, and advance to your Lordships the contention that there is no such evidence. The intent to waste time is a serious charge. The tribunal rules already give tribunals or their chairmen power to impose a forfeitable deposit on a claim unlikely to succeed, and the power to strike out claims that are vexatious or unreasonable. Regulations state that, "““a chairman or tribunal may make a judgment or order … (b) striking out or amending all or part of any claim or response on the grounds that it is scandalous, vexatious or has no reasonable prospect of success””." Tribunals strike out very few claims, but they do so when they think that they have no reasonable basis. Sub-paragraph (c) reads, "““striking out any claim or response ... on the grounds that the manner in which the proceedings have been conducted by or on behalf of the claimant or the respondent ... has been scandalous, unreasonable or vexatious””." The very small number of cases that has been struck out on those grounds is of great importance. Of course we all know, or have heard of, an obsessive claimant who just will not give up. Anyone who has had anything to do with the tribunals knows stories of that kind. A special survey by the tribunal service in 1998 found that even if unreasonable claims were defined as claims in which the first legal advice was that the claimant was on to a loser, only a maximum of 4 per cent of claims could be said to be unreasonable. Commentators, such as the main textbook by Professors Deakin and Morris, point out that many of the leading cases were claims in which the lawyer in the first response said that the case could not succeed, but it did. My belief and contention is that there is no objective evidence that that 4 per cent maximum figure is being greatly exceeded or, indeed, exceeded at all, even on that wide and doubtful definition of an unreasonable case. Can the Minister say today whether there is further objective evidence of this of which I am unaware—or he could write or tell me on Report—that suggests that a substantial proportion of claims that get to the tribunal could be solved by better conciliation? To say that is a criticism of ACAS and the 100 years’ experience that it enshrines. The argument that settlements have been inadequate has nothing to support it, nor is there is evidence that overall the tribunals are too restrained in their exercise of the power to strike out. Until proved by further objective evidence, my submission is that public policy in relation to the matters put forward in Clause 5 and in the noble Lord’s amendment should not be guided by such anecdotal beliefs. The ACAS procedures should be left without statutory interruption and amendment.