Archive for the 'Employment Tribunal' Category

Contingency fees in the ET to be abolished?

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on June 27, 2008
in Employment Tribunal and Lawyers
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No-one’s daring to say so, but a press release by the Ministry of Justice is reviewing the whole caboodle. Some solicitors are getting worried.

A contingency fee is where the solicitor’s fee is a percentage of what he recovers for the client. In my experience it’s pitched between 33% and 50%. Recover £30,000 for your unfair dismissal, write out a cheque for £15,000-odd to your solicitor.

They should not be confused with conditional fees, where the solicitor charges his normal hourly rate (plus an uplift) if you win, and nothing if you lose.

Contingency fees only really exist in employment tribunals, and what’s more they only exist at all by accident (there are some other times they crop up, like CICA claims). All work that solicitors do is considered either contentious or non-contentious. If it’s in court, it’s contentious, if it’s not, it isn’t. There are long-standing and strict rules that contingency fees are not allowed in contentious proceedings. You cannot say to a client that you’ll pursue their road traffic accident in the county court for a third of whatever they get. Oddly however employment tribunal claims are not specified as contentious. This means that they are non-contentious, and the rule does not apply. The idea that employment tribunals are non-contentious, when they have pleadings, disclosure, statements, orders, judges, judgments, and claims running into the millions is just plain weird. I’ve never seen any suggestion that their exclusion from the definition of contentious is anything other than an anomaly. That’s the word the Bar Council use anyway, at the same time as forbidding barristers from taking work on that basis.

There are arguments for and against. Conditional fees are a bit useless for most tribunal claims as there are no routine costs orders. Costs paid would still therefore come out of awards rather than being paid separately by the loser. The obvious worry for the Claimant is that they win £5,000 and pay out the same or more to their solicitor. This hasn’t been helped by the increasing technicality of employment law and procedure, meaning the tribunal (despite the best efforts of the judges) isn’t the place for the litigant in person that it would like to be. Good firms, like the one I linked to above, are able to help a lot more claimants access the tribunal than they could otherwise.

The attraction of paying a percentage is obvious, you’re guaranteed not to be left out of pocket at the end. But the conflict of interests is strong, and takes a very professional solicitor to overcome. This is because the solicitor effectively funds any work that’s undertaken. Let’s say the claim gets as far as the ET1, and an offer of £10,000 to settle is put in by the employer. If the client accepts it, then the solicitor has made a very easy £3,333 (we’ll assume a one third fee). But the client holds out, and realistically states that he might well be awarded twice that sum. No offer above the £10,000 is forthcoming, and the client does indeed win £20,000 at a full hearing. The solicitors are thus paid £6,666. But they’ve had to do the ET1, all the disclosure, negotiation, maybe make or respond to the odd interim application or attend a CMD or PHR, draft witness statements, and provide representation for the hearing itself. Even simple unfair dismissal cases can be listed for two days. The profit element of the £6,666 thus starts to look very low compared to the £3,333 for just meeting the client, banging out a couple of letters and an ET1.

So whereas in conditional fees there’s a commercial pressure on the solicitor to advise settlement to avoid the risk of losing the case and not being paid at all, in contingency cases there’s the second pressure of settling early before significant work has been done.

I’ve been unfair using the word solicitor - almost all of whom can be trusted to give professional and realistic advice on settlement that is in their clients’ best interest. But fee mechanisms mustn’t just be fair in practice, they must also be seen to be fair. There is also a huge rise in non-solicitor companies offering employment tribunal representation; indeed it was they who opened the contingency fee floodgates. These companies are least now subject to some form of regulation, but the clear conflict of interest present in a contingency fee arrangement leaves a very unsavoury taste in the mouth.

Answers as to what should replace contingency fees on a postcard please…

EAT Judgments

Published
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on June 23, 2008
in Employment Tribunal and Lawyers
. 2 Comments

I’m delighted that I’ve at last spent 30 seconds stealing being inspired by Nick Holmes‘ use of a Yahoo Pipe to provide a good rss feed from bailii. The fruits of my labours are available on the side bar, or here as a feed you can use yourself.

Strike out

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on May 31, 2008
in Discrimination and Employment Tribunal
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Croke v Leeds City Council [2008] UKEAT 0512_07_2905 is a good example of a Tribunal’s decision to strike out (without hearing evidence) a discrimination case which had no reasonable prospect of success being upheld. A strike out is a draconian step for any tribunal to take, as it effectively prevents the Claimant having a full hearing of his complaint. Here the Employment Judge was clear that the facts as pleaded by the Claimant would not engage the laws which he claims to enforce. As a result he didn’t even hear formal evidence from the Claimant, although he did engage in a “long discussion” with him to see if he could unearth even a hint of a possible claim. It’s good to see the EAT upholding both the pragmatic conduct of the hearing, and the decision itself, as in a costs free environment such as the ET meritless claims are still a huge burden on the Respondent.

Acas consults on draft Code of Practice on discipline and grievance

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on May 22, 2008
in Disciplinary, Dispute Resolution regulations, Employment Tribunal, Grievance and Unfair Dismissal
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The Code is intended to come into force in April 2009 at the same time as the abolition of the hated statutory Dispute Resolution procedures, and is currently open for consultation. Acas have taken the tack of having two documents - a Code of Practice, and a document containing wider guidance. The consultation document notes that many have called for a shorter, simpler code, and this indeed is what they’ve delivered.  By way of reminder, failure to follow the Code of Practice will not in itself be determinative of a legal issue such as fairness, as is the current case with the statutory procedures. Instead, it will be a factor to which the tribunal can have regard, and non-compliance will also empower the tribunal to adjust any compensation by up to 25%.

This seems sensible - it means the code of practice rewards compliance and punishes non-compliance, but isn’t so absolute in its effect such as to result in injustice.

I’m pretty stunned by the simplicity of the document, which can be found here. Those used to Acas guidance will have been checking the amount of paper in the printer, but no need here. The full document, including the consultation what nots, is a mere 14 pages. The steps that should be followed are fairly uncontroversial, but have a look for yourself. One paragraph that did catch my eye was this:

23. Some acts, termed gross misconduct, are so serious that they may call for summary dismissal for a first offence.

What this, with its surrounding paragraphs, says is that dismissal on the first offence can only be for gross misconduct. Whilst that will be the case 95% of the time, I’m not sure that as a statement it’s correct in law.

Unfair Dismissal - Burden of Proof

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on April 21, 2008
in Discrimination, Employment Tribunal, Solicitors and Unfair Dismissal
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My earlier assurances that my blogging wouldn’t be interrupted by work have been shown to be completely hollow - over two weeks have passed since my last post.

And it’s not even as if there’s been nothing to report. Favourite case recently must be Kuzel v Roche Products Ltd which talks of the burden of proof in Unfair Dismissal cases. Generally in law the person advancing a case, eg you saying that your neighbour cut down your hedge, the state saying you murdered him in retaliation, has the burden of proving the allegation. Not so in unfair dismissal. S.98(1) ERA 1996 moves the burden on to the employer. So if I say “you sacked me for an absolutely bloody stupid reason” then my employer doesn’t have to disprove my version of events to oppose the claim, they have to come up with their own valid reason for my dismissal and prove that. The reasons I advanced don’t really come into it.

In this case however the employee had advanced whistleblowing (protected disclosure) as the reason for her dismissal. It’s obvious why she would make sure she did this if she thought she might have a shout - whistleblowing claims aren’t subject to the financial limits of normal unfair dismissal and include an award for injury to feelings. The employer ran some taking-the-piss SOSR defence about the relationship having broken down. The tribunal stuck two fingers up at everyone by finding that dismissal was for a third reason, against the pleadings of both parties. The consequence for the simple unfair dismissal claim is obvious - it succeeds as the potentially fair reason advanced by the employer was not found to be proved. The odd consequence is for the whistleblowing claim - where does the burden of proof lie? Traditionally it should be at the employee’s door, it’s her case and her allegations. The statute is largely silent on the issue, the reversal of the burden of proof only seeming to explicitly apply to the reason actually advanced by the employer to be the reason for the dismissal. Well for once we’ve some useful guidance, produced by the EAT and approved by the Court of Appeal:

  1. Has the employee shown that there is a real issue as to whether the reason put forward by the respondent was not the true reason?
  2. If so, has the employer proved his reason for dismissal? Failure to do so will render the dismissal unfair, and then coupled with a primia facie case from the employer will entitle the tribuanl to infer that the employee’s stated reasons are correct.
  3. Has the employer disproved the reasons advanced by the employee? Even if the employer has failed to prove it’s own reason for the dismissal it may still have disproved that of the employee.
  4. If not, dismissal is for the reasons stated by the employee. It is not however, at any stagae, for the employee to prove her reason.

I’ve mucked around with the above to apply generally.

The Court of Appeal seem to have taken the line that this case is one for minority interest, stating that it shows how worked up lawyers can get about something like the burden of proof. I agree, but not with their observation that this sort of case will be rare. Protected disclosures are often presented in conjunction with a general claim for unfair dismissal, and its similarity to a discrimination claim may well mean that the facts coincide with the parties having fallen out generally. The unfair dismissal might well then often succeed without the whistleblowing. The same can be said about maternity-related dismissals.

 

Law in the 21st Century

Published
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on March 26, 2008
in Employment Tribunal, Lawyers, Rambling and Solicitors
. 2 Comments

The Law21 blog, and this post in particular, should be compulsory reading for any member of the British legal profession. The focus on new provision of legal services tends to concentrate on work for individuals - divorces, probate, and so on. In employment law circles however the change is already happening. First Assist, Peninsula, Croner Consulting, EEF and the rest are hardly household names but between them conduct a huge part of Respondents’ litigation in the tribunals.

Many employers simply want to pay an annual premium and be insured against any claims they receive. Any large employer, even if it is well behaved, will receive a claim one day,  and fewer and fewer of these are farmed out to traditional law firms and counsel. If you are a commercial company who has sold an insurance policy then it makes much more financial sense to hire staff yourselves to conduct litigation and advocacy than to farm it out. Why? Because you retain the profit margin. Without any SRA or Bar Council regulation you can also be ultra-competitive in your hourly rates which means you achieve a better loss ratio for the insurance company.

Counsel still have their place for complex cases, or for where you simply must have a bum sat on a tribunal seat somewhere far away at very short notice, but as the Law21 blog notes: traditional law firms must forge alliances with the larger providers if they are to retain the work.

Employment is ahead of the game as tribunals don’t require a special right of audience, and (insured) work can therefore be undertaken by companies without any form of regulation at all. Once Alternative Business Structures and “soft-touch” regulation comes then all manner of commercial legal areas will go the same way, and it’ll be sink or swim for law firms and lawyers. Being legally qualified will be no guarantee of a place in the new order.

Crystal Ball

Published
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on January 19, 2008
in Discrimination, Employment Tribunal and Lawyers
. 2 Comments

Blogger Head of Legal, who like me must be sad enough to browse case reports that fall outside his area of expertise, comments on the odd result in Richmond Adult Community College v McDougall [2008] EWCA Civ 4. The actual point of construction in this case is reasonable - it confirms that in deciding whether or not someone can make a discrimination claim on the grounds of their disability, the tribunal can only look at the information available to their employer at the time he chose to dismiss. This mirrors Unfair Dismissal caselaw - looking at the decision in the light of subsequent events isn’t permissible. IMHO this is the only way to meet the purpose of the law in requiring employers to make reasonable decisions. Asking them to gaze into a crystal ball doesn’t help anyone.

The actual result of the case is more disturbing. A lady, who had initially been offered employment, was then turned down because her history of psychiatric illness was discovered. Fair enough, you might think, but her illness was three years behind her, and her psychiatrist had commented that she was “fully able to return to work and [there were] no concerns about her mental health relating to this”. 

She brought a claim under the Disability Discrimination Act. This may seem logical - disability was the main reason for her dismissal. Non-lawyers will however have their views about us vindicated by the fact that the employer, rather than attempting to justify its decision, used the argument that her case actually rested on the fact that she wasn’t disabled. In those circumstances, since the DDA only protects the disabled, her claim must fail. This is a typical “Yes we’re complete shits, but the law allows us to be” attitude, and one that won through.

Note the difference with other discrimination legislation - that doesn’t create a protected class of person, it simply sets out the grounds on which you cannot discriminate. The nature of the complainant is irrelevant; sack a man because he’s gay and it doesn’t matter a jot whether or not he is. If you use the example of poor old Graeme Le Saux, called gay by his fellow footballers simply because he was nifty at the Guardian crossword; his treatment was on the grounds of sexuality, not because of his sexuality.

Another result of this different approach is that non-disabled workers have no protection at all - if someone else applying for the same job as you has worse qualifications, but is hired because his wheelchair will look good in their recruitment brochures, you’ve no claim whatsoever.

Employment Judges

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on January 16, 2008
in Disciplinary, Dispute Resolution regulations, Employment Tribunal and Rambling
. 0 Comments

Employment tribunal chairmen are now renamed Employment Judges - a change which highlights the change in philosophy and attitude in the Tribunal, which seems to completely contrast with the changes occuring in the ‘normal’ courts system.

The tribunal is supposed to be informal, its procedures pragmatic, and its language accessible. So much so, in fact, that in normal circumstances you can’t get legal aid for an ET hearing no matter what your means. Yet look at the developments:

  • They’re now chaired by Judges;
  • In 2004 the existing 21 Tribunal Rules exploded to 61;
  • We have CMDs, PHRs, strike-outs, pre-acceptance procedures;
  • More costs orders against unreasonable litigants;
  • The utterly ridiculous ET1 forms:

Comment has been made in the past on the wording of the standard form ET1, which the Government insists all litigants must now complete in order to bring a claim before the Employment Tribunal. …those who design these forms may care to undertake basic instruction in employment law. - HHJ Peter Clark,  Ellis v Ministry of Defence UKEAT/0034/07

  • …not to mention the impossibility in the first year or two of submitting the blasted things without having to resort to filling them in by hand;
  • And let us not forget the convoluted and spectacular failure of the Dispute Resolution regulations, taking grievances - which had on occasion solved the problem - and transforming them into a legalistic over-technical minefield, together with obliterating the chance of anyone approaching them constructively.

So would we say the Tribunals are becoming more cuddly? Or less cuddly? A cynical view is that this sort of system leads to less hearings at the Tribunal, and thus less money spent, as one side or the other wins or loses on a technicality long before the Tribunal ever gets a chance to fully assess the merits of the case - or simply can’t face the attrition of yet another meeting. An even more cynical view is that the slow walk to enforced Acas-controlled or accredited mediation has even more risk attached of bumping up the legal bills.

Annual Limits Review

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on January 14, 2008
in Discrimination, Employment Tribunal, Redundancy, Remedies and Unfair Dismissal
. 0 Comments

Time for the annual review of financial limits. The two biggies:

  • The cap on a week’s pay when calculating redundancy payments (or the basic award for unfair dismissal) goes up to £330;
  • The maximum compensatory award for unfair dismissal is raised to £63,000.

I’m really not sure if the latter should be retained, especially as the corresponding award in discrimination cases is unlimited. If Alf is sacked after thirty years’ graft for sneezing on the MD’s sandwiches, why is he more restricted in his recovery than when Abdul is sacked for his religion?

The other changes are:

  • Unfair dismissal minimum awards for certain health & safety, sunday working, Working Time Regs, pension trustee, or certain trade union reasons rises to £4,400;
  • … and wrongful expulsion from a trade union bags you a minimum award of £6,900.

All of this applies to dismissals on and after 1st February 2008. The full list of changes can be found here.

Protective Awards

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on January 13, 2008
in Discrimination, Employment Tribunal, Redundancy, Remedies and Unfair Dismissal
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Consultation, consultation, consultation. The worst crimes imaginable can nip under the radar if you only sit your employees down and talk about how terribly dreadful the situation is, but needs must, and what can we do to make the blow easier? Compulsory collective consultation in redundancy situations involving 20 or more job losses has been around for over thirty years, but we still see new developments.

If you, a company, are contemplating making 20+ redundancies at one establishment within ninety days, you have to spend at least 30 days in consultation prior to the first dismissal. If it’s 100+ redundancies, it’s 90 days. Fail to do this, and your employees can apply to the tribunal for a “protective award”. I personally have never understood the term - it’s a fine for non-compliance, nothing less. A protective award = 90 days’ pay. So, let’s say you’re making 25-odd employees redundant, which indicates in itself you haven’t bags of cash lying around, if you don’t give ‘em 30 days’ worth of consultation (no matter how little effect it might have on the final result) then you cop for 90 days’ pay to each of them. What’s that? 90 days? But we were only supposed to consult for 30! Tough shit. It’s a fine. You should have done it properly. This idea, following Susie Radin in 2004 which finally clarified the award as punitive, has been backed up by the EAT. This particular case has been notified all over the employment news-o-sphere, but I suspect it’s simply the first cock-up to be appealed rather than any shift in practice for most tribunals.