Demise of the claim?

Employers have exaggerated the threats of the growth in employment tribunal
applications.  And in any case, they are
set to fall, writes Stephen Overell

We live in bland times. Tony Benn’s diary of December 1978 recalls an era
when employment had some zip about it. With oil tanker drivers at Esso,Texaco,
BP, Mobil and Shell holding the country to ransom, the Cabinet was preparing to
call a state of emergency and deploy the Army.

"The instructors would begin training drivers on Boxing Day; on 29
December we would go to Sandringham for the Privy Council to declare a state of
emergency; the next two days we would requisition 4,000 tankers; on 3 January
the strike would begin and we would recall Parliament; on 5 January Parliament
would be asked to approve the state of emergency and by then we would have
about 15 per cent of our normal petrol supplies."1 Apparently, the
atmosphere in Cabinet was "very jolly".

From the alien perspective of the present day, all softly-softly consensus
and social partnership, it does sound strangely relaxed. The high water mark of
conflict in British workplaces was reached in 1979 with some 29.4 million days
lost to industrial disputes – no mean achievement considering there were only
23 million workers.

Not that anyone would like to go back to all that – give or take the odd
anarcho-syndicalist or two. But the late 1970s forms an ageless reminder of how
sleepy and contented employment relations now are, and how cowed and amenable
workers and their representatives now seem. No wonder there are no industrial
correspondents any more – no strikes, no story.

Of course, employers would not see it this way. The 1990s witnessed plenty
of conflict. Thanks to a cocktail of policy initiatives, legal amendments,
changes in social attitudes and structural alterations in the labour market,
collective industrial action may have been virtually anathematised, but
individual rights has become the new battleground. The number of applications
to employment tribunals rose threefold during the 1990s.

In 2001, just 479,000 days were lost to strikes, while the highest ever
number of complaints about violations of individual rights reached the
overworked desks of tribunal chairmen – some 130,408 in total (on Employment
Tribunal Service figures).

Braziers and block votes are no more, yet the gentler weapon of employment
law is more popular than ever. The US model of employment relations has many
advantages for employers – weak unions, easy hire and fire, managerial
flexibility. The downside is increased litigation.

By the crazy standards of previous eras, getting taken to a tribunal
represents something of a bargain – even at £5,000 a go, which some claim is
the typical cost. But we live in consensual times, so the rise in tribunals has
brought howls of complaint from employers.

CBI director general Digby Jones claimed last year that tribunals were
"out of control and damaging UK employment relations", while a
"punt-for-cash culture" was taking hold2. In evidence, he claimed
that out of the full 130,408 applications, only 30,000 get as far as a hearing
– most are withdrawn or settled. Meanwhile, 64 per cent come from people who
had not followed in-house grievance procedures. In total, the CBI believed
employment tribunals cost employers £633m a year.

The protests and calculations succeeded in getting the Government’s
attention. On 20 July last year, it unveiled a package of reforms aimed at
reducing the volume of complaints, including the use of in-house grievance
procedures, raising the costs that could be awarded for pursuing ‘misguided’
claims up to £10,000, and, most controversially, introducing charges for
bringing a claim3. The latter was quietly dropped later in the year.

But here comes some news that will delight all enemies of conflict and all
fans of harmony. Next month, when the conciliation service Acas publishes its
annual report4, it will show that complaints to employment tribunals have
fallen slightly. It will say there were 100,878 applications, 52,000 of which
were about unfair dismissal (always the single biggest claim).

Complaints about equal pay are down, as are complaints about sex
discrimination, race discrimination and the national minimum wage; complaints
about disability discrimination are up marginally. "We always said the
increase in applications might level out," says an Acas spokesman.

The figures could be a blip – but a highly significant one all the same. It
means that irrespective of the Government’s efforts, the ‘compensation culture’
is not rising on an infinite curve. We have got very used to reciting the
factors which caused tribunal applications to grow: a more litigious culture;
the increasing volume of employment law under which employees could bring
claims (164 different jurisdictions); weak penalties against ‘trying it on’;
the pathologising of stress; the desire to blame someone for life’s little
mishaps; rapacious solicitors offering no-win, no-fee arrangements.

So what factors have caused applications to fall? With the clarity of
hindsight, it appears that employers and their organisations may have been
making a meal of the growth in employment litigation during the last few years.
While there is no denying tribunal applications trebled during the 1990s and
that the rise sounds shocking when expressed in this way, there are other, less
hysterical, ways of looking at the figures.

In 1979, 43,406 applications were made to industrial tribunals – 39,000 of
them concerning unfair dismissal5. In the year to March 2002, there were
100,878 applications, 52,000 of which were about unfair dismissal. Therefore,
despite all the momentous changes that have transformed working life and
employment law, just 13,000 more people now sue their employers per year for
unfair dismissal than 23 years ago. In a workforce of 28 million, it doesn’t
sound like the punt-for-cash ethic is terribly out of control. Rather
restrained, more like.

Here is another way of looking at conflict in British workplaces. The number
of days lost to industrial action has declined by 98.4 per cent since 1979,
while the use of tribunals has grown by about 57 per cent. Maybe this trade-off
should be incorporated into the analysis of the costs of compensation culture.

The fact remains that by historical standards, employment relations is
splendidly, even unctuously, consensual. Once in a while it might well behove
employers to reflect on the contemporary relevance of Harold MacMillan’s
phrase: ‘You’ve never had it so good.’

1 Conflicts of Interest, Diaries 1977-80, by Tony Benn, Arrow Books, 1991

2 Press release, 22 August, 2001

3 For detailed discussion of reforms IRS Employment Review, no 749,
15.4.2002; on

4 Acas Annual report due 24 July 2002

5 Figures from Acas

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