Dispute resolution law: Hammer blow to tribunal hopes

Tribunals are the bane of many HR professionals’ lives, and the problem shows no sign of going away, with new figures revealing that the number of claims has risen by 33% in the past year.

In total, 115,039 applications were registered in 2005-06, compared to 86,181 the previous year, according to the Employment Tribunals Service.

The majority were claims for unfair dismissal, unauthorised deduction of wages and breach of contract.

Both employers and unions have seized upon the figures as proof that the dispute resolution regulations, introduced by the government in October 2004, are not working as intended.

False dawn

Initial signs were that the legislation was having the desired effect – a 16% fall in the number of single tribunal hearings in 2004-05 from the previous year.

However, the TUC said that figure was “artificially low” as many claims had been held up because of uncertainty surrounding the new procedures.

Sarah Veale, TUC head of employment rights, said: “The government said that the new procedures were designed to secure more workplace resolution of employment disputes, with the implication that this would reduce litigation. The new procedures aren’t working as intended, and we cannot see any real evidence that they are reducing claims to employment tribunals.”

The reason claims fell when the procedures were first introduced was because “confusion reigned”, Veale said. “A number of initial applications were rejected by tribunals on the grounds that the new procedures had not been used.”

Susan Anderson, CBI director of HR policy, said: “We are disappointed that the new regulations, designed to resolve disputes in the workplace, and new tribunal procedures have failed to have a greater impact on reducing the number of cases.”

Lack of confidence

Employer confidence in the system remains low and it is still seen as too adversarial and damaging to employee relations, she added.

CBI research shows that less than one in three employers believes the system is effective, and one in four opts to settle rather than go to a full tribunal.

Richard Fox, head of employment at law firm Kingsley Napley and chair of the tribunal monitoring working party at the Employment Lawyers Association, agreed that the jury was still very much out.

“The regulations are so complicated that people are taking a while to get comfortable with them,” he said. “Once this happens, I have a feeling that the number of single claims will start to rise.”

He also believes the forthcoming anti-ageism laws will lead to a sharp rise in claims.

The government is planning a review of the dispute regulations, with a consultation document expected to be published in the autumn.

However, the rise in claims cannot be solely attributed to the ineffectiveness of the dispute regulations as it has largely occurred in two jurisdictions where there have been multiple claims in the past 12 months.

Multiple claims

Equal pay cases more than doubled to 17,268, primarily due to multiple claims by local council workers in dispute with their employers. Councils in the North East of England have been particularly hit, with no-win, no-fee lawyers filing cases for swathes of workers. Claims for breaches of the Working Time Directive rose by a massive 32,000, thought to be mainly due to claims from British Airways staff over working time arrangements at the airline. And sex discrimination claims leapt by 20%, the figures show.

The high number of multiple claims has led to a renewed call from unions for class actions to be introduced – whereby a single individual would represent a number of people in one workplace.

Veale said: “Group actions would allow claims to be marshalled by a union within one application, saving the burden of employees, employers and tribunals having to deal with hundreds of separate applications.”

Number crunching

115,039 – The number of claims registered in 2005-06

41,832 – The number of unfair dismissal claims

395 – The number of sexual orientation discrimination claims

26% – The percentage of Acas conciliated settlements

£10,807 – The average award in sex discrimination cases

Source: www.employmenttribunals.gov.uk

Tribunal ruling could force agencies to give temp staff full employment rights

Recruitment agencies may be forced to offer full employment rights to temporary workers, following a landmark ruling by an employment tribunal.

The tribunal ruled that Sheila Ncube, who worked as an agency nurse for the 24/7 Healthcare Agency, should have been considered a full-time employee, including rights of unfair dismissal, redundancy, maternity and paternity leave and holiday pay.

The case came to tribunal when 24/7 became insolvent and was taken over by another agency, TrustHealthcare, which refused to pay Ncube for annual leave.

TrustHealthcare said she was not entitled to annual leave pay as she was a temporary worker, not an employee, claiming that when companies become insolvent, the new owner is not liable for agency staff.

The Royal College of Nursing (RCN) advised Ncube to take the case to tribunal, which ruled against TrustHealthcare.

Kevin McNermey, RCN senior legal officer, said: “This decision will be far-reaching not only for nurses, but for supply teachers, admin staff and for anyone who is with an agency, as they can have the same rights as employees.”

But Christopher Davies, employment lawyer at law firm Halliwells, said that it would be “very unusual” for an agency worker to be found to have employee status with an agency for the purpose of claiming unfair dismissal.

“The decision was that Ncube was entitled to holiday pay and that the liability for payment transferred across under TUPE,” he said.

“Technically, this does not necessarily mean she will have unfair dismissal or redundancy rights – only available to an ’employee’ under the Employment Rights Act (ERA).”

Davies added that Ncube only needed to be a ‘worker’ under Working Time Regulations to get holiday pay and an ’employee’ under TUPE legislation.

The definition of an employee under TUPE is much wider than in the ERA, he said.


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