Costs in Employment Tribunals

27 05 2009

At first glance this might not seem the most exciting topic, but bear with me as the recently reported Employment Appeal Tribunal (EAT) case of Daleside Nursing Home v Mrs Mathews has thrown up a very interesting point about when costs might be awarded against the losing party before an Employment Tribunal (ET).

The usual rule is that ETs don’t award costs against the losing party, unlike in the High or County Court where that is the starting point (although even in those venues this rule is subject to several caveats but that is another story).  ETs have the power to award costs, it is just that they don’t do it very often.   The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 provide that power. In particular Regulations 38 – 48 set out the costs regime. 

Reg. 40(2) provides that an ET may order costs against the paying party if it considers that that party has acted unreasonably either in the bringing or the conduct of the proceedings.  Reg. 41 limits the costs that an ET can award to a maximum of £10,000, although if the case is sent to the County Court for detailed assessment more can be awarded.  The ET also can have regard to the paying party’s ability to pay an award for costs, so if a party has behaved badly in bringing the case in the first place or in the way they progressed the case but they don’t look like they’re worth the money, an ET doesn’t have to award costs against them.  Contrast this with the Courts where no such power exists unless the paying party is legally aided, in which case the court will make an order for costs but stipulate that it is not to be enforced without leave. 

The Daleside case is interesting because it was an appeal by the employer from the refusal of the Liverpool ET to award costs against the employee where she had claimed direct race discrimination.  In particular she had alleged that her line manager had called her a “black bitch”, although the ET found that that comment had not been made. The reasons they cited were that Mrs Mathews waited for almost three weeks after the comment was made before complaining about it and just before she was about to face disciplinary proceedings.  The ET took the view that the alleged comment was a “cynical lie” on the part of the employee.  Mrs Mathews subsequently lost.  The employer sought an order for costs but the ET refused to make one so the case proceeded to the EAT on that one point.

Not surprisingly, the EAT held that an order for costs should have been made given that the disputed comment was at the heart of the case for racial discrimination.  The Judgment  at para. 20 states

In our judgment, in a case such as this, where there is such a clear cut finding that the central allegation of racial abuse was a lie, it is perverse for the Tribunal to fail to conclude that the making of such a false allegation at the heart of the claim does not constitute a person acting unreasonably.”

The EAT then sent the case back to the ET for consideration of how much should actually be awarded against Mrs Mathews.  Interestingly, at para 3 the judgment states that the EAT was not seeking to lay down “any more general statement of legal principle”.  That remains to be seen as I suspect this case is now going to be quoted by both employers and employees ad nauseam  in any case where there is a dispute on the facts (ie most cases!).

Equal Pay

21 05 2009

I was watching “The Trouble with Working Women” on BBC2 last night.  The newsreader Sophie Raworth and a bloke called Justin investigated why women don’t earn as much as men in the workplace.  I don’t think it gave any precise answer as to why it occurs; it merely highlighted that the Equal Pay Act 1970 has done little, or nothing, to reduce the gender pay gap. 

According to the statistics they presented, if I heard it properly whilst burning the supper, women in the City get paid 60% less than men.  60%!  If this is correct it is incredible.  I can fully accept that a pay gap exists between the sexes and that discrimination still occurs but the amount seems amazing.  

Be that as it may, I then read in Employers’ Law*, a useful HR magazine published by Reed, that equal pay claims accounted for one-third of all Employment Tribunal claims in 2007-08, which is not surprising in the circumstances.  The article then goes on to state that 52% of those claims were withdrawn , 23% struck out following a hearing and only 7% were successful.  What about the other 17%?  Presumably those were the cases where the employer succeeded in rebutting the claim.

The number of equal pay claims has been increasing over the last few years, but increased massively last year.  In 2007/08 60,000 equal pay cases were lodged, up from 17,268 the previous year and 4,412 in 2003/04 .  This huge increase may reflect increased public awareness of the gender pay gap or it may be a factor of the recession – if you have just been placed at risk of redundancy, why not submit a claim for up to six years’ wage differential?

Equal Pay claims are difficult to prove, cost lots of money in legal fees and take a long time to bring to a final hearing.  In very basic terms there are two types of claim that a woman can bring if she thinks she is being paid less than a man; (1) a claim for like work (i.e. that a man is doing the same job as her for more money) and (2) a claim for work of equivalent value – in other words that a man doing a similar but not the same job is getting paid more.  The claimant can backclaim for up to six years.  The second type of claim is particularly difficult to bring because it requires an expert assessment of the composition of the roles in question.  My guess is that the 52% of withdrawn claims include claims which settled because both parties did not have the resources to fight all the way, or employers who did not  want the publicity of  Tribunal proceedings.   That only 7% succeeded of those Claimants  that did fight on reflects the difficulty in proving the cases and obtaining the necessary evidence. 

One of the main problems for a claimant is finding a comparator – i.e can a female Claimant point to a man doing the same work or an equivalent job for more money?  It is often easier said than done, but this may change following the Court of Appeal’s (“CA”) judgment in the case of Mid-Suffolk Mental Health Partnership NHS Trust v Hurst and others which may make it easier for Claimants to succeed.  The CA said that it would not be necessary for Claimants to name a comparator in order to succeed.  New legislation in the Equality Bill (see my earlier post on this) is likely to have a much more radical effect.  Secrecy clauses in employment contracts will be outlawed, allowing employees to discuss what they earn.  Public authorities will have to publish gender gap pay details and private companies with more than 250 employees have until 2013 before they are required to do the same.

It is to be hoped therefore that the gender pay gap will eventually be eliminated and women no longer paid less simply because of their gender.  There’s a long way to go though.

* Employers’ Law May 2009 p.10

Blacklists to be blacklisted?

15 05 2009

I’ve written before about the National Staff Dismissal Register (NSDR) in the Retail Sector and the blacklist published by The Consulting Association (TCA) in the construction industry.  The former is a joint venture between Action Against Business Crime (a consortium formed between leading retailers and the Home Office), the latter a database compiled by a private company that then sold details to about 40 leading construction companies.  News comes this week that the government is planning to introduce regulations to proscribe blacklists used by companies to identify Trade Union members and thus not employ them.  The TCA blacklist appears to have identified trade union members as trouble – e.g “ex shop steward definite problems” and similar.  The government thinks, rightly, that potential employees should not be discriminated against because of their Trade Union membership.

Back in January the House of Lords ruled that care workers accused (note accused, not convicted) of harming children or vulnerable adults and placed as a result on a provisional blacklist could sue for infringement of their rights under the Human Rights Act.  It was estimated by the Royal College of Nursing that there were 5,500 names on the list.  The particular harm with that blacklist was that the people on it were undergoing investigation and could not work in the months it took for the investigatory and appeals process to be completed. Compensation claims will undoubtedly result.

All seems to have gone very quiet on the NSDR, which was a system retailers put in place to notify other members of staff dismissed for theft, fraud, forgery and criminal damage.  Again, no formal criminal investigation or conviction is required, leaving open the possibility that a malicious employer could prevent an employee getting back into work just by placing an entry in the register.   Safeguards are said to exist and all members have to agree to a strict code of practice, but I am struggling to see any fundamental difference between the NSDR and the TCA type blacklist – other than in the latter case the government might be trying to appease its friends in the Trade Union movement.  On the other hand the government is prepared to promote a scheme in the retail sector which surely infringes Data Protection legislation.  Is this yet another example of the government’s rather oppressive attitude towards civil liberties?

Monday musings

11 05 2009

Apologies for the recent silence.  Last week I took Mrs J. and the Junior Jobsworths to Southwold, Suffolk, for a brief holiday.  I had every good intention of posting whilst away but couldn’t get WiFi access.  I have to admit that I didn’t try that hard either. 

Without internet access I was a bit short on employment issues to write about, apart from the one emerging political story on MPs expenses as published by the Daily Telegraph. I have been particularly struck (like with a  cricket bat) by Hazel Blear’s defence of her own failure to pay Capital Gains Tax on a residence she sold on which she was claiming expenses.  She said (as all MPs seem to be doing) that she hadn’t broken any rules but the “system was wrong”.  No one seems to have asked her at what point she realised the system was wrong; perhaps it was when she was found out? Did it not occur to her at the point she elected to choose the London flat as her main residence for CGT but not for parliamentary purposes?  She must think the electorate is stupid.

Why I am posting on this?  Simply because in an employment context any employee doing the same would probably face disciplinary proceedings and a real risk of dismissal. If you want to get rid of an employee, take a look at their expense claims is what I was once told.  What has been happening in Parliament just demonstrates how out of touch they are there. 

Rant over.