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Review of Workplace Dispute Resolution

25 March 2009

Members present for all or part of the proceedings:

Ms Sue Ramsey (Chairperson)
Mr Robin Newton (Deputy Chairperson)
Mr Alex Attwood
Mr Paul Butler
Mr Alex Easton
Mr Willian Irwin
Ms Anna Lo
Mr David McClarty
Mrs Claire McGill


Ms Deirdre Stewart ) Confederation of British Industry

The Chairperson:

I welcome Deirdre to the meeting. Members will know that she talked to the Committee about apprenticeships a few weeks ago. Today, she is here on behalf of the CBI to talk about workplace dispute resolution. I will hand over to Deirdre, and then we will open up the meeting for questions and answers.

Ms Deirdre Stewart (Confederation of British Industry):

I will speak for just a few minutes. I have submitted a fairly brief paper on the basis that the consultation document will, I understand, be released on Monday, and we will then have a fairly detailed consultation with our members. Therefore, I have purposely kept the paper at a fairly high level, using the benefit of my colleagues in our London headquarters in relation to when they went through this exercise after the Gibbons review. However, from what I have heard from our members, I believe that the same points still apply.

Our concern with the current three-step procedure is that it is quite formal. As our members already tend to have good procedures in place, they find that it perhaps over-formalises and exacerbates situations that are probably better resolved informally. The fact that those steps have to be taken, if you do not dot the i’s and cross the t’s, that could be held against you if the matter does end up in an industrial tribunal. Therefore, that formalises procedure over substance.

However, if we go down the same road as GB and repeal the procedures completely, it would be absolutely crucial that the guidance that I presume the Labour Relations Agency will produce would be user friendly and detailed enough to help employers in that situation. I presume that that would also be considered if a case does, unfortunately, end up in a tribunal. That will be absolutely crucial.

The Advisory, Conciliation and Arbitration Service (ACAS) in GB has managed to get more resources to fund its helpline. The Labour Relations Agency here, which, I am sure, has been speaking for itself about this issue, will probably want to be fully equipped to deal with the situation if we do go down the road of repealing the three-step procedure. As you are aware, the agency has a fairly active role in trying to resolve disputes before they get to the tribunal stage.

As I have pointed out in my paper, being on the working group that has considered this issue over the past year or so has been a very useful exercise, because the consultation document will cover tribunal procedures and other issues such as, for example, the need for an employment appeal tribunal, for which the CBI has been lobbying for quite a few years.

Therefore, it will be very good that all of those matters are being considered in the round. It just means that we will have a fairly large consultation document, but it will be a valuable one.

The Chairperson:

Thank you very much for your submission paper, and it is useful that you highlighted some of the issues in that. It is useful, too, that you told us that you are a member of the working group. In fairness to the Department and to the Minister, he said that he was coming here with a blank sheet. The Committee agreed to look at that and to take on board the issues, concerns and comments of relevant groups. Today, you are part of that. I will now open the meeting to questions or comments.

Mr Newton:

Can I take it that, in general, the CBI is in favour of the approach that is being adopted?

Ms Stewart:

Do you mean the approach that is being adopted in GB?

Mr Newton:

In the working group.

Ms Stewart:

Yes; I think that that has been a very useful process. We have thrashed it out right from the beginning, looking at what the Labour Relations Agency does at the moment and at what, for example, the human rights commissioners in the Republic of Ireland are doing, which some feel is a useful model. Personally, for various reasons, I am not convinced. However, we did go to the South to observe their hearings. What I found interesting was that they got through an unfair dismissal case in 40 minutes, which is amazing, because that would not happen here. Therefore, it was certainly a quick and relatively informal process.

That was one case. Of the other two cases that we observed, one, I felt, should have been dealt with administratively because it was about just payment of wages and pay rates. The commissioner, who sits alone, was sitting with her calculator working out what those people should be paid. I would suggest that you do not need a commissioner to do that, and I do not think that there was any question about the liability of the employer. Therefore, I thought that that was a waste of the commissioner’s time.

At the second case, one of the parties did not show up. If that had happened here, that case could have been struck out by the tribunal and that would have been the end of it, because the person did not show up. In the Republic of Ireland, however, there is no legislative provision for that, so a case goes on to the Labour Court, even if the person had not bothered to turn up. That system, therefore, is not perfect, but it is certainly a quick process, and interesting to observe.

Because we have gone through, in quite a bit of detail, all the methods that can be used at the moment for dispute resolution — conciliation, arbitration and so on — and have seen how those are working and how they can be improved, quite apart from the three-step procedure, it has been a very good exercise because, as I said, it has enabled us to produce a consultation document in the round, because we have been quite wide-reaching in the areas that we considered. We have also had someone over from the ACAS to tell us about their experience in GB.

The Chairperson:

I am sure that you will be encouraging your members to respond to that consultation.

Mr Stewart;

We will. Dispute resolution is probably one of those things of which some have a lot more experience than others. Unfortunately, some of our members would be at a tribunal fairly often; others would not, perhaps having a case every few years. Obviously, given the way that they run their businesses, they will all have some experience of trying to resolve disputes. Therefore, we will be undertaking a fairly detailed consultation process when the document is out next week. I hope that it is next week. It is next week, as far as I understand.

The Chairperson:

As far as the Committee understands, it is next week.

Mr Attwood:

I know that you are here to represent the CBI and it is interesting to hear that perspective. However, would you agree that, whatever your experience at the CBI, it might not be the experience elsewhere in the employment world, for example in the public sector? As I said before at the Committee, a very senior employment lawyer said at a private NICS seminar recently that he sensed that because the public service was backed up by public moneys, rather than deal with grievances in-house when they arise, it was perfectly prepared to allow grievances to run all the way to a tribunal on the basis that the complainant would, eventually, run out of time and money.

Therefore, whatever the CBI experience, to which I shall return in a moment, there is a need for the public sector and big employers to have elaborate, formalised approaches — especially if some Departments have a bit of a culture of we will dig in here and grind this person down. There may be some uncertainty in the CBI about some issues, but having that approach works for a lot of other public-sector organisations because there is an imbalance in power relations between the employee and a big public-sector employer. Would you acknowledge that there is, at least, an argument about that?

Ms Stewart:

During the group meetings in working towards producing a consultation document, we heard that there is an issue in the public sector about how the Audit Office handles disputes about paying out money and so on ― because public bodies are very afraid of being criticised by the Audit Office, they feel that they have to go through a procedure.

I take your point, but I have not particularly heard such a concern. My feeling, I suppose, is that, yes, obviously there could be an imbalance, but the public sector is fairly unionised, and that might help to even up the scales a bit. The public sector should have pretty good procedures anyway — it should be the exemplar for other employers. I would have thought that the public sector would have been much further down the road procedurally.

Coming at the matter from a different side, and I know that the Committee has taken evidence from the Federation of Small Businesses (FSB), I think that there is an issue in relation to smaller employers, where there could be some value in having some sort of template, as it were — although not too rigid a one — rather than not having any procedures at all.

Mr Attwood:

You are here to represent a particular sector, so I understand why you are saying what you are saying. I think that you use a hard case to try to defeat a sound principle, such as talking about an employment issue being found, one way or the other, on the basis that there was not a letter confirming a hearing. That is a hard case, and hard cases do not make good law.

The truth of the matter is that I could give you oceans of cases in which an employee was found to be in the right because of breaches of technicalities that are much more than whether one received a letter to confirm whether there would be a hearing. It is essential that technicalities are got right in processes. Therefore, I do not agree that procedure gets elevated over the substance, because procedure is, in many cases, part of the substance, and a failure of an employer to follow due process and proper procedure ends up, rightly so, with them being found in the wrong.

I think, therefore, that you use a bad example to prove your point, because, clearly, a case being found on the basis of such a letter would raise doubts generally. That, however, is not the point. The point is much more significant than that.

Ms Stewart:

As you said, I am, obviously, here to represent the views of our members, and that is what they are feeding through to us. As I have already said, that also reinforces how important the guidance will be if we go down the road of repeal. A guidance document could help in a lot of those areas. I think I am right in saying that the ACAS document is fairly substantial, but it is important to get guidance that is user friendly for employers. However, I do see where you are coming from as well.

The Chairperson:

Thank you, Deirdre. No other member has indicated that they want to ask a question. On behalf of the Committee, therefore, I want to thank you very much for your presentation, and for your paper. It will help us with our response to the consultation document, which will be published next week.