INDUSTRIAL TRIBUNALS

HC Deb 29 July 1980 vol 989 cc1449-73 11.40 pm

Mr. Harold Walker () Doncaster

I beg to move, That an humble Address be presented to Her Majesty, praying that the Industrial Tribunals (Rules of Procedure) Regulations 1980 (S.I., 1980, No. 884), dated 26 June 1980, a copy of which was laid before this House on 8 July, be annulled.

11.41 pm

Mr. John Grant () Islington, Central

To judge from these latest regulations it may be thought that Britain's employers are having a hard time getting justice at industrial tribunals when workers complain that they have been unfairly dismissed or make other applications to have grievances dealt with. That would be the most logical explanation of the Government's persistence in seeking to change the law to tilt the balance in favour of employers. It is a persistence that has resulted in a third set of proposals within a year.

The latest package has been dumped on us, despite the lack of worthwhile evidence that these and other new provisions are necessary or desirable. The reports on industrial tribunals have entailed a curious piecemeal progress, but the overall intention is clear. It is to make hard-pressed employers feel better and give an inexpensive sop to the smaller firms, which have suffered most from high interest rates and recession and have no reason now to justify the support that most of them gave the Conservative Party.

To sketch in the backgrounds to these regulations, the Government began their assault on workers' rights last summer, in another of these largely unpublicised parliamentary late-night exercises, similar to this one. An order was secured increasing from 26 to 52 weeks the qualifying period before unfair dismissal could be claimed. That change took effect on 1 October 1979, along with another change, which weakened protection against redundancy. Then came the measures in the Employment Bill. Small firms will receive special exemptions from unfair dismissal procedures, the onus of proof on employers to show that dismissal is reasonable will be removed and alterations will be made relating to dismissal because of union membership agreements and to the way in which awards are made by tribunals, so that that much less compensation for sacked workers is likely.

The Government argue that they seek to reduce the burden of job protection laws on employers and particularly on small firms. They contend that those laws are a deterrent to the employment of more people. Ministers accept that it is undesirable to create a second tier of employees with less protection, and then go on to do just that.

Independent research, including research commissioned by the Department of Employment, is overwhelmingly against the Government in these matters, but all that is brushed aside, along with our votes and concern. The Employment Bill has now completed its final parliamentary lap before it receives Royal Assent.

However, after all that, the Government still are not satisfied. They have to tamper yet again, and so we have these further proposals. I have to admit that they have the merit of consistency. In Opposition the Secretary of State for Employment and his hon. Friends were constantly carping about the operation of the tribunals and the fact that they failed to make their case stick then has not deterred them in Government.

The work load of tribunals has risen appreciably over the years. The biggest single factor was the Labour Government's Employment Protection Act, which introduced a range of new rights for individual workers, many of which have already been seriously undermined by the present Government. Indeed, many workers have lost their rights entirely in some areas.

The new rights led to a considerable increase in tribunal cases. That was inevitable as workers claimed their rights under the Employment Protection Act and other legislation. One of the most cynical and hypocritical of the Government's suggestions is the claim that they constantly make that employment is being hindered by the operation of those workers' rights—at a time when hundreds of thousands are being thrown on to the industrial scrap-heap as a direct result of Government policies. Suggesting that the changes that we are discussing will make a jot or tittle of difference to job creation or protection would be an insult to the intelligence of hon. Members and an even more wounding insult to those who are unemployed through no fault of their own. We shall have to wait to find out whether the Under-Secretary uses that argument, but it has certainly been a constant theme of Ministers in recent months.

Four or five main changes are proposed in the regulations. The tribunals will be able to hold pre-hearing assessments, at which they will be able to warn an applicant that they think that he or she has no reasonable prospect of success and that if the worker insists on a full hearing it is likely to involve costs. That will worry many employees who believe that they have legitimate grievances. It seems to be deliberately aimed at discouraging applicants from pressing their cases.

I am aware that the change can apply to either party, but there is not much doubt that it is aimed primarily at applicants, to try to get them to withdraw claims or to accept what an employer might offer for a quick settlement. There is no worthwhile evidence or research finding to suggest that many unmerited cases reach the tribunals. The best survey is probably the industrial relations research survey of 1979, to which we referred a great deal in debates on the Employment Bill. That made it clear that few industrial tribunal applicants were out to pursue claims for what was called nuisance payments.

The odd industrial "nut case"—a person with a deep-seated and unjustified sense of grievance, an eccentric, or someone who is determinedly malicious—is the least likely type to be deterred from seeing it through to the bitter end. The House should also remember that there is a sifting-out process at the conciliation stage. About two-thirds of all unfair dismissal cases in 1978 ended in settlements outside the industrial tribunals.

Mr. David Mellor () Putney

The hon. Gentleman is having to struggle to work up synthetic hysteria against the change. Is he saying that it is a vicious attempt to deter people from coming to tribunals or is he claiming, as he appeared to be in his last few sentences, that it will not make any difference anyway? What detriment could there be to employers or to applicants if the applications that are genuinely frivolous, whether many or few, are weeded out by a warning at an early stage?

Mr. Grant

If the hon. Gentleman will allow me to develop my argument he will discover that it goes well beyond frivolous applications.

During 1979 the Leeds regional office of industrial tribunals carried out a prehearing assessment experiment, which was monitored by ACAS. The results showed conclusively that pre-hearing assessments did not sift out many claims, and the experiment was stopped. It is right to point out, however, that during the experiment industrial tribunals had no power to warn applicants about costs when they persisted in pressing cases. That is likely to be the biggest deterrent factor and the most intimidatory one.

While the time and money of the parties could be saved when a case is got out of the way at a pre-hearing assessment, when it does not come off and a case goes ahead the whole procedure will be lengthened, which will involve more time and money. A pre-hearing assessment at which the applicant wished to call witnesses or be represented could become more like a full hearing. That would add to the time and expense.

An important change widens the existing rule on costs so that they can be awarded against parties who bring or conduct cases unreasonably. A further deterrent to the employee is involved. Employers are likely to allege unreasonableness, and conciliation officers will warn applicants about that. "Unreasonableness" goes further than "frivolous or vexatious behaviour". I understand the proposition that frivolous or vexatious behaviour includes the notion of unreasonableness, but a person can be unreasonable without being frivolous or vexatious. There is no Government guidance on what constitutes unreasonable behaviour. The Government seem to believe that the change will encourage uniformity by the tribunals. Nothing that I have heard leads me to alter my view that it is more likely to produce more doubt and uncertainty. It could also lead to a greater use of lawyers, especially by employers. The Government say that they wish to avoid that, but each time they tamper with legislation they produce more work for the lawyers.

I turn to the change involving the discovery of documents before tribunal hearings. An employer can demand more information from applicants even before he has set out the case. The applicant can apply to have the employer's application set aside. The red tape involved could lead to delays and even evasion. The Government regard that change as technical. If that is so I hope that the provision will be monitored. There is room to doubt whether the change is for the better.

Industrial tribunals are to be allowed to adopt less formal procedures and rules of evidence. They can cut out the right of the parties to make long-winded opening speeches. We can agree about the desirability of that, but I fear that some of the other changes made under the regulations will detract from the value of that change and add to the length and legalism of the tribunals.

If regulation 14, on joinder, is used much the industrial tribunals might have to assess whether industrial action is justified. An unfair dismissal case about union membership might be heard. If a strike is called the union may be joined as a party to the proceedings. That may call for difficult judgments from a tribunal, especially when assessing compensation. Trade union members of tribunals may be faced with special difficulties. I hope that the Government have given thought to that. It is another undesirable consequence of the Employment Bill. Dangerous and uncharted waters are being navigated.

The Government claim that the changes will not discourage genuine applications to tribunals. Whatever is said about the changes, the overall motives are suspect and objectionable. The regulations are part of the pattern of tilting the balance from employee to employer. When the Government have the right audience they are happy to boast about that.

I want to refer briefly to some relevant statistics. In 1978, the last full year for which figures have been published, more than 65 per cent. of unfair dismissal cases were resolved without a tribunal hearing. Conciliation procedure accounted for agreed settlements in 35 per cent. of cases, and 30 per cent. were withdrawn. Of the remainder that reached tribunal hearings, 72.3 per cent. were dismissed, while 27.7 per cent. were upheld. Where compensatory awards were made, the median was only £375, even though the maximum possible was £5,200. It is hard to square those statistics with employer anxiety. It is the unions that might be expected to jib at the lack of success of their members at tribunals.

The Trades Union Congress is deeply concerned about the new regulations. Only the move towards less formal and legalistic tribunal procedures receives any union welcome. For the rest, my remarks reflect broadly the TUC view, shared by the Opposition and myself. The hon. and learned Gentleman will, I am sure, recall saying: The Government regard the concept of unfair dismissal as important and are as much behind in it 1980 as their Conservative predecessors were in 1971 when they introduced it.' These regulations are particularly concerned with unfair dismissal. That is an issue that the tribunals spend so much of their time dealing with. Ministers tend to stick to the line that whatever the clash about facts, employers think that they are hard done by, so that the psychological impact of changes such as those before the House will be significant. I have to tell the Government that the psychological impact on unions and the sacked workers whom they represent may also be significant Far from underpinning the industrial peacemaking machinery with these and other changes that the Government insist on making, the Government are likely to undermine confidence in the industrial tribunals system. If that proves to be so, there will be a tendency to look for more direct and damaging ways of redressing grievances.

The number of strikes arising from dismissal and disciplinary matters has fallen steadily. They accounted for 7.3 per cent. of all workers directly involved in stoppages in 1973, and by 1979 that figure had dropped to 2.9 per cent. There can be no doubt that ready access to the tribunals has played a valuable part in achieving this improvement. The action that the Government are taking tonight, together with other actions taken in this area, must put that progress at risk. If the Government interfere with the tribunals in a way that jeopardises their excellent work, the responsibility for the outcome will be entirely theirs.

11.58 pm

Mr. David Mellor () Putney

It may be the duty of an Opposition to oppose, but I do not think that tonight the Opposition have added much to their credibility in the House or outside by opposing these regulations. I cannot think that they add to their credibility by opposing the regulations with the exaggerated language of the class war set out by the hon. Member for Islington, Central (Mr. Grant). I would have been considerably more impressed by his speech on what is a fairly technical matter of tribunal procedure if I had felt that underlying it there was any clear evidence that the hon. Gentleman had spent any time at industrial tribunals, rather than picking up his brief from the TUC and parroting it off.

Mr. John Grant

The difference between us is that I am not paid as a lawyer to attend industrial tribunals. I earn my money by being a Member of Parliament in the House of Commons.

Mr. Mellor

I would not care to inquire how the hon. Gentleman earns his money. I am entitled to inquire of the hon. Gentleman's expertise in telling the House how industrial tribunals operate. I would have thought that the hon. Gentleman, by not taking issue with the suggestion that he had not spent a lot of time at industrial tribunals, merely proved my point. This is a technical matter of changes in industrial tribunal rules. It seems unfortunate that these technical matters should be subjected to the tired and weary cliché s of the class war that the hon. Gentleman seeks to bring forward.

The idea that these mostly drafting changes and only two changes of substance in the rules amount to an attack upon working people and their rights is nonsense. It might do the hon. Gentleman good to come along as an observer to hear one of the cases in which I appear. He might find it illustrative. It might improve the quality of his comment on the way in which the tribunals work.

Substantially, these regulations follow down the road that the last Government were travelling. Most of the changes are of a minor drafting nature. There are only four changes of substance, and to two of those the hon. Gentleman is hard put to take exception. One of them is related to an increased informality to which I should think he could hardly take exception. To be fair to him, he did not. The ones about consolidation proceedings and joinders are simply technical matters to save the tribunal's time and the parties' costs. If there are several actions arising out of one industrial accident I do not see how a procedure that enables all those matters to be disposed of at one hearing amounts to a class conspiracy. That rather defeats me, but it may appeal to Labour Back Benchers, which may be all that the hon. Member is concerned tonight to do.

Mr. Bruce Douglas-Mann () Mitcham and Morden

I accept that the hon. Gentleman has had much greater experience in industrial tribunals than I, but does he accept that in any set of proceedings a power to order further and better particulars from an applicant who is not legally represented may frequently be used by a party who is represented as an oppressive measure? Does he accept that the power that is contained in the regulations is capable of being used as an oppressive measure, and that the regulations are in some respects unacceptable for that reason?

Mr. Mellor

The hon. Gentleman was kind enough, quite properly, to say that his experience in these matters was not very great. I have to tell him that the rules about further and better particulars are the same as were contained in the previous regulations. There is no change. I am afraid that the hon. Gentleman's observations on the point are slightly off beam. If he is suggesting that these are new aspects he is wrong. They were contained in the regulations brought forward by his Government.

The two substantive changes are to be found in schedule 6, the pre-hearing assessment, and schedule 11, the addition as to costs. I should tell the hon. Member for Islington, Central, who is interested in my practice, that I appear both for applicants and respondents in these matters. I do not find myself in the position of having to defend one side or the other, but I find it difficult, whether I wear one hat or the other, to see why a pre-hearing assessment should not be an appropriate way of weeding out those applications that are totally without merit. Nothing could be better guaranteed to bring into disrepute the whole jurisdiction than people detaining, at huge cost in public money and to the individual litigants, tribunal time on cases that do not merit it. We all know the press publicity that is given to cases that are brought before tribunals and are plainly worthless. Any procedure that enables matters to be reviewed at an early stage should be welcomed.

The answer to the point that the hon. Gentleman makes, if he is sincere about the details and is not just seeking to make windy observations on the point, lies in this question. What is the draconian power in schedule 6 of which he is so afraid? Does the tribunal have the right peremptorily to strike out the proceedings, to say that they should not have the right to detain the tribunal? It does not. The provisions merely give the chairman the right to lean forward to the applicant, or even the respondent, and say that it appears that the proceedings are without foundation and to warn that if they are proceeded with the applicant or the respondent—whichever is appropriate—may be habile in costs. Try as I might, I cannot see that as a draconian power in the hands of a tribunal.

The hon. Gentleman gives the lie to his point by what he said at the end of his speech. He rightly paid tribute to the way in which industrial tribunals work, but is he suggesting that the same tribunals that he believes, as I do, operate fairly—because they consist of a balanced team of a lawyer, a TUC representative and an employers' representative—will use this provision oppressively?—or is the truth of it that however hard he tries to stir up all this class-war nonsense about the regulations this is merely a way of enabling a small but troublesome minority of cases, which should never be brought in the first places, at least to have the prospect of being weeded out before a substantial amount of time is spent by the tribunal in hearing them?

Mr. David Mudd () Falmouth and Camborne

I should be grateful if my hon. Friend would respond to the point that I now put to him. The pre-hearing tribunal might indeed have certain powers that could be exercised on the side of the applicant. It might well say to him "Under the overwhelming majesty of the law you might be tempted to withdraw this application, but there is a scintilla of doubt that might be exercised in your favour." That might encourage the applicant to proceed.

Mr. Mellor

A company may think that there is nothing in the applicant's case. He may go before a tribunal. It is just as likely that the tribunal would say, on the contrary, "You say that this applicant has no case. We think that he has probably got a very good arguable case, and we say so." I am grateful to my hon. Friend.

I now turn to the argument about costs. I find this difficult to understand unless the hon. Gentleman would care, on some future occasion, to attack the basic principle of the law in this country, developed over centuries, that costs follow the event. One takes a decision, as a free individual in society, to bring legal proceedings, knowing full well that bringing them will involve great expense for the person against whom one brings them.

We take the risk that if we fail to prove our case we have to pay the loss that we have caused the individual in defending himself against the charges that we bring. If someone is run over in the street—I sincerely hope that the hon. Gentleman will not be—and he chooses to sue the driver, that is the basis on which he does it. If a contract that he enters into goes wrong and he sues the other party, that is the basis on which he goes to court.

What is so monstrous about going before a tribunal and being protected against the usual rule that the costs follow the event? Before he is entitled to recover what it cost him to fight the case, the man—it may be the applicant—who has had to pay a great deal of money for the purpose of being represented at the hearing finds that he must show not merely that he was right and entitled to be vindicated but that the other party had been unreasonable. Once one gets outside the rhetoric of the class war, what can be so wrong about that?

It was a standing disgrace to industrial tribunals that people were quite often able to pursue, for day after day, claims that had no possible foundation in fact or law, and that cost hundreds of pounds in terms of costs and waste of executive time, and then, having had their cases summarily thrown out by the tribunal, nevertheless were not required to compensate the other parties because the claims fell just short of being frivolous or vexatious. If the hon. Gentleman would look up his law he would find that the words "frivolous" and "vexatious" are defined very restrictively by the appellate courts.

What is so wrong? Are the Opposition here tonight to defend the principle that people who behave unreasonably should not have to pay for behaving unreasonably? Is that really the basis on which these hon. Gentlemen come before us tonight? I simply cannot think that there is not a better ground on which to choose to fight. Indeed, I go so far as to say that in doing what he did my hon. and learned Friend erred on the side of caution. I would be well prepared to stand here or anywhere else and advocate that the basic rules that apply in any court in this country should apply in industrial tribunals. We take the risk upon ourselves if we bring a case. If we lose, we pay for the extent to which we have inconvenienced and caused expense to the person against whom we claim. My hon. and learned Friend has taken the point that this may be a disincentive to those people to come before a tribunal and he has very reasonably and only marginally extended the powers of industrial tribunals to award costs.

I cannot help feeling that it will be humbug if the Opposition press a vote on these regulations. I sincerely hope that they will not. Someone must make a better speech against these regulations than the hon. Member for Islington, Central managed before any Government supporters will be persuaded that there is substance in what the Opposition say.

12.10 am

Mr. Greville Janner () Leicester, West

I used to wonder why lawyers were so unpopular in the House; now I know. Having heard such condescension, such arrogance, and such lack of understanding of the purposes of a tribunal from the hon. Member for Putney (Mr. Mellor), I understand rather better why it is felt that those of us who are in the legal profession are trying to live off the miseries of others.

The hon. Gentleman does not seem to understand that those who go before industrial tribunals have been sacked. They have been dismissed, and they have no money. I remind him that that extreme Left-winger, the right hon. Member for Sidcup (Mr. Heath), introducer these provisions to give protection to those who lose their livelihood. He did so with the full support of the House.

The provisions were introduced in such a way as to give ordinary people the opportunity to claim rough and ready justice without fear—the right to go to a tribunal and to say "I have been dismissed unfairly." The hon. Gentleman indicated his utter ignorance by saying that the tribunal consists of lawyers and representatives of the TUC and CBI. It does not. There is a lawyer who is chairman and there are nominees of the TUC and CBI.

Mr. Mellor

A technicality.

Mr. Janner

That is not a technicality. Tribunal members would object most fiercely if they were called representatives of the TUC or of the CBI. They sit to do justice. They are there to try to act in a fair way and to give claimants their rights. It is no technicality. To suggest that it is is an example of ignorance from a person who says that he is regularly before the tribunals. He should know better. He should not criticise my hon. Friend the Member for Islington, Central (Mr. Grant) for doing his job in a first-class way.

The hon. Gentleman should understand that those who are represented and advised by trade unions are often very much better off when they appear before tribunals than those who have no such representation. Those who will suffer from the proposed change are not so much trade union members as people such as managers, directors, supervisors and foremen,. In these times of hardship those who fall into those categories are loing their jobs unfairly every day of the week. They are being made redundant unfairly and sacked unfairly. They are appearing before the tribunals.

The hon. Gentleman says that costs should go with the event. He argues that claimants should bear the costs if they lose. That is new, even for Conservative Members. It is something that will not go down very well with those who are in the trouble that I have described in the hon. Gentleman's constituency and who were misguided enough to support him in the election.

Mr. D. N. Campbell-Savours () Workington

Let us have a by-election.

Mr. Janner

The hon. Gentleman should study the realities of industrial tribunal procedures before he attacks my hon. Friend. If he did so he would realise that we are not discussing technical changes. The pre-hearing change is extremely important. All those who have dealt with tribunals have tried to find a suitable sieve to avoid cases coming forward that should not take up the time of the tribunal. The problem has been to find a sieve that would not remove cases that required a hearing, and which would not prevent claimants from getting their rights.

There are those who bring cases before tribunals who should not do so. There is a 72 per cent. failure rate. Some claims should not be presented before a tribunal. Equally, I am convinced that there are even more ordinary folk who do not bring their cases to tribunals because they are terrified of being labelled as trouble makers and never getting another job. That is another real problem, of which the hon. Gentleman would be aware if he had any contact with industry. I doubt whether he has ever had such contact. I doubt whether he has ever set foot in a factory or office. I cannot conceive that he has the least conception of the problems that are faced.

The problem of the pre-hearing assessment is how to introduce a sieve that will not remove genuine cases. It is a real problem. The Government have decided—

Mr. Dennis Skinner () Bolsover

Who holds the sieve, that is the problem?

Mr. Janner

In this case the people who hold the sieve are not a gang of lawyers. My hon. Friend must not confuse me with the hon. Member for Putney, particularly as my hon. Friend may need us before long.

Mr. Skinner

Who, you?

Mr. Janner

Lawyers have a purpose in upholding the rule of law and attempting to ensure that people get justice. A lawyer as chairman of a tribunal is no bad thing at all. No one has thought of a better idea.

The sieve of the pre-hearing assessment is held by the people who hold it in the hearing itself. That is not the problem. The problem is whether they will sift out cases that should go forward to trial. The pre-hearing assessment is not merely on documentation; it can include any representation in writing and any oral argument. In other words, it seems to me—and this is the major point—that we risk doubling the time taken, and not halving it.

The second point is that people who are now going to a tribunal are told "You don't have to worry. You are unemployed. Very well, you can get to the tribunal and put forward your case. Don't worry. You won't have to pay costs. Indeed, you will have your expenses paid. You won't get legal aid. You will have to put forward your own case or get a union to do it, or you will have to pay for it, but at least you know that you won't have to pay the costs of the other side". It is a swift hearing, and at a time when people are being sacked at such a rate it is a valuable right, given by the 1971 Act, improved by the 1974 Act, strengthened by the 1975 Act and now in the process of being whittled down.

Instead of those cases where costs are incurred because a person acted frivolously or vexatiously, we are now to interpret the words "otherwise unreasonable". The problem about reasonableness is that it is subjective. What I think is reasonable is obviously not what the hon. Member for Putney thinks is reasonable, and what he thinks is reasonable I should not have thought is what anyone else in his right mind would think is reasonable. When one considers reasonableness, one finds that it is always what one thinks is right.

I am prepared to agree on that, especially when one listens to the decisions of judges. Many of my friends are judges. Some of them are very reasonable people, and some of them are wholly unreasonable. However, once one inserts the question of reasonableness one introduces an element that is absolutely impossible for anyone to pin down. When one says that costs are incurred because someone unreasonably brought proceedings, one is making the bringing of proceedings in tribunals very dangerous indeed for people who have been dismissed and who have no money. What one is doing—and this is the real danger—is driving people out of a right that was given to them by Parliament, without a Division. It was about the only part of the Industrial Relations Act that was non-contentious, which we thought that even Attila and the extreme Right had agreed. We are now told that even this is a matter of class war.

I suggest that at a time of desperate hardship for people, literally millions of whom are now out of work, we should all be trying to help them to get the rights that they should have, presented to them by a tribunal, without having to incur the fear of costs which they know they cannot bear. We are removing rights in a way that I am sure the Under-Secretary does not intend to do. I am sure that he will say that this is essentially a technical matter and that it is a good-hearted and well-intentioned effort to prevent employers from having to face heavy costs in cases that should never have been brought.

We already have a sieve. The conciliation officers do a first-class job. They try to bring people to terms. The number of cases that fail is now more than 72 per cent. The number of cases brought to tribunals has dropped by 26 per cent. since 1 October, when the qualifying period was increased from 26 to 52 weeks. Surely enough harm has already been done to people who cannot bear it. Surely these regulations should not have included a pre-hearing assessment and costs that people will not be able to bear if they lose. I hope that the regulations will be rejected.

12.20 am

Mr. Douglas Hogg () Grantham

The hon. and learned Member for Leicester, West (Mr. Janner) has just made an emotional speech. He generally makes emotional speeches. One wonders whether he is capable of making an unemotional speech. He and the hon. Member for Islington, Central (Mr. Grant) demonstrated that there is no good reason for annulling these regulations.

In all material respects, these regulations are the same as the 1974 regulations as amended three times thereafter by Labour Members. I listened carefully to the comments of the hon. and learned Member for Leicester, West and the hon. Member for Islington, Central. In effect, they grumbled about four aspects of the regulations. Their belly aches were merely flatulent and added nothing to the debate. They criticised the pre-hearing assessment suggesting that in some way it would be used in an arbtirary and vindictive way in order to put pressure upon an employee to drop a case. That is complete nonsense. It reveals an ignorance about the way in which tribunals operate.

Broadly speaking, I have complete confidence in the tribunal system. I have rarely known tribunals to act unfairly. There is no bias against the employee. Indeed, it might be argued by some that the converse is true. I believe that the pre-hearing assessment is a very valuable safeguard to both parties. It is obviously a valuable safeguard to an employer, in that he should not be troubled by an unmeritorious case. It is equally important that the employee should know whether he has a reasonable prospect of obtaining compensation. Nothing is worse than an employee who harbours a delusion. Frequently, an employee believes that he has a good case when in reality he has not. Frequently, he refrains from seeking alternative employment in the belief that a reinstatement or re-engagement order is about to be made. It is highly desirable that a fair, independent tribunal should have the opportunity to tell one party or the other that the case is without merit and should not be carried any further.

These regulations impose no harsh sanction. The tribunal can merely say that it is possible that a subsequent tribunal will hold that the attitude of the employee or the employer is frivolous, vexatious or otherwise unreasonable, and that he may be liable for costs. The regulations impose a modest sanction, which helps the employee who is facing the problem of conducting litigation on his own behalf.

On the question of costs, I have the misfortune to disagree with my hon. Friend the Member for Putney (Mr. Mellor). I do not think that the ordinary rule for costs should apply in tribunals of this sort. Although I generally disagree with the hon. and learned Member for Leicester, West, I think that on this point he is right in saying that a different rule on costs should apply to industrial tribunals. Basically, I agree with his argument on that point. At the same time, I am certain that the regulations are fair and reasonable.

It is to be noted that, as a general rule, costs are not to be awarded. That proposition is enshrined in the regulations from which these regulations in no way detract. Costs will be awarded only where one or other party—and it can be either party—has acted frivolously, vexatiously or wholly unreasonably.

The hon. and learned Member for Leicester, West expressed difficulty in understanding "unreasonable". But "unreasonable" appears time and again in our legislation. It is bound to be subjective in a sense, but it has not given rise to problems in the past. Indeed, if the hon. and learned Gentleman looks at the 1974 legislation, of which he is well informed, he will discover the words "reasonable" and "fair" repeatedly. Therefore, I suggest that the argument on this point is again wholly without merit.

The final point made by the hon. Member for Islington, Central, concerning discovery, was surprising. He suggested that this was a new regulation, which would burden the complainant. A number of points can be made about this matter. First, this is not a new regulation. If the hon. Gentleman looks at the previous regulations he will find that in substance the discovery rules are the same. If they were good in the 1974 regulations, introduced by the Labour Government, I do not see how he can bellyache about them in the 1980 regulations.

This is a curious instance of the hon. Gentleman's doing a mischief to his constituents. As a matter of general practice, employees do not have any documents to produce on discovery. Employers have many documents to produce on discovery. Understandably, an employee—[Interruption.] I do not mind Opposition Members chattering away. They never listen to common sense. They always chatter. They are incapable of approaching important matters with open minds. It does not trouble me. If they want to go on chattering, they may do so, but I hope that at least the Opposition Front Bench will take this matter seriously.

Relevant documents are always possessed by the employer, and it is important that the employee should have an early opportunity of getting them. These regulations provide that opportunity.

We must look at these regulations in broad terms. They are, in substance and form, the same as the 1974 regulations. There is and can be no legitimate argument for opposing them.

Apart from the bad manners, prejudice, closed minds and ignorance of the hon. Members for Bolsover (Mr. Skinner) and Keighley (Mr. Cryer) and the whole of the Tribune Front Bench, we are seeing the old prejudice reasserting its ugly head. I am sure that the House will reject the prayer.

12.29 am

The Under-Secretary of State for Employment (Mr. Patrick Mayhew)

The debate has been interesting, and has revealed certain well-rehearsed positions. It is important to explain what led the Government to put these new regulations before the House.

I agree with those of my hon. Friends who have said that the vast majority of the regulations make technical changes. It is important to note that the regulations take the form of a useful consolidation measure, which has been in preparation for some time. We have had the assistance of the presidents of the industrial tribunals for Scotland, England and Wales. Most of the changes are non-controversial. They are designed to facilitate the smooth and just operation of the tribunals. AH the changes were made in close consultation with the presidents. I should like to express gratitude to them for the advice and help that they gave to the Department.

Those who have expressed doubts about the fairness of the regulations should bear in mind that they have the full approval of the Council on Tribunals, to which we were required to submit them in draft form under the Tribunals and Inquiries Act 1971. I hope that that will give some reassurance to those who have genuine misgivings about the regulations.

We took the opportunity afforded by consolidation to make three more significant changes. They are contained in rules 6, 8 and 11. We consulted widely on the changes, which were put forward last year in the working paper on the individual rights provisions of the employment protection legislation. Those proposals met with a wide degree of support. The first change on which we consulted concerned an attempt to reduce legalism at tribunal hearings. Our consultations are reflected in rule 8, which provides that: The tribunal shall conduct the hearing in such manner as it considers most suitable to the clarification of the issues before it and generally to the just handling of the proceedings; it shall so far as appears to it appropriate seek to avoid formality in its proceedings and it shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law. Try as one might, it would be difficult to find a sinister intent behind those provisions. We want to emphasise what the majority of tribunals demonstrate, namely, that the purpose of industrial tribunals is to provide a speedy, informal and simple means of disposing of the issues brought before them. It is desirable to spell that out in black and white.

I acknowledge that most tribunals conduct their proceedings in that way. Why, then, should it be spelt out? Rightly or wrongly, there is a widespread feeling—particularly among small businesses and employees—that industrial tribunals are complicated and mysterious and that one must be represented by a lawyer if one is to have any hope of succeeding. In order to dispel that mistaken but important view, we thought it right to introduce rule 8.

In paragraph (2) of the rule we cut out the right of each party t6 make an opening statement as well as a closing address. The purpose of the change, which the presidents of the tribunals considered of particular importance, is to streamline tribunal proceedings and to discourage legalism. They are not supposed to be like ordinary courts of law. There has been a trend for parties to choose to be legally represented before a tribunal. Such trends tend to gather momentum, since if one party is represented the other is likely to feel that he will be at a disadvantage if he is not represented. I hope that I should be the last to under-estimate the advantage to a tribunal of a competent advocate appearing before it. Such an advocate ought to focus attention on the relevant points and thereby shorten, not lengthen, the proceedings. This is of particular value in complex cases.

In the great majority of cases coming before industrial tribunals legal representation is not necessary, and we are particularly anxious to dispel any belief among the public that it is necessary by reason of the supposed formality of tribunal proceedings. That is why we have introduced this change, which we hope will encourage tribunal chairmen to take more of a grip on proceedings. I am glad to say that it has met with almost unqualified support from employee and employer organisations that we have consulted.

The other two major changes embodied in rules 6 and 11 are directed at preventing cases without merit reaching a full tribunal hearing. I know that there is a sieve represented by the conciliation procedures. It is fair to say that the statistics of cases that have been settled following intervention by the conciliation officers can, unwittingly, be misleading, because we all know that there are employers who reckon that they have an unbeatable case and that their defence is bound to succeed but who are put off by the sheer cost and inconvenience entailed in spending two, three or more days at the tribunal with their foreman and production manager, a couple of key witnesses This involves inconvenience to their factory or workshop, and at the end of it all, while they would win, they would not get any costs. The result is that they settle, because the conciliation officer perfectly properly says "I think he will take £200 or £300 to call the thing off."

That is what happens. It happens because there is not a sufficient means by which tribunals may sift out such cases, or do their best to sift them out, because these regulations do not give them power summarily to dismiss a claim that is seen to be unlikely to succeed. There is insufficient means for the tribunals to say to a claimant "Look, it is up to you, but we think, having heard you and heard anything further you have wanted to say, that you have got a hopeless case."

My hon. Friend the Member for Grantham (Mr. Hogg) was right to say that it is helpful for many claimants who are employees—certainly those who have not got legal representation—to be told whether they have a cat in hell's chance. I agree with him. Many people must realise that this has the ring of truth about it. Many people nourish illusions, which become obsessions, and they are convinced that they are bound to win. They are likely to take such advice from a tribunal when they might not take it from a lawyer or anyone else. It will be the whole tribunal that sits at this prehearing assessment. People may take it from the tribunal, which will say "Look, you can go ahead if you like, but you have not got a cat in hell's chance and you will be at risk for costs if you go on and lose."

Mr. Douglas-Mann

I accept that the requirement in rule 4 to provide further and better particulars existed in earlier regulations. Does the Minister think that it will be necessary for the tribunal both to have the power to require a claimant, in the circumstances he is outlining, to provide further and better particulars of his claim or, in the absence of those particulars, to know that the case is liable to be struck out and, in addition, for there to be the new power introduced by rule 6? Is not the Minister so loading the dice against the applicant that a very substantial number of potentially successful cases will be deterred? The tribunal has the power, by requiring further and better particulars, to deter the claimant who cannot sustain a case from pursuing it. Is it not superfluous to have the new powers in rule 6? If those are necessary, should he not abandon the powers in rule 4 to strike out a case?

Mr. Mayhew

I see the hon. Gentleman's point, but he fails to recognise that the two rules provide for different circumstances. Rule 4, which provides for requiring further particulars before the employer need enter an appearance, deals with the case where the claim as presented is obscure, but it does not necessarily follow that the claim is bound to fail. Therefore, one needs both the provision whereby the tribunal may give the warning that I have just been discussing, where it believes that the claim is bound to fail, or is almost certain to fail, and the provision that allows an employer to ask for further particulars to deal with the case where there is obscurity, where he cannot know how to deal with the claim until it has been made clearer. Therefore, I do not think that they necessarily overlap; there is a case for both.

The presidents of the industrial tribunals, who, after all, are in touch with the tribunals' day-to-day work, and themselves sit on quite a number of the cases, consider that public money is being wasted in a certain number of cases on full hearings which have no merit. That is why we have made the changes in rules 6 and 11.

I do not think—if I thought otherwise I should not be advising the House to accept these rules—that this procedure will be capable of putting pressure upon, deterring or intimidating an employee bringing a claim for, for example, unfair dismissal. It applies both ways. The rule makes it perfectly clear that the pre-hearing assessment applies to any party's representations—employer as well as employee—in the case of unfair dismissal.

I should also deal with the change that is proposed for costs. Rule 11 provides that tribunals may award costs where a party has behaved unreasonbly. It is right, as more than one hon. Member has said, that the present rule permits the award of costs only where it is held to have been frivolous or vexatious to bring the claim. The term "frivolous or vexatious" is tightly construed, and the result is that only in 2 per cent. of cases are costs awarded. The Shorter Oxford English Dictionary says that "frivolous" means manifestly futile, characterised by lack of seriousness, sense or relevance". The important point is that the employer recognises that even if he wins he has no substantial chance of getting any contribution towards the expense to which he has been put.

The hon. and learned Member for Leicester, West (Mr. Janner) said that it was a subjective and very unreliable test to introduce the concept of reasonableness. I am surprised to hear someone from my own profession say that. The key concept of English common law is what is reasonable. If the courts and tribunals cannot distinguish what is reasonable from what is unreasonable, we have slipped very far.

I draw some fortification from the fact that the employment appeal tribunal, under rules passed under the last Government in 1976—the employment appeal tribunal rules—itself must have regard to what is reasonable. Rule 21 says: Where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings, the Tribunal may order the party at fault to pay costs, or a contribution towards them. That was considered by the hon. and learned Gentleman's Government to be

NOES
Alexander, Richard	Brinton, Tim	Clarke, Kenneth (Rushcliffe)
Alison, Michael	Brooke, Hon Peter	Dean, Paul (North Somerset)
Alton, David	Brown, Michael (Brigg & Sc'thorpe)	Dorrell, Stephen
Baker, Nicholas (North Dorset)	Bruce-Gardyne, John	Douglas-Hamilton, Lord James
Benyon, Thomas (Abingdon)	Buck, Antony	Dover, Denshore
Berry, Hon Anthony	Cadbury, Jocelyn	Dunn, Robert (Dartford)
Blackburn, John	Carlisle, John (Luton West)	Eyre, Reginald
Boyson, Dr Rhodes	Carlisle, Kenneth (Lincoln)	Garel-Jones, Tristan
Bright, Graham	Chapman, Sydney	Griffiths, Peter (Portsmouth N)

perfectly all right, and the former Lord Chancellor signed those rules.

If the hon. and learned Gentleman reflects he will realise that there will not be the slightest difficulty in a tribunal's applying this concept. I believe that it is a sensible widening of the safeguard that the present very tiny ability to award costs affords to an employer. We do not think that it will be a major change. I do not think that in practice the tribunals will interpret the new rule much more widely than the old one, but it will be a useful reassurance to those employers, particularly small employers, who believe that the dice are unfairly loaded against them. It is because, regrettably and in many cases unjustifiably, there is this belief that the opportunities for people to gain employment with small firms are unnecessarily curtailed.

It is late at night and I hope that I have dealt with the points that have been raised. I believe that the House wants to come to a conclusion. I have listened to all the points that have been made in support of the prayer, but I do not think that they have been made with great conviction. An objective and reasonable assessment of the weight of the argument must lead to the rejection of the prayer.

Question put:—

The House divided: Ayes 44, Noes 92.

Hampson, Dr Keith	Mellor, David	Speed, Keith
Hawkins, Paul	Miller, Hal (Bromsgrove & Redditch)	Speller, Tony
Hawksley, Warren	Mills, lain (Meriden)	Spicer, Jim (West Dorset)
Heddle, John	Moate, Roger	Spicer, Michael (S Worcestershire)
Hogg, Hon Douglas (Grantham)	Morrison, Hon Peter (City of Chester)	Stainton, Keith
Hooson, Tom	Mudd, David	Stanbrook, Ivor
Hurd, Hon Douglas	Neale, Gerrard	Stevens, Martin
Jopling, Rt Hon Michael	Nelson, Anthony	Stradling Thomas, J.
Kellett-Bowman, Mrs Elaine	Newton, Tony	Taylor, Teddy (Southend East)
Kershaw, Anthony	Normanton, Tom	Thompson, Donald
Le Marchant, Spencer	Onslow, Cranley	Waddington, David
Lester, Jim (Beeston)	Page, Rt Hon Sir Graham (Crosby)	Wakeham, John
Lloyd, Peter (Fareham)	Page, Richard (SW Hertfordshire)	Walker, Bill (Perth & E Perthshire)
Loveridge, John	Penhaligon, David	Waller, Gary
Lyell, Nicholas	Prior, Rt Hon James	Wheeler, John
MacGregor, John	Proctor, K. Harvey	Wickenden, Keith
McNair-Wilson, Michael (Newbury)	Rathbone, Tim	Winterton, Nicholas
McNair-Wilson, Patrick (New Forest)	Renton, Tim	Wolfson, Mark
Major, John	Ross, Stephen (Isle of Wight)	Young, Sir George (Acton)
Marlow, Tony	Sainsbury, Hon Timothy
Mates, Michael	Shaw, Giles (Pudsey)	TELLERS FOR THE NOES:
Mather, Carol	Shepherd, Colin (Hereford)	Mr. Robert Boscawen and
Mayhew, Patrick	Skeet. T. H. H.	Mr. John Cope.

Question accordingly negatived.