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Employment Tribunals and Employment Appeal Tribunal (Composition of Tribunal) Regulations 2023

Volume 835: debated on Wednesday 10 January 2024

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Employment Tribunals and Employment Appeal Tribunal (Composition of Tribunal) Regulations 2023.

My Lords, this draft instrument will delegate the power to determine the composition of employment tribunals and the Employment Appeal Tribunal to the Senior President of Tribunals. The regulations form part of a wider ongoing policy on the part of the Government to create a single judiciary in which all parts of the judicial system form a seamless whole, whether courts or tribunals, and to further the work of ensuring consistency of operation within the tribunal system.

Your Lordships may recall that, in the very old days —I am not completely sure but this may even predate the noble Lord, Lord McNally—tribunals were, in effect, almost a part of the department to which they were associated. Down the end of the corridor in the Ministry of Health or the Ministry of Social Security, there would be a tribunal that was supposed to review the decisions of the department. Over the years, however, it has been the Government’s policy, pursued particularly by the Labour Government and later by the coalition, to create a proper, independent, separately administered tribunal system.

From mid-2007 onwards, we have had a formalised, unified tribunal structure, in which all the various tribunals form the first tier. We have First-tier Tribunals, which consist of a series of tribunals dealing with social security, educational special needs, immigration and asylum, and various other things, with an appeal to the Upper Tribunal. The whole is presided over by a Senior President of Tribunals, who is currently the right honourable Sir Keith Lindblom. The Senior President of Tribunals decides on the composition of those various tribunals, across the board.

For historical reasons, employment tribunals have been an exception to this system. As your Lordships will recall, employment tribunals have a rather special history: they were originally called industrial tribunals and were set up at a time when, to gain public confidence, it was thought—rightly so—that those tribunals should have a particular statutory set-up shared jointly by what are now the Department for Business and Trade and the Ministry of Justice. The composition of employment tribunals was set out separately under the Employment Tribunals Act 1996. As your Lordships know, the original idea, dating from the 1970s, was that there would always be someone representing the workers, someone representing the bosses and a legal chairman of that composition.

Times have moved on a lot since. The Judicial Review and Courts Act 2022 set out a new framework, which provides that the Lord Chancellor has the power to determine the panel composition of employment tribunals, which he can delegate to the Senior President of Tribunals. These regulations implement that provision and allow the Lord Chancellor to delegate to the Senior President of Tribunals powers to determine the panel composition of employment tribunals, thus bringing them more fully within the unified system of tribunals and making the panel composition the same as all other tribunals.

The Senior President would be able to issue practice directions of the types of cases that can, for example, be heard by a judge alone, but he has to consult the Lord Chancellor about any practice direction that he is minded to make. The idea is to update the system, to create a more flexible process and to bring arrangements for employment tribunals and employment appeal tribunals in line with those that apply across the unified tribunal system.

Your Lordships will know that, particularly following the Covid pandemic, the tribunal system has been under great pressure. There is a need to be as flexible as possible to tackle these backlogs and to implement processes that are as efficient as possible. I take this opportunity to say that tribunals, particularly employment tribunals, have recovered well from the pandemic; the outstanding case load is falling and is below the pandemic peak. Members of employment tribunals and the judges in this sphere have done great work to tackle the backlog.

There is a matter that relates to what the noble Lord, Lord McNally, asked about on the previous statutory instrument: the status of non-lawyers who work in the judicial system. I will not call them lay members, as that phrase is not particularly appealing to them. It is not the Government’s intention that this should be a kind of backdoor to reduce the role of non-lawyers in our legal system. The Government’s view is that, from time immemorial, non-lawyers—citizens—have played an essential part in our legal system as a whole. That might have been as magistrates—the noble Lord, Lord Ponsonby, is a notable example—in a jury, or as members of tribunals.

We feel that this “lay participation” brings an extra texture, adds extra confidence, brings extra insights and greatly enhances the system as a whole—particularly from the point of view of diversity, which was the point made by the noble Lord, Lord McNally. You are drawing on a wide pool of potential appointments to tribunals and, generally speaking, that is an avenue in which you can enhance diversity in the wider judicial system. The regulations are not intended to undermine that in any way. I have had the great privilege of sitting as a judge in the Employment Appeal Tribunal, where the effect of the lay members was particularly striking. I will follow the noble Lord, Lord McNally, with a moment of personal reminiscence. In those days, the Employment Appeal Tribunal had some very distinguished trade union members: I think of George Wright of the Transport and General Workers’ Union; Norman Willis, the former secretary-general of the TUC; and others— I think I just missed Jack Jones, but only by a short margin. They brought enormous skill, wisdom and common sense to the operation of the appeal tribunal, and one would not wish to jeopardise that.

I thought that I would take the opportunity to make the Government’s position on that point clear. This statutory instrument is designed to bring employment tribunals in line with the rest of the system and to enable us to be as flexible as possible without in any way undermining the principle of lay participation, which I have just emphasised. On that basis, I beg to move.

My Lords, it is perhaps one of the wonders of our system that the noble and learned Lord, Lord Bellamy, and I should both have had the same job in government. I am not a lawyer, whereas he is a very distinguished lawyer and indeed a very distinguished judge. I used to be—if you are going to invite people of my age to speak at these gatherings, you are going to get some reminiscences—very nervous of that. At any meeting, I would say, “I have to explain that I am not a lawyer”. Then I entertained a distinguished jurist from the United States and explained that I was not a lawyer, and he said—very slowly—“Then I will speak very slowly”, so I stopped doing that.

I should also say that, in background and upbringing, I belong to a generation that was—and is—supportive of dialogue rather than confrontation in industrial relations. The Employment Tribunals Act and the setting up of the tribunals certainly underpinned and strengthened that approach to industrial relations. Of course, we will probably give a nod to it today.

The noble and learned Lord said that the industrial tribunals are being treated differently and that this will bring them into line with the rest. However, I think that the industrial tribunals are different and bring with them qualities that we should at least hesitate on before we lose them. I would like the Minister to clarify how the legislation would work in practice. For example, it would be important to know when and why the Lord Chancellor would decide to delegate the decision on panel composition to the Senior President of Tribunals. In the light of some of the more bizarre and short-term appointments of the Lord Chancellor in recent years, it would be equally important to know how and when the Lord Chancellor would reserve those powers to himself or herself.

In asking that question, I should emphasise that I have heard only the highest of comments of approval about the present Lord Chancellor. Nevertheless, it would be useful to know what criteria or conditions would lead the Secretary of State to delegate panel composition to a President of Tribunals and, by extension, to know what kind of case would lead the Secretary of State to retain these decision-making powers on panel composition. Has any estimate been made of the proportion of cases that would be delegated? What appeal process would be in place for decisions made in either direction? We on these Benches welcome making the process more streamlined. It would be useful to know whether the thinking is to offload most decisions to the Senior President of Tribunals and retain only a few for the Secretary of State. Then again, in those cases, what would justify such a retention?

I want to make a number of points; I am relying on an excellent brief by the TUC. I will not read it all out because it is quite a long one but the key points are worth repeating. It says:

“There have been a number of consultations in the last … years on panel compositions … The consistent view from employers, HR professionals, employment lawyers and trade unions is that non-legal members are of vital importance … Non-legal members bring a knowledge and understanding of the workplace and employment practice which judges often do not possess, and that when facts are in dispute, the quality of decision-making is higher, and the appearance of justice being done is greater when non-legal members are present. It is not clear why consistency … has been deemed of greater importance”

than those undeniable facts. It goes on to say that the trade unions

“oppose the proposed changes because lay members root tribunals in the realities of working life, build confidence in the process among claimants and respondents, and contribute to the diversity and inclusiveness of the tribunal system … The TUC believes that lay members should sit on all employment related cases, including fast track, unfair dismissal, whistleblowing and discrimination cases. Employment judges should only have the discretion to sit alone where a case involves complex issues of law, and all issues of fact are uncontested”.

Those are quite serious criticisms—and we are talking about a system that works.

Let me call back on my own experience again. When I was a Minister, I went along to a number of tribunals to see them in action. It was clear that the lay members’ knowledge and workplace experience, which a professional judge does not have, offered an injection of a practical perspective in discussing the arguments before a tribunal. The presence of lay members can also be an important reassuring presence for unrepresented parties. I sometimes felt a little queasy when I observed a tribunal and saw an unrepresented party on the one hand and a well-lawyered employer on the other.

Although the noble and learned Lord, Lord Bellamy, put the best gloss on it, a more fundamental change is being proposed. Those of us who do not see industrial relations in a confrontational way but encourage the tribunals’ approach should not allow it to be finessed away with common-sense orderliness. The industrial tribunals are special—their composition makes them special—and we should be careful before we lose those qualities in terms of what they deliver to our industrial relations.

My Lords, it is a great honour to follow the noble Lord, Lord McNally, but I do not have his great experience or knowledge. I will make a very lay man’s point. I thank my noble and learned friend Lord Bellamy for his illuminating outline of the background to this question and the history, taking us through why the Government are now keen to unify the employment tribunals within the overall structure of the tribunal system and keep them more obviously within the judicial system than they might have been before.

My question is one of clarification. My noble and learned friend explained that the Government do not seek to reduce or undermine in any way the lay composition of employment tribunals in future. Will there be specific instructions to the Senior President about the composition of the panel, including whether one, two or three members will be present? Will there be guidance on the balance between judicial and lay members?

In particular, I pick up on the point from the noble Lord, Lord McNally, about the employer-heavy element in tribunals. I recall when my noble and learned friend Lord Bellamy brought the academic freedom Bill through the House last year. At the time, it seemed important to me that we did what we could to redress the balance for single employees battling against a powerful establishment, often with the law behind them but unable to bear the pressure of finances and the stress that such cases can bring. For these reasons, I say to my noble and learned friend the Minister that it is necessary to keep this in perspective, even if we want to bring it in line with our overall judicial system.

My Lords, in his opening remarks, the noble and learned Lord said that this is not a backdoor to reduce the lay members within the judicial system. He went some way to say how much judges appreciate working with lay members, who are sometimes experts in other fields. The two noble Lords who spoke before me raised concerns on exactly this issue.

Although my brief is to accept the proposals of the Government without reservation—which I do, of course —I have reflected on my own experience. A number of magistrates sit on a number of tribunals; I can think of about 10 colleagues who do this, as it is quite common. Some sit on employment tribunals and some on other tribunals. Sometimes they are experts and sometimes they are lay people in other contexts. I remember a couple of separate discussions, with a magistrate who was a trade unionist and with magistrates who were employers, all of whom sat on these employment tribunals and were sceptical about the changes foreseen by these regulations. That scepticism was about money-saving and about trying to get consistency within the system when there is no merit beyond that consistency itself. There needs to be more of a reason than just consistency to make a change such as this. The noble and learned Lord gave us some reassurances in his opening, but there is scepticism out there nevertheless.

The question that both the noble Lords asked is: after these regulations go through, what criteria will the Lord Chancellor look at, if and when proposals come for more tribunals to be determined by single judges sitting alone, rather than by a panel of three? Will there be a process to review this? We heard from the TUC and I gave my personal anecdotes about colleagues with whom I have sat, and it seems to me that the justification of consistency alone is not sufficient. There needs to be a more profound justification to make this change. I look forward to the noble and learned Lord’s response.

I thank noble Lords for their comments. On the mechanics of this—I will be corrected by those sitting behind me if I get this wrong—if your Lordships approve these regulations, that in itself delegates to the Senior President of Tribunals the power to decide on composition. There is no further step by the Secretary of State; he simply delegates it, as he is empowered to do under the 2002 Act.

It is then for the Senior President of Tribunals to issue a practice direction setting out how he proposes to exercise those powers. There have already been some consultations in relation to that, which are possibly those referred to by the Trades Union Congress. The Senior President has intimated that, until he has the power to make the practice direction, it is not appropriate for him to make the result of the consultation public. I am sure we will know that in due course, but it is not too difficult to speculate, as a lot of reservation has been expressed about the very point that your Lordships are making. This point is not new; it is in the public domain. In effect, it is: “Don’t tinker with the well-established working relationships of employment tribunals”. That is thoroughly understood.

The Senior President of Tribunals does this job with all tribunals across the piece. Employment tribunals are special up to a point, but this is a job that he does and, if I may say so, we have to acknowledge that we have a wise and experienced president, as I am sure we will in the future. I am equally sure that he will exercise those powers responsibly.

However, in exercising those powers, first, he has to take account of the responses to the consultation. Secondly, I am sure that, de facto, he will take account of the reservations expressed in this debate and possibly in the other place as well. Thirdly, he has to consult the Lord Chancellor. I have stated the Government’s position on that—it is a major factor. Lastly, if, heaven forfend, there was real concern about the way things were going, this is only a delegated power: it can be taken back again. I venture to reassure your Lordships that I see no real prospect of the important role of lay members in employment tribunals being reduced as a result of this legislation. If that risk arose, there are sufficient checks and balances and reserve powers to make sure that it does not materialise.

The consistent view expressed by the Trades Union Congress was that

“non legal members are of vital importance”.

I may not have agreed with everything it said, but the Government agree with that; there is no difference between us. I anticipate that almost all noble Lords who have spoken, including myself, are at one on the importance of lay representation and membership from both sides of industry—those who know the workplace and those who know the employers’ and the employees’ perspectives.

Indeed, anecdotally—if your Lordships will forgive me—I cannot remember a case when I sat with a so-called employee representative where there was the slightest suggestion that that member of the tribunal favoured the employee. On the whole they did not; they could see when somebody was shooting a lion—which was also a valuable protection for the businessman. But in terms of public confidence in the system and particularly the imbalance of power—the lack of equality of arms—when you have a well-lawyered employer and a lay unrepresented employee, it is important that the appearance is of, and the reality is, a balanced tribunal. I trust that that will continue going forward. On that basis, I commend these regulations to the Committee.

Motion agreed.