Niran de Silva on the Law Commission Report on Employment Law Hearing Structures

On 29 April 2020, the Law Commission published its report on Employment Law Hearing Structures. The Report runs to just over 200 pages and concludes with 23 recommendations to improve the Employment Tribunal’s ability to resolve disputes. 

THE RECOMMENDATIONS 

The Commission’s key recommendations are as follows:

Changes to Time Limits

• A single six-month time limit for all employment tribunal claims.
• The “reasonable practicability” test which applies to extension of time for certain claims, including unfair dismissal, be replaced by the “just and equitable” test.

Contractual Claims

• Tribunals to have jurisdiction to hear contractual claims (a) brought by employees whose employment has not terminated and (b) where the liability arises after termination.
• The cap on contractual damages in the Tribunal to be increased from £25,000 to £100,000, to apply both to employees’ claims and employers’ counterclaims.
• Workers as well as employees to be entitled to bring contractual claims in the Tribunal.

Contribution Claims

• Respondents to discrimination claims to be able to claim contribution from others who share joint and several liability with them.

Tribunals’ Relationship with the Court

• Employment Judges to sit in the County Court to hear non-employment discrimination claims.
• The Equality Act 2010 to be amended to provide a power to transfer equal pay cases from the Courts to Tribunals, with a presumption in favour of transfer.
• An informal specialist list to be established within the Queen’s Bench Division to deal with employment and discrimination-related claims, including equal pay, restrictive covenants, team moves, confidential information and injunctions to prohibit industrial action. 

COMMENTARY

Changes to Time Limits

Increasing time limits was favoured by a majority of those consulted, including in the recommendations from the Employment Law Bar Association (to which Mohinderpal Sethi QC and Lucy Bone of Littleton Chambers contributed) whose reasoning was “A six-month time limit would allow sufficient time for early conciliation to take place without the need for any extensions and would be simpler for claimants to understand”. A majority also favoured adoption of the ‘just and equitable’ test for all claims as a fairer and more flexible approach.

Contractual Claims

A particular concern of the Law Commission was the fact that claimants currently might have to bring two sets of proceedings where there is a substantial contractual claim. This leads to additional cost for parties and a strain on precious Court resources. The proposed increase in the cap to £100,000 (which greatly outstrips inflation since the £25,000 limit was introduced in 1994) will mean than many such claims can be heard together with other employment claims in the Tribunal.

Contribution Claims

The current state of the law is that:

• Tribunals cannot apportion liability between co-discriminators (Hackney v Sivanandan [2011] ICR 1374).
• Respondents cannot seek contribution to an award from another party in the Tribunal (Brennan v Sunderland and Others [2012] ICR 1183, in which David Reade Q.C. and Niran de Silva appeared for different respondents).
• Therefore, one respondent might have to bear the whole of an award even where another respondent is liable.

With this potential injustice in mind, the Commission recommends that respondents should be able to seek contribution in the Tribunal from other respondents who are liable for the same loss. This is akin to the position in the Courts under the Civil Liability (Contribution) Act 1978.

Tribunals’ Relationship with the Courts

Significant restructuring of the tribunal service was not considered by the Law Commission. Its Report recognises that the Employment Tribunal is a specialist jurisdiction with different characteristics to Courts. Its recommendations would see Tribunals continue to have exclusive jurisdiction over many types of claims whilst also being granted increased powers. Although it remains to be seen which of these are ultimately implemented, the recommendations address existing issues pragmatically and had broad support amount those consulted.