Post by nickd on Oct 6, 2011 20:58:50 GMT 1
How much of an influence are city hand shakes having in the reform of our justice system?
Shouldn't determination of employment awards be left to the courts; -rather than be dictated by the big city business boys?
The following extract from an article in the Independent and the second reading of the Tribunal (maximum compensation) awards bill gives a bit of an insight into just how much of an influence 'city groups' are having in what they perceive as a wave of spurious compensation claims in Employment Tribunal cases; - awards being unlimited in discrimination cases.
"Government advised to cap discrimination awards at £50k
City group fears open-ended compensation is catalyst for 'spurious' but expensive claims"
Mark Leftly - Independent on Sunday - 5th June 2011
An influential group of City grandees, led by Sir Michael Snyder, has told ministers that employment law must be overhauled, with tribunal awards for discrimination cases capped at £50,000.
At present, an employee who successfully sues for discrimination, be it racial, sexual orientation or gender, can get unlimited awards. There is a growing belief that this has led to employees without genuine grievances making discrimination claims.
Sir Michael, the former City of London Corporation policy chief, chairs the Government's professional services group. Christopher Satterthwaite, the chief executive of Chime Communications, Ian Powell, the chairman of PricewaterhouseCoopers and Steve Ingham, the chief executive of Michael Page International, are among the members of the 25-strong group.
It is understood that the issue has been discussed with a number of members of the coalition, including Chancellor George Osborne, the Business Secretary, Vince Cable, and the employment relations minister, Ed Davey. Mark Prisk, the business and enterprise minister, regularly attends the group's meetings.
Sir Michael said: "At present, claims for discrimination are occurring with monotonous regularity in situations that are clearly spurious. We also need to avoid excessive pre-tribunal settlements that some commentators have described as 'legalised extortion'."
The group has also suggested that should an employee lose a discrimination case, then they should pay some of the employer's legal costs, which can typically be about £35,000. The proportion could be just a small part of the employee's annual salary – not enough to put someone off making a genuine claim, but meaning that there is a financial risk in taking action with no grounds.
Here's how it was debated in the House of Commons on the 17th June earlier this year...
Tribunal (maximum compensation) awards bill
Mr Christopher Chope (Christchurch) (Con): I beg to move, That the Bill be now read a Second time.
This is a short Bill that would set a limit on compensation for awards for unfair or wrongful dismissal or discrimination arising out of employment and provides that that maximum limit should be £50,000. I propose this partly because I know that the Government are considering the matter, although they announced their review in May whereas my Bill was presented as long ago as 5 July 2010.
At the moment, there are strict limits on the awards that a tribunal can give in respect of claims for unfair dismissal arising from ordinary employment law. When the claim for unfair dismissal is based on discrimination, however, an unlimited amount of damages can be awarded. That is now leading to all sorts of farcical situations. The situation has been recognised by a group described by Mr Mark Leftly in The Independent on Sunday on 5 June as “an influential group” in the City,
“led by Sir Michael Snyder”
who have...
“told ministers that employment law must be overhauled, with tribunal awards for discrimination cases capped at £50,000”—
the exact figure proposed in my Bill. The article goes on to say that....
“an employee who successfully sues for discrimination, be it racial, sexual orientation or gender, can get unlimited awards. There is a growing belief that this has led to employees without genuine grievances making discrimination claims.”
People are making or threatening to make claims when they are faced with dismissal, saying that they will not go for the ordinary unfair dismissal but will base their claim on the fact that their dismissal has been on the grounds of racial discrimination or discrimination based on sex, gender or something similar. We are getting a two-tier system in which people threaten to sue in a tribunal for the much larger, open-ended awards that are available and my Bill would place a cap of £50,000 on all that.
Mr David Hamilton (Midlothian) (Lab): In the interests of clarity, can the hon. Gentleman tell us how many such claims have been unsuccessful? That would give weight to the argument that people are claiming just for a chance of getting some money.
Mr Chope: I have the figures somewhere, but I do not have them to hand this instant because I have a lot of papers. I hope the hon. Gentleman will forgive me for not answering his question, but the figures that I saw show that many claims are unsuccessful or not pursued, quite often because they are the subject of a settlement. Quite often the settlement is between unequal parties. The claimant has nothing to lose by taking the case to a tribunal but the employer is faced with substantial legal costs, plus disruption to his business, in defending his position. Those claims can end up being settled out of court, as it is called. They would probably be regarded by the hon. Gentleman as unsuccessful claims, but they might have been taken to the tribunal had it not been for the imbalance of power between the applicant and the employer.
www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110617/debtext/110617-0002.htm#11061742000498