FRU was invited to make a submission to the Dept. for Business, Energy and Industrial Strategy consultation on recommendations arising from the Taylor Review of Modern Working Practices.
Based on our experience of representing clients in around 200 employment cases each year we made the following points:
· There are particular barriers to enforcement of sick pay and for annual leave because problems generally occur while workers are still employed. Workers will often be concerned that if they make trouble for their employer they may be dismissed, receive less work or be punished in some other way. Workers are also discouraged by the disproportionate nature of the enforcement mechanisms, particularly where the sums involved are relatively small.
· There are advantages to businesses from moving towards state enforcement of such contractual payments;
ü Workers are likely to be emotionally involved and, in many cases, under informed about the relevant law, enforcement officials are likely to have a better understanding of the relevant law, as well as having experience of dealing with employers in these circumstances. This is likely to make disputes, particularly straightforward ones, easier, quicker and cheaper to resolve.
ü The fact that state enforcement can apply to many workers at the same time is also a potential advantage for employers. It is much easier and more efficient to have a single point of contact that can solve an issue for multiple workers, than attempt to deal with each worker individually.
ü There will also be a potential advantage for those employers who comply with the law through the creation of a level playing field, in that they will be less likely to face unfair competition from employers who fail to comply with their duties.
· Funding of employment law advice and tribunal representation would make a substantial difference. In their absence, the government should avoid creating barriers to claimants accessing the tribunal. This is important both for directly enforcing these rights. But it also gives some assurance that, if workers are mistreated because they try to enforce their rights, they have access to some recourse.
· It should also be noted that many workers who experience these issues do not know about the existing state enforcement mechanisms. Greater efforts to publicise those mechanisms is likely to increase reporting.
· There is a scandalously low rate of compliance with tribunal awards, which fundamentally undermines the efficacy of the employment tribunal process. The existing system for enforcement generally is too complex, opaque and relies on being driven by the claimant, rather than by robust case management in the same way as the rest of litigation. There is little point in having well-developed arrangements to adjudicate on employment rights if tribunal awards so frequently end up unpaid. It is particularly unfortunate that all of this occurs at the conclusion of the tribunal litigation. Many claimants simply drop out because they cannot face starting a new litigation process.
· A modern enforcement system would resemble a modern litigation process. Once failure to pay had been registered, someone — either a judge or quasi-judicial official — would take responsibility for the enforcement process and case manage it. Parties would have the opportunity to provide information and make submissions, but decisions would made about how the process would progress. And, where one approach failed, others would be tried. If ultimately, an award could not be enforced the process would lead into insolvency proceedings against the employer if appropriate (as well as an application for payments to be made in favour of the worker by the Insolvency Service under the guaranteed payments scheme in appropriate cases).
· It would be useful for the tribunals to have sufficient power to resolve the comparatively straightforward issues that may already be apparent at the point that the tribunal is dealing with the case. For example, it is common for smaller employers to have issues with paying an award immediately for reasons of cash flow. In practice, as is sensible, a court will allow them time to pay by instalments and this is also in the best interests of the claimant. It would be much simpler, cheaper and easier if this could be ordered by a tribunal at the remedies hearing, rather than requiring separate proceedings.