What is the role of lay members of employment tribunals?

Consultant editor Darren Newman questions the wisdom behind the decision to add unfair dismissal to the list of jurisdictions to be heard by an employment judge sitting alone.

What is the purpose of lay members in employment tribunals? This is the question posed by an important change to the operation of employment tribunals that took effect on 6 April 2012. The Employment Tribunals Act 1996 (Composition) Order 2012 (SI 2012/988) has added unfair dismissal to the list of jurisdictions to be heard by an employment judge sitting alone.

The employment law jurisdictions in which cases are heard by a lone employment judge are set out in s.4 of the Employment Tribunals Act 1996. Hitherto the list was limited to what might be called the legalistic or technical side of employment law. Unlawful deductions from wages, minimum wage claims and claims for holiday pay are all on the list, as are claims relating to collective redundancy consultation and information and consultation in connection with TUPE.

Cases in the specified jurisdictions will be heard by an employment judge sitting alone unless there is a specific decision to hear the case in front of a full tribunal. The circumstances to be taken into account in deciding whether lay members are needed are the likelihood of a dispute arising on the facts, the wishes of the parties, and whether or not there are other proceedings being brought that can best be heard at the same time and for which a full tribunal is needed (such as discrimination proceedings).

As unfair dismissal has been added to the list, the default position is that unfair dismissal claims will now be heard by an employment judge sitting alone unless the judge decides that a hearing in front of a full tribunal is necessary.

The reason for the change is economic. Tribunal hearings with a single judge and no lay members are cheaper than hearings in front of a full tribunal, as well as being easier to schedule. When the reform was proposed by the Government in Resolving workplace disputes: a consultation (PDF format, 528K) (on the Department for Business, Innovation and Skills website), the response was largely negative, with respondents on both the employer and employee sides of the fence stressing the important contribution made by lay members to the perceived fairness of the system. Despite this, the Government was determined to press ahead and the change has now been made.

The Government claims that its reforms of the employment tribunals are aimed at reducing bureaucracy. But the inclusion of lay members in unfair dismissal claims is not bureaucratic; it is central to our system of employment law. The right to claim unfair dismissal is a key employment law right and both claimants and respondents have drawn reassurance from the fact that claims are decided not simply by a lawyer, but by a panel with practical experience of both sides of the employment relationship.

The main issue to be decided in the vast majority of unfair dismissal claims is whether or not the employer has behaved reasonably in dismissing the employee. That is not a legal point. It is a question of fact for tribunals to decide based on their knowledge and experience of the workplace. Decisions made by a judge sitting alone are less likely to command the respect of the losing side. That may make appeals more likely and can only be bad for the system.

People may think that, since most unfair dismissal claims involve disputes about the facts, the exercise of the discretion in favour of a hearing by a full tribunal will be so common as to be virtually automatic. However, we should not take this for granted. As the Employment Tribunals Act now contains a presumption that unfair dismissal cases will be heard by an employment judge sitting alone, it is unlikely that judges will act as though this presumption does not exist. As Parliament has now expressed the view that a lone judge should be the default position when it comes to unfair dismissal claims, it may be that it is only in special circumstances that employment judges will consider it right to order a claim to be heard by a full tribunal.

What we need to see now is some clear direction from the employment tribunal system, ideally in the form of a practice direction from the President of Employment Tribunals. This could set out clear criteria on which the composition of tribunals in unfair dismissal claims should be based. Without this, it is likely that considerable regional variations will develop, with some employment judges taking the view that the discretion should be exercised in a far wider range of circumstances than others. The system of case management will also have to be reviewed to take account of the wishes of the parties when it comes to the composition of the tribunal in any given case. Will we see an increase in case management discussions for unfair dismissal claims so that this issue can be considered? It may be that this change will cause more bureaucracy than it prevents.

Few observers believe that the employment tribunal system can continue without reform. However, changes should be based on a coherent vision of what an employment tribunal is for and how it should operate. It is difficult to detect any vision behind this change other than a short-term desire to save on the fees paid to tribunal members. At the time of writing, former President of the Employment Appeal Tribunal Mr Justice Underhill is drafting his recommendations for the reform of employment tribunal procedures following his "fundamental review". I can only hope that his recommendations chart a more coherent way forward than can be discerned in the current misguided erosion of the role of lay members.

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