Discrimination complaints - the new regime: Part 2
In the second of three features on the new discrimination complaints regime, Michael Rubenstein looks at the new tribunal rules.
The Employment
Tribunals (Constitution and Rules of Procedure) Regulations 2004* came into
force on
They are an integral part of the government's new regime for resolving disputes. The regime includes the statutory grievance procedures and statutory dismissal and disciplinary procedures set out in the Employment Act 2002 (Dispute Resolution) Regulations 2004, discussed in part 1 of this article. They provide the mechanism for ensuring that tribunal claims are not brought until the new statutory procedures have been implemented. The new rules, which replace the rules of procedure in the 2001 Regulations, apply to all complaints of unlawful discrimination. Also on 1 October, the new procedures relating to equal value claims came into force.
Making a claim
The new system requires greater clarification
of the claim at an early stage. The applicant is now known as the "claimant"
and all claimants will have to use a standard prescribed claim form - ET1 -
with effect from
A claim must be presented to the employment tribunal in writing and must contain certain required information set out in rule 1(4). This includes the claimant's name, address, the name of the person against whom the claim is made (the "respondent") and their address, and "details of the claim".
In the case of an employee, the claim must also state "whether or not the claim includes a complaint that the respondent has dismissed the claimant or has contemplated doing so" (if that is the only complaint, the statutory grievance procedure does not apply). Then come the two key requirements. Rule 1(4)(h) specifies that the claim form must include "whether or not the claimant has raised the subject matter of the claim with the respondent in writing at least 28 days prior to presenting the claim to an employment tribunal office" and rule 1(4)(i) provides "if the claimant has not done as described in (h), why he has not done so".
This is the link to s.32(2) of the Employment Act, which provides that an employee "shall not present a complaint to an employment tribunal" if it concerns a grievance in respect of which the statutory grievance procedure applies and the employee has not completed the first step in the procedure. This step is a requirement that before submitting a tribunal complaint, the employee must write a letter setting out their grievance and then allow 28 days. The claim form asks specifically whether the complaint has been put in writing to the respondent and, if it has, the date it was put to them in writing.
*SI 2004/1861 www.legislation.hmso.gov.uk/si/si2004/20041861.htm.
Acceptance conditions
Under the new procedure, claims will not be accepted by the tribunal office in certain circumstances. A claim that is not accepted is not served on the prospective respondent and is not considered on its merits.
Rule 3 sets out the circumstances when a claim will not be accepted. The initial screen will be carried out by the tribunal office. The rule provides that the Secretary of the tribunal "shall not accept the claim (or a relevant part of one) if it is clear to him that one or more of the following circumstances applies -
(a)the claim does not include all the relevant required information;
(b)the tribunal does not have power to consider the claim (or that relevant part of it); or
(c)s.32 of the Employment Act (complaints about grievances) applies to the claim or part of it and the claim has been presented to the tribunal in breach of subsections (2) to (4) of s.32" - ie the employee must have complied with the first step of the statutory grievance procedure and at least 28 days must have elapsed.
From
In all other cases, if the Secretary decides that it is clear that the acceptance conditions have not been complied with, the claim will be referred to a tribunal chairman, who will then decide whether the claim can be accepted into the system, by reference to the same criteria as were applied by the Secretary. This includes cases where the statutory grievance procedure has not been followed. If the chairman decides that the claim should not be accepted, the decision and reasons will be recorded in writing and sent to the claimant. Rule 3(7) provides that where a chairman has decided that a claim should not be accepted, such a claim "is to be treated as if it had not been received by the Secretary on that occasion".
If the tribunal declines to register a claim because it has not complied with the pre-acceptance criteria - in that the employee had not submitted a grievance in writing to the employer and allowed 28 days in accordance with the statutory grievance procedure - this will trigger an automatic three-month extension of the time limit from the date on which it would otherwise have expired (usually three months from the alleged act of discrimination). When the claim has not been accepted in such circumstances, the claimant can then submit their grievance to the employer (which must be within 28 days of the date when the normal time limit would have expired), wait the requisite 28 days and then resubmit their complaint to the tribunal.
A decision not to accept a claim is subject to review on grounds that the decision was wrongly made as a result of an administrative error or the interests of justice require such a review.
Conciliation
The new Rules of Procedure introduce a fixed period of conciliation. However, this does not apply in respect of any claim brought under any of the discrimination statutes.
Responding to a claim
The response to a claim (previously called
"notice of appearance") must reach the tribunal office within 28 days of the
date on which the respondent was sent a copy of the claim by the tribunal
office. Like the claim form, from
If the respondent wants to resist the claim, rule 4 provides that the response must stipulate "on what grounds". The respondent may apply for an extension of the 28-day time limit for the submission of the response. The rules in respect of this are much stricter than under the previous rules. Such a request must be presented within 28 days of the date when the respondent was sent a copy of the claim and must provide an explanation as to why the respondent cannot comply with the time limit. This request will then be considered by a tribunal chairman, but will only be granted if the chairman is satisfied that it is "just and equitable" to do so in the circumstances.
Rules 5 and 6 provide that the response, like the claim, will be subject to acceptance conditions. These are analogous to those discussed above in respect of the screening procedure for a claim. Where a response is not accepted, the tribunal will inform the respondent "of the consequences for the respondent of that decision". This may include a default judgment.
Default judgments
Rule 8 introduces a system of default judgments, whereby the tribunal may determine a case without a hearing if the employer has failed to comply with the relevant time limit for presenting a response.The new rule allows a chairman to deliver a written judgment without either the claimant or the respondent being present in a case where no response has been presented to the employment tribunal office within the relevant time limit, or a response has been presented but it has not been accepted, and no application to have that decision reviewed has been made. Whether to issue a default judgment is a matter for the chairman's discretion: "if he considers it appropriate to do so".
A default judgment can decide either liability alone, or both liability and remedy. Rule 8(3) stipulates that "if a default judgment determines remedy it shall be such remedy as it appears to the chairman that the claimant is entitled to on the basis of the information before him." However, in order for a default judgment to be issued in respect of a remedy, the financial losses claimed would have to be set out in the claim form in more detail than is normally the case.
Either party has the right to apply to have a default judgment reviewed under rule 33. Applications to have default judgments reviewed have to be made to the tribunal office within 14 days of the judgment being sent to the parties, although this time limit may be extended on just and equitable grounds. Rule 33(2) provides that the application "must state the reasons why the default judgment should be varied or revoked". When it is the respondent applying to have the default judgment reviewed, the application must include with it the respondent's proposed response to the claim, an application for an extension of the time limit for presenting the response and an explanation for why the rules relating to a response were not complied with.
Rule 33(5) sets out the circumstances in which a default judgment may be revoked. These allow a chairman to revoke or vary all or part of a default judgment "if the respondent has a reasonable prospect of successfully responding to the claim or part of it". This is likely to be an important limitation on the use of default judgments, and on their impact. Suppose a large employer with a well-established equal opportunities policy is a few days late in entering a response to a claim that they discriminated on grounds of religion against a particular applicant. A chairman might hesitate in making a default judgment against the employer, where the inevitable result would be to set in a train a review hearing, with a high likelihood of a further hearing on the merits, once the employer's proposed response to the claim was considered.
Under rule 9, an employer that has not responded, or whose response has been rejected, will not be allowed to take any part in the proceedings, subject to several exceptions, the most significant of which is to make an application for a review of the tribunal's decision.
Hearings
Under the new regime, there are four different types of hearings. These are set out in Rule 14: "a case management discussion", "a pre-hearing review", "a Hearing" and "a review hearing" (the last of which is discussed above).
Case management
The new rules allow a chairman to make directions to the parties "in relation to any matter which appears to him to be appropriate". Rule 10(2) lists examples of possible case management orders, such as orders relating to time limits, provision of additional information, disclosure of documents, written particulars, and attendance. A failure to comply with an order or a practice direction can result, in accordance with rule 13, in a costs or preparation time order, or the striking out of a claim or response (see below).
Rule 17 gives the chairman the power to hold a case management discussion "as a means of ensuring the smooth running of a case through the tribunal system", as the Department of Trade and Industry guidance puts it. Case management discussions are interim hearings to address matters of procedure and management of the proceedings, similar to a case management conference applicable to civil proceedings. They can be held in private.
Pre-hearing reviews
Rule 18 allows a chairman to order a pre-hearing review. These are interim hearings at which a chairman may determine interim or preliminary matters, issue directions, order payment of a deposit, or consider any oral or written evidence. Rule 18(5) provides that although the pre-hearing review is mainly to determine matters of a preliminary nature, it will be open to a chairman at this stage to make a ruling to strike out or dismiss proceedings, so that a full hearing will be unnecessary. In accordance with rule 18(7), this includes striking out a claim or response on grounds that it is "scandalous, or vexatious or has no reasonable prospect of success", on grounds that "the manner in which the proceedings have been conducted by or on behalf of the claimant or the respondent (as the case may be) has been scandalous, unreasonable or vexatious", or for "non-compliance with an order or practice direction".
Hearing
A Hearing (which the rules always describe with a capital "H") is a full Hearing that determines any matter not already disposed of at a pre-hearing review or case management discussion, or disposes of the proceedings altogether.
One interesting aspect is that Rule 27(4) allows the tribunal to "exclude from the Hearing any person who is to appear as a witness to the proceedings until such time as they give evidence if it considers it in the interests of justice to do so".
Orders, judgments and reasons
Under the new regime, tribunals now issue "judgments" and "orders". Judgments are defined as "a final determination of the proceedings or of a particular issue in those proceedings". An order relates to interim matters and "will require a person to do or not to do something".
A "judgment" is now very much a term of art. It does not contain reasons, as is made clear by rule 30. On the contrary, rule 30(3) stipulates that written reasons will only be provided where the reasons are requested by one of the parties "either orally at the hearing (if the judgment is issued at a hearing), or in writing within 14 days of the date on which the judgment was sent to the parties", or if requested by the Employment Appeal Tribunal. Even where a judgment is reserved, all that has to be sent to the parties is a "written judgment". This suggests that the "judgment" itself will say little more than words like "the applicant's claim that they were discriminated against is dismissed."
This represents a major change as far as the discrimination jurisdictions are concerned, where written reasons were standard.
Costs
The Employment Act 2002 made several
significant changes to the rules on costs (or expenses as they are termed in
The costs rules distinguish between costs awards to a party (called the "receiving party") that is legally represented and those that are not. Costs awards can only be made in favour of a party who is legally represented. Costs, for this purpose, mean fees, charges, disbursements or remuneration incurred by or on behalf of a party. Parties that are not legally represented can receive a preparation time order (see below).
"Legally represented" is defined as "having the assistance of a person (including where that person is the receiving party's employee)", who is legally qualified. The definition includes "in-house" lawyers, solicitors and barristers.
A costs order can be made in favour of a party only where they have been legally represented, either at the Hearing, or, if there is no Hearing, when the proceedings are determined. Rule 38(4) adds that a costs order may be made against a party (called the "paying party") that has not had a response accepted in the proceedings in relation to the conduct of any part which he has taken in the proceedings.
Rule 40(3) provides that a costs order must be considered in circumstances "where the paying party has in bringing proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived". In addition, a tribunal or chairman may exercise discretion to make a costs order where a Hearing or a pre-hearing review has been postponed or adjourned, or where the paying party has not complied with an order or practice direction.
The amount of a
costs order will be determined in accordance with rule 41. The tribunal may
specify the sum payable where that does not exceed £10,000; the parties may
agree costs between themselves; or the tribunal may order the paying party to
pay the receiving party the whole or a specified part of the receiving party's
costs with the amount to be determined by way of detailed assessment in the
county court. In such a case, the amount can exceed £10,000. The rules now make
clear that the tribunal "may have regard to the paying party's ability to pay"
when considering whether a costs order should be made or how much that order
should be. This overrules the effect of the Court of Appeal's decision in Kovacs v
Preparation time orders
The new possibility of obtaining a preparation time order only applies where the receiving party has not been legally represented either at the Hearing, or if there is no Hearing, when the proceedings are determined.
Preparation time is defined by Rule 42(3) as "time spent by - (a) the receiving party or his employees carrying out preparatory work directly relating to the proceedings; and (b) the receiving party's legal or other advisers relating to the conduct of the proceedings; up to but not including time spent at any Hearing." Thus, this includes preparation time spent by the party's advisers, including any who are legally qualified. There is no requirement that the adviser should have actually charged the receiving party.
The circumstances in which a preparation time order will be considered directly mirror those for a costs order discussed above. However, a preparation time order and a costs order cannot be made in favour of the same party in the same proceedings.
The number of hours spent on preparation time will be assessed by the tribunal based on information on time spent provided by the party concerned, and on the tribunal's own assessment of what it considers to be "a reasonable and proportionate amount of time to spend on such preparatory work and with reference to, for example, matters such as the complexity of the proceedings, the number of witnesses and documentation required".
The assessed hours
for preparation time will be paid at an hourly rate of £25, subject to a
maximum of £10,000. The hourly rate will increase to £26 for the year
commencing
Wasted costs order
One of the novel changes in the new Rules of Procedure is the potential personal liability of representatives for costs. Rule 48 provides that a tribunal or chairman may make a "wasted costs order against a party's representative".
This is an order that will force the representative of a party to meet part or all of any costs incurred by a party "(a) as a result of any improper, unreasonable or negligent act or omission on the part of any representative; or (b) which, in the light of any such act or omission occurring after they were incurred, the tribunal considers it unreasonable to expect that party to pay". The provisions are similar to those applying in the ordinary courts under the Civil Procedure Rules. Note that the wasted costs order is not a punishment for an unruly representative. It is not sufficient for the tribunal to find that the representative's conduct was improper or unreasonable, etc. In order for a wasted costs order to be made, it will have to be shown that the other side incurred costs as a result of this conduct.
"Representative", for the purpose of this potential liability, covers a party's "legal or other representative or any employee of such representative, but it does not include a representative who is not acting in pursuit of profit with regard to those proceedings". This fairly narrow definition will exclude trade union officials and voluntary advice workers, as well as in-house legal officers. It will cover barristers, solicitors, and employment law consultants, including those who work on a conditional fee basis.
As in relation to costs orders and preparation time orders, the representative's ability to pay costs will be taken into account in considering whether a wasted costs order should be made and the amount of the order.
Wasted costs orders will inevitably be fiercely contested and, like much else in the new rules, seem certain to spawn satellite litigation.
