Employees need longer to lodge claims, compensation limits should be raised and workers who haven’t employee status should have access to employment tribunals, according to a Law Commission report that could pave the way for much-needed labour rights reforms.
The Commission also decided not to recommend allowing appeals against union recognition decisions to be heard by the Employment Appeals Tribunal. This could have left recognition bids, which are already subject to a cumbersome process, bogged down in the legal system for longer.
The Law Commission’s role is to review areas of the law in England and Wales that might need reform. While its conclusions are not binding, the government is committed to responding in full its proposals within a year and typically two-thirds of its suggestions are taken up.
In this most recent report, the Commission backed a number of important TUC policies.
The Commission proposed a uniform six-month time limit for bringing all types of employment tribunal claims.
The current three-month time limit for many employment tribunal claims is insufficient for most people to respond to something that is likely to have given them considerable stress, the TUC has argued.
Internal workplace procedures might not have been completed and they need time to consult lawyers and trade unions and sort out their finances. Many will also be unaware of the limit.
The Commission also backed giving tribunals discretion to extend time where it is “just and equitable” to do so.
Currently, the time limit for certain claims – including unfair dismissal – can only be extended where it was “not reasonably practicable” for the claimant to meet the time limit, which is a significantly higher bar.
Breach of contract claims
The Commission has recommended widening employment tribunals’ jurisdiction to include breach of contract claims that arise during employment.
Currently, tribunals can only hear contract claims that arise or are outstanding when someone leaves a job.
This, the TUC has argued, is too limited because an employee would have to resign and claim constructive dismissal to have their claim heard in an employment tribunal.
Employment tribunals should be able to hear claims, from claimants, relating to the employment relationship/contract between the individual and the employer.
The current enforcement landscape is confusing for prospective claimants as it leads to some disputes being litigated partly in employment tribunals and partly in the civil courts.
The Law Commission has proposed giving employment tribunals the power to award damages in breach of contract claims of up to £100,000, up from £25,000 now.
This is a partial win for the TUC.
The £25,000 figure dated back to 1994.
Its low level led to many claimants bringing cases in both the civil courts, where pay-outs can be higher, and the tribunal.
To make matter worse, a £25,000 win in the tribunal could halt their prospects in the civil courts.
However, we recommended there be no financial restriction on employment tribunals’ contractual jurisdiction, whereas the Commission plumped for a £100,000 limit.
The Commission has recommended that employment tribunals be allowed to hear breach of contract claims relating to workers other than employees, but not in relation to genuinely self-employed independent contractors.
This is an important step forward for so-called limb (b) workers, many working for platforms or in other parts of the so-called gig economy.
As the TUC has argued, workers are more likely to be low paid and in insecure employment. So they need a relatively low cost, informal route to enforcement.
The Commission has reversed its initial stance and concluded that tribunals should have the jurisdiction to hear complaints by employees that they are working hours in excess of the maximum limits.
This is important because the TUC argued for reform.
We pointed out that currently rights relating to the 48-hour week, the night work limit and the entitlement to a health check for night workers can only be enforced via an enforcement agency, the Health and Safety Executive.
This contrasted with rights relating to minimum holiday entitlements and daily, weekly and in-work rest breaks which can only be enforced via employment tribunal.
We noted the abundant evidence that workers are not able to enforce their working time rights effectively.
It is not an issue that enforcement agencies enforce proactively. We noted, in evidence cited by the Law Commission in its report, that local authorities, who enforce the rules in retail, offices and gymnasiums, don’t realise that enforcement is their responsibility.
In a notable win for unions, the Law Commission has proposed no change to the current situation where a decision of the Central Arbitration Committee regarding union recognition can only be challenged via a judicial review.
The TUC and a number of our affiliated unions argued strongly that allowing appeals to the Employment Appeals Tribunal would create uncertainty, especially for trade unions running statutory recognition campaigns.
The legal process for obtaining statutory recognition is already overly bureaucratic, lengthy and poses significant obstacles for unions seeking to represent their members.
Allowing appeals to the EAT would further undermine the fundamental right to freedom of association