Report (3rd Day)

Part of Legal Aid, Sentencing and Punishment of Offenders Bill – in the House of Lords at 8:08 pm on 12th March 2012.

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Photo of Lord Bach Lord Bach Shadow Spokesperson (Justice) 8:08 pm, 12th March 2012

My Lords, the House will remember that we had a robust debate on this issue in Committee and some valuable contributions were made, particularly by the noble Lord, Lord Pannick. I shall refer to some of the points he made in a moment. Legal advice for employment law matters is used by around 15,000 people a year, and at current levels we spend £4 million on it, which works out at around £300 per advised person. This advice deals with issues such as unfair and wrongful dismissal, redundancy, contract disputes, discrimination, strike action, data protection and employee confidentiality, and wage issues such as when people are paid below the minimum wage. It goes without saying that these issues are of considerable importance to the individual and to the state.

Someone who is dismissed and is unable to get fair recompense or their job back becomes a burden on all taxpayers. It is one that most of us are willing to bear. Jobseeker's allowance is a safety net for precisely these kinds of people, but it is one that we should not bear unduly. Legal advice is valuable when attending a tribunal because the other side, that of the employer, is nearly always represented, certainly by a lawyer and often by counsel. The inequality of arms between a cleaner who is being paid below the minimum wage and their employer's counsel is substantial. There is an alternative to legal aid, of course-that of damages-based agreements. But those agreements are not yet widely available and they are not available at all for certain classes of case. Worse, they leave the most impecunious sometimes at the mercy of predatory claims managers.

In Committee, the noble Lord, Lord Pannick, outlined four particular concerns. First, he highlighted the importance of employment rights. He contrasted these with environmental pollution rights, which remain in scope. The second was the point about equality of arms and the injustices that flow from that. The third point was the illusory nature of the savings in that through state benefits we will essentially subsidise bad employers, who will not be brought to justice. His fourth point highlighted a perverse consequence of the Bill as it is now drafted. Given that discrimination remains in scope, we are going to see an awful lot of people tacking discrimination claims on to their dismissal claims. The noble Lord may remember that such a problem arose when defamation was not within the scope of legal aid but malicious falsehood was. That led to many legal aid cases being brought under the Trojan horse of malicious falsehood, where the most appropriate tort for that was defamation. That loophole was closed in 1999, but this Bill as drafted intends to reintroduce a number of what we would call perverse incentives, of which this is perhaps the most obvious.

As I have said, employment legal aid costs £4 million a year, but accepting this amendment will not cost £4 million a year. The amendment does not change the Government's ability to set their own budgets-rather, it is a statement of principle that employment law is important and complex, and that victims of abuse need redress and advice on how to seek that redress. EJ Cohen was cited the other day in aid of legal aid; he said:

"The State is not responsible for the outbreak of epidemics, for old age or economic crisis. But the state is responsible for the law. That law again is made for the protection of all citizens, rich and poor alike. It is therefore the duty of the State to make its machinery work alike for the rich and the poor".

Employment law exists to protect citizens-hard-working ones, often-from unfair and unlawful practice by employers. At its best, it evens up the natural imbalance between the rights of employers and those of employees. We did not create those laws out of folly, but because there was abuse after abuse which forced us to act. Many good employers are grateful for the fact that good, fair employment laws exist. However, despite these laws and the access to justice that was promised when legal aid was introduced for employment law, there remain-and the Government have to take this into account-some bad employers out there.

I hope that noble Lords have had a chance of seeing the citizen's advice bureau's very good briefing, Out of Scope, Out of Mind. It details some cases, one of which is this:

"Steve, a 59 year old man, was suffering from multiple health problems including arthritis of the knee and heart problems. The CAB helped him with various problems, including debt"- it will not be able to do that now-

"employment and benefits, under their legal aid contract. Steve was originally a manual worker, working on power lines, but was no longer able to carry out this work because of health problems. He was on statutory sick pay and then claimed employment and support allowance, but when he attended the medical he was found fit to work. He appealed twice but lost both times, with his benefits stopped. He could not get jobseekers allowance because he had not been made redundant. His employer told him this wasn't possible, as his job was still open. Based on advice from the CAB employment caseworker, Steve discussed options with his employer who agreed to him working part-time on lighter duties".

The moral of this tale, so says the CAB, is this:

"Had legal aid advice not been available to help Steve with his employer, he would have been left in limbo, unable to work and with no income, potentially leading to homelessness".

It could lead also to a much greater cost to the state.

That was a win-win. The employer was able to retain the experience of the employee and put him to good use-he got a job-and the state did not have to step in at the taxpayer's expense. In fact, through national insurance and income taxes, the state benefits. That is not a bad example, I hope the House feels, of how this kind of advice has so many broader benefits and saves so much more than it costs.

By these two amendments, we are attempting to ensure that mischief is subject to sanction and that employees of bad employers can assert their rights with the right advice and with a proper chance of succeeding. To fail to do so will create a burden on the state. It will essentially reward bad employers-for example, those who contravene the law by paying people less than the minimum wage, which still happens, or through other practices-and it will disadvantage good employers, the majority, who respect and value their employees.

It is hard not to see this proposal in this Bill as part of a general government policy to change the balance of employment law and to make it much more difficult for employees who have been wrongly treated to get justice. There are many examples that may be mentioned in the debate that follows, but to take £4 million out of legal aid to achieve this result seems to us on this side to be absolutely ridiculous. I beg to move.