EMPLOYMENT
TRIBUNALS IN THE CHANNEL ISLANDS—TIME FOR A CLOSER LOOK?
Vicky
Milner and Jessica Roland
The Employment (Jersey) Law 2003 came
into force in 2005, some six years behind Guernsey’s
equivalent regime. This article considers a number of decisions by the
Employment Tribunal and the Royal
Court and asks whether an independent review of
Jersey’s employment law and systems could be helpful
before further legislation is introduced, as has happened in Guernsey.
The article also considers the Guernsey model and how it differs from its counterpart in Jersey.
Introduction
1 In
the First Annual Review of the Jersey Employment Tribunal, 15 November
2006 (the “Jersey
Tribunal”) the then Chair described the nature of hearings before the
Jersey Tribunal as “similar to that of courts of law, but less formal and
less circumscribed by procedural rules”.
2 The
intention has always been that the process should be cheap, quick and
accessible, without the rigidity and complexity of legal proceedings in
other fora. However the lack of formal process has at times raised its
own conundrums, a prime example being the lack of a prescribed route for
appealing decisions of the Jersey Tribunal to the Royal Court of Jersey,
burdening potential appellants with the cost of investigating and developing
their own appeal procedures. This is now being remedied by the Judicial Greffe,
which hopes to issue an appeal procedure (and other Jersey Tribunal procedures)
in 2013, but it comes late in the day given that the Employment (Jersey) Law 2003 (“the EJL”) came into force
in 2005.
3 The
EJL provides well-known and widely-used remedies. Between 1 July 2005, when the
EJL came into force, and the beginning of 2012, the Jersey Tribunal received
more than 1,100 JET1 claim forms, lodged by employees seeking a remedy against
an employer or former employer. Given the Island’s
2011 population of 98,000, with a working-age population at that time of
approximately 65,000, the number of claims lodged seems high. During the same
period there were only three published appeals of decisions from the Jersey
Tribunal to the Royal Court. These cases have been important in highlighting strengths
and weaknesses of the system, including by confirming where the right approach
has been taken by the Jersey Tribunal, as in Jones v RBSI. The scarcity
of appeals may be attributable to the comparatively low value of Jersey
Tribunal claims, the heavy financial burden of such litigation and the
inability to recover costs.
4 The States of Jersey are under pressure
from within and outside Jersey to implement
additional employment legislation (such as maternity rights and
anti-discrimination measures). This article considers a number of decisions of
the Jersey Tribunal and asks whether an independent review could be helpful
before further employment laws are introduced. It also looks at
the Guernsey Tribunal system and whether it can offer any guidance for the
younger Jersey model.
The
jurisdiction of the Jersey Tribunal in
relation to criminal offences
5 The
purpose of the EJL is to—
“amend
and consolidate enactments relating to employers’ obligations to specify
terms of employment, the payment of wages, and the notice required to terminate
contracts of employment; to provide for compulsory minimum periods of leave and
rest time for employees; to provide employees with rights not to be unfairly
dismissed and to be paid a minimum wage; and to repeal and replace enactments
for the establishment and jurisdiction of Tribunals to hear and determine
employment disputes; and for incidental and connected purposes.”
6 Although
the EJL is primarily concerned with rights and obligations as a matter of civil
law, it also created a number of criminal offences.
7 On
27 October 2005, the Jersey Tribunal heard its
first constructive dismissal case, Huet v Harbour View. In that case
it also dealt with an offence under
Part 2 of the EJL, which deals with “Employment Particulars”. Part
2 requires an employer to provide an employee with a legally compliant
statement of employment terms (a “Statement”). Article 3 deals with
information to be included in a Statement while art 4 deals with changes to
Statements. Under art 9(1) of the EJL, an employer who fails to comply with the
requirements of arts 3 and 4 “shall be guilty of an offence and liable to
a fine of level 4 on the standard scale.”
8 The
Jersey Tribunal held—
“The
Tribunal finds that Mr Huet
was not given a copy of his contract signed on the 2 May 2005 as required by
Article 3 of the Law. This constitutes an offence under Article 9 of the Law punishable by a fine . . . It should be noted that
the Tribunal is empowered to levy a fine of up to £5,000 for this
offence.”
9 Was the Jersey
Tribunal so empowered? The Jersey Tribunal was created
specifically to deal with employment disputes: “individual employment
disputes” under art 86 of the EJL and also “collective employment
disputes”, as defined by the
Employment Relations (Jersey) Law 2007
(“ERL”). It has a civil jurisdiction to address matters such as
wrongful dismissal, statutory rights such as protection from unfair dismissal,
and certain trade union matters under the ERL. It is not a criminal court.
CI
Fire & Security v Browning
10 The
asserted power to impose fines was challenged before the Royal Court of Jersey
in 2008, following an appeal from the Jersey Tribunal. Browning was employed by
CI Fire & Security Ltd as an alarm engineer until his dismissal in 2006. He
brought a claim for unfair dismissal in the Jersey Tribunal, which claim
succeeded. In addition to awarding compensation of £8,640 in relation to
the unfair dismissal, the employer was ordered to pay a fine of £250 for
a “[f]ailure to notify change in terms of
employment” under art 4 of the EJL. The employer initially sought to
challenge both findings of the Jersey Tribunal, although ultimately only the
decision as to the fine was pursued to appeal.
11 Following
Att Gen v Devonshire Hotels Ltd, the Commissioner
noted that “The exclusive jurisdiction of the Attorney General over the
prosecution of offences in Jersey is clearly
established”. Any change to the common law of the Island,
in this regard, could only be made by a “clear, definite and positive
enactment” and not by ambiguous legislation.
12 In
light of the evidence presented to it, the court held that—
“there
can be no doubt that the Tribunal has no power to prosecute, convict and fine
offenders for offences created under the Law . . . [The] manner in which the
Tribunal appears to have exercised the powers of a criminal court that it had
assumed to itself, can only be described as extraordinary
. . .”
13 The
fine paid by the employer was ordered to be repaid by Social Security to the
employer. Subsequently all fines that had been imposed
on employers by the Jersey Tribunal were repaid by the States of Jersey.
14 In
her 2011/2012 annual report, the Chair of the Jersey Tribunal noted—
“Following
a decision in CI Fire & Security v Browning (2008), it has
not been possible for the Tribunal to impose fines upon employers who fail to
provide their employees with contracts of employment or wage slips. The
Tribunal is very concerned that these important and fundamental principles of
employment law should carry no sanction . . . It is hoped that the
Minister for Social Security will take appropriate action to address
this.”
15 This
seems a surprising statement. There is an existing sanction for breaches of the EJL
which carry criminal penalties: prosecution through the courts in the normal
way. Social Security officers already carry out a regulatory function under the
EJL by visiting businesses and requiring disclosure of employment contracts.
There is no reason why Social Security officers should not refer matters to the
Attorney General, just as civil servants enforce other laws and as would appear
to have been envisaged by P.55/2003—
“the
Employment and Social Security Committee will be empowered to appoint
Enforcement Officers to ensure compliance with the legislation where
appropriate . . . The Committee believes that this approach has been
seen to work well under both the Social Security and Health and Safety
legislation.”
The
jurisdiction of the Jersey Tribunal in
relation to persons other than employees
16 A
different jurisdictional issue arose in the Sutcliffe case. Mr
Sutcliffe worked for PBS Communications Ltd (“PBS”) during 2008.
Subsequently he lodged claims for a range of matters including notice pay,
outstanding fees, holiday pay and accommodation costs. An interim hearing was
convened as PBS’ response to the claim argued that Sutcliffe was an
independent contractor and not an employee. During the interim hearing the
Tribunal considered evidence on a range of matters relevant to employment
status, including the following—
·
Mr
Sutcliffe raised an invoice for his earnings at the end of each month;
·
he
was not registered for ITIS or Social Security purposes by the respondent
“because it considered him to be acting as a consultant and thus liable
for his own contributions”;
·
the
“managerial” tone of an e-mail from Mr
Sutcliffe to Mr Rylance, a
senior PBS employee;
· Mr Sutcliffe was treated in the same way as other
consultants who were engaged by PBS.
17 On
the basis of all of the evidence, not taking a regimented
“‘checklist’ approach” but considering the real nature
of the parties’ relationship, the Jersey Tribunal came to the conclusion
that Sutcliffe was an independent contractor and not an employee. Subsequently
the Tribunal held a directions hearing at which it adjudicated upon a range of
matters and ordered the matter to be set down for a final hearing “so that
the last remaining issues . . . for notice pay and the
respondent’s counterclaim, can be heard by the Tribunal”.
18 However,
as noted above, the Tribunal has a statutory jurisdiction. It is not empowered
to deal with general contractual disputes, other than employer-employee matters
falling within the scope of art 86. The maxims “la cour
est toute puissante” and “the court is master of its
own procedure” may be appropriate
in relation to the inherent jurisdiction of the Royal Court but are surely inapplicable
in the context of statutory bodies. One has to ask: on what basis did the
Jersey Tribunal form the view that it had jurisdiction to deal with the Sutcliffe
case, once it had concluded that there was no employment relationship?
19 In
this regard, the Tribunal must of course have an opportunity to address whether
or not it has jurisdiction in a particular matter before any decision can be
taken. In a 2012 case, the
respondent, Mr Pearce, declined to lodge a response
to the claim against him, on the basis that he had never been the employer of
the individual in question (Miss Garcia). An interim hearing was held by the
Tribunal at which the respondent did not attend. Evidence provided at the
hearing by Miss Garcia included a letter from the respondent in which he wrote
to Jersey’s Social Security Department
saying—
“. . .
I have offered employment to Miss Garcia on a full time basis commencing on the
23rd May 2011 . . .”
20 The
Tribunal held that Mr Pearce was
Miss Garcia’s former employer and declined an application for leave to
appeal. That application was renewed before the Royal Court, which noted that, inter alia—
“Mr Pearce
challenged the jurisdiction of the Tribunal on a number of grounds including
that he was not ‘a member of the Island of Jersey and its
dependencies’ and therefore he was not subject to its rules and
regulations. To become subject to such rules and regulations required, he said,
a voluntary act on his part. He told me it was for this reason that he had not
attended the hearings as to do so would have given the Tribunal jurisdiction
over him. He had attended the application for leave as ‘a child of
God’ whose jurisdiction was the only one he recognised.
At the same time he confirmed that he lived in Jersey.
”
21 Upholding
the Jersey Tribunal’s decision to refuse leave to appeal, given that the
appeal had no prospect of success, the Royal Court noted in passing art 95 of
the EJL. This provides that an offence has been committed where a statement is
made in proceedings before the Tribunal which is “false, misleading or
deceptive in a material particular”. The judgment invited the Tribunal to
consider whether the matter should be referred to the Attorney General “for
him to investigate whether an offence has been committed by Mr
Pearce”—again making the point that criminal matters are ultimately
ones for the Attorney General.
The
Guernsey perspective
The
development of legislation
22 The
Employment Protection (Guernsey) Law 1998 (the
“EPGL”) has been in force since January 1999 and was the subject of
a substantial review in 2004. Introduced in the hope that it would provide for
“swift, efficient, inexpensive, non-adversarial and non-legalistic” resolutions when it was approved by the States of Guernsey
in 1995, these principles were restated when the States of Guernsey looked
again at the EPGL in 2004.
23 In 2002, the then Board of Industry
commissioned Mr Peter Syson
(an independent employment law specialist) to review the EPGL which had been in
force for just over 3 years. His report of October 2002, along with the
consultation after it was published, formed the basis of the recommendations
that were subsequently put forward by the Commerce and Employment Department
(who by 2004 had replaced the Board of Industry as the Department with
responsibility for employment relations).
24 Generally,
the changes introduced as a consequence of the review increased the level of
protection for employees with, for example, the eligibility criteria being
reduced from two to one year of employment for most claims. Interestingly, this
is the reverse of developments in England,
where in April 2012 the UK
government increased the eligibility period from one to two years of
employment. It also heralded the introduction of the sex discrimination law,
and the one-person adjudicator system was replaced by the three-person
Employment and Discrimination Tribunal. However, unlike the system Jersey was to adopt subsequently, it has remained,
despite representations by various bodies, an entirely lay tribunal.
25 One
of the report’s proposals that was resisted by the Commerce and
Employment Department when it put its recommendations before the States, was
for the Tribunal to deal with wrongful dismissal claims up to £25,000.
The Commerce and Employment Department was unpersuaded that the Guernsey
Tribunal with its lay members should go beyond the statute into areas of pure
contract. Thus contractual claims were left outside of the jurisdiction of the
Tribunal and, depending on quantum, to the jurisdiction of the Petty Debts
Court (at the time with a jurisdictional limit of £2,500, now
£10,000) or the Royal Court.
26 Another
proposal which was rejected was for the compensatory award to be changed to a
more English approach so that—
“the
principle should be adopted of a basic award on fixed criteria, supplemented,
where appropriate, by a compensatory award in which contributory fault would be
taken into account. Mainland practice should be adapted in as simple a form as
possible to the Guernsey situation.”
27 This
was rejected as unnecessarily complex in favour of
increasing the base award from 3 to 6 months, with the facility for the
Tribunal to reduce the award. As observed by Collas,
Deputy Bailiff (as he then was), in the case of Good v
Credit Suisse Guernsey: “The States’ objective was to retain the
simplicity of the Tribunal procedure without adding complexity to it.”
28 Unlike
its Jersey equivalent, the States of Guernsey
has generally resisted interfering with the EPGL along the way and other than
the changes that were introduced in 2005 after the review, and some other minor
changes that were introduced when the Sunday trading law came in 2002, there
have been no substantive amendments. However, of note is that following the
enactment of the Minimum Wage (Guernsey) Law
2009, the Tribunal now has jurisdiction over such claims.
The
treatment of the decisions of the Tribunal in the appellate courts
29 After
an initial flurry, with appeals limited to questions of law, relatively few
decisions have been appealed. If one looks at the views of the appellate courts
on the decisions of the Tribunal as in indicator of the efficacy or otherwise
of the decision-making body, then one must conclude that the Guernsey Tribunal
system has been a success story.
30 In
the first appeal against a decision of the Tribunal in Milford v Seaward Marine Ltd, Carey, Bailiff expressed most robustly his concern about
the proposals underpinning the EPGL stating—
“With
all respect to the then members of the Board of Industry I consider it at best
naïve and at worst grossly misleading to suggest that disputes between
employer and employee can generally be disposed of in a non-adversarial manner.”
31 However,
overall, when considering appeals, the Royal Court has been at pains to
distinguish the Tribunal from a court and has cautioned against an
“overly critical or analytical” approach to the judgments of the Tribunal.
32 On
only one occasion has the Court of Appeal had to consider leave to appeal from
the Royal Court,
and the distinction of the forum from a court was unequivocal. Southwell, JA sitting as a single judge of the Court of
Appeal held—
“It
is apparent from the terms of the 1998 Law that the adjudication procedure is
not intended to mirror that of the Royal
Court, and is intended to be less formal, less
legalistic and speedier. The complainant’s rights are
to be determined with the reasonable speed and efficiency which is consistent
with giving each party a reasonable opportunity to be heard by the
adjudicator.”
33 This
has meant that the Royal Court
has given the Tribunal considerable leeway when it has considered its
decisions. For example, even where the Tribunal’s line of reasoning has
given the court some difficulty in understanding its judgment, the court has
been prepared to interpret the Tribunal’s decision on the assumption
that:
“the
Tribunal knew how to perform its functions and what matters to take into
account, unless the contrary can be demonstrated. What matters is whether the
Tribunal has correctly understood the law, addressed the right questions and
reached its decision by permissible means.”
34 In
Burford v Flybe, the then Deputy Bailiff stated—
“In
my opinion, the right of appeal on a point of law conferred by the 1998 Law
must be read in the spirit of the legislation. I do not think it would be right
to allow a party who has succeeded before the Tribunal to pursue an appeal on a
point of law simply because he or she alleges that the Tribunal reached the
right decision but for the wrong legal reasons.”
35 The
Guernsey system is a deliberately
straightforward system, which has lost sight neither of the original ethos of
the EPGL, despite the frequent presence of lawyers for both sides, nor the
initial concerns of the judiciary. The issues that have troubled the Jersey
system have perhaps not been as evident in Guernsey
because of the more limited nature of the Tribunal’s powers. However,
with the States of Guernsey currently promising to bring into force in 2014
significant rights to maternity and paternity allowances, and the prospect of
disability discrimination laws in the next few years, whether these principles
can remain realistic is debatable.
Conclusion
36 Unlike
Guernsey, the powers of the Jersey Tribunal
are considerable. Its financial remit was significantly extended by the Employment (Awards) (Amendment) (Jersey)
Order 2011 and is now effectively uncapped. The paucity of appeals to the Royal Court means
that the Jersey Tribunal operates with minimal supervision or judicial
guidance.
37 It
is now more than 7 years since the EJL came into force. Since that time there
have been 7 amendments to the EJL, as well as changes to subordinate
legislation. As Stephanie Nicolle, QC might have said: “Though [statutory
employment protection came late to Jersey],
when it came it came in an overpowering wave”.
38 Laws
to provide new maternity/family friendly rights and protection from
discrimination are on the agenda of the Social Security Department. While
arguably such measures are overdue, Jersey is
in the grip of a recession with the highest rates of unemployment ever seen on
these shores. There are ongoing discussions between different States of Jersey
departments and industry associations about how the Island
can best achieve a reasonable balance between the rights of individuals and the
needs of businesses. In autumn 2012, the local branch of the Chartered
Institute of Personnel & Development conducted a survey in which it asked:
“Do you believe the employment law needs to be reviewed prior to any
further legislation being introduced?” 82% of the 220 respondees
said “yes”. As the Social Security Minister has commented (with
more than a hint of “turkeys don’t vote for Christmas”),
perhaps this response was inevitable given that the majority of respondents are
likely to have been employers. Nonetheless, the number of responses to the
survey was higher than for most Jersey
employment consultations and the fact that the voices are those of one sector
of the community does not justify ignoring them. In any event, it would seem
common sense to review the systems in place, as happened in Guernsey,
before introducing substantial new legislation, not least given some of the
jurisdictional issues that have arisen to date. Among other things, a more
accessible appeals process would encourage scrutiny of the current system,
assisting in the development of a robust body of case law.
Vicky Milner is an advocate with Bedell Cristin, and Jessica
Roland is an advocate with Mourant Ozannes.