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Third sector farce

Captains of industry being what they are, there is nothing that newspapers out to bash the employment tribunal system like better than a nice, cuddly charity boss.  Early last year, the Times gave Helen Giles, human resources director of the homelessness charity Broadway, a column of her own to expound her view that employment tribunals are ‘legalised extortion’. In a classic of anecdote-based policy advocacy, Giles justified this bold assertion with a tale of a recent dinner with a couple of other HR directors, both – both! – of whom had agreed that ‘however much effort was put into managing an organisation well, some staff will stick in a claim because they know it’s likely to be lucrative’.

This month, it’s the turn of ‘social entrepreneur’ and Liberal Democrat councillor Craig Dearden-Phillips, with a similarly anecdote-strewn but almost entirely fact-free column in Third Sector magazine. ‘Ask any charity chief executive over a glass of wine what they think about employment law as it stands,’ he confides, ‘and you’ll get the same answer: the system is a joke.  Employment law costs charities millions, causes massive stress and, saddest of all, rights few wrongs.’

Failing to grasp that the plural of anecdote is not ‘data’, Third Sector allows Dearden-Phillips to continue: ‘After a few glasses more, you’ll also get plenty of sarcasm about the system. It has become a lawyer-fest – 218,000 claims in 2010/11 in total, which is 44 per cent up on two years before.’ Well, yes, it is, but only if you count all the tens of thousands of claimants in the 5,900 multiple claim cases (very few if any of which will have been made against a charity, by the way).

The figure that really matters is the combined number of single claims and multiple claim cases. And that is five per cent down on two years ago.  Indeed, at 66,500 it is substantially lower than a decade ago, and slightly below the average over the years since (69,040).

Such figures also need to be seen in perspective. There are some 1.3 million employers in the UK economy. So 66,500 employment tribunal claims equates to about five claims for every 100 employers. Put another way, on average, an employer will face just one employment tribunal claim every 20 years. That hardly amounts to a ‘lawyer-fest’.

So, who are these wine-supping charity chief executives? Dearden-Phillips doesn’t say, and I guess they wouldn’t want us to know – their no doubt much-hyped claims to be ‘an equal opportunities employer’ might look a bit empty, should their real views on workplace rights become known. But Dearden-Phillips is in no doubt: ‘the third sector tops the league table for employment tribunals’. What, really? Ahead of the first (private) and second (public) sectors? I must have missed that HMCTS statistical bulletin.

The sad truth is that those clamouring for reform of the employment tribunal system are not too interested in facts, as the facts don’t support their case. As I’ve noted here previously, they are opportunists, taking advantage of the economic downturn to pursue an ideological, anti-regulation agenda. To borrow Dearden-Phillips’ own words: it feels like a farce. That’s because it is.

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