Employment Tribunals: The Good, the Bad and the Ugly

About Jennifer HaworthJennifer Haworth

Jennifer Haworth is a senior associate in the firm’s Litigation & Dispute Resolution team. Jennifer has a wide practice in all aspects of civil and commercial litigation both in Bermuda’s courts as well as in mediation and arbitration.

Jennifer Haworth’s full profile on mjm.bm.

The employment tribunal system was established to provide an employee the regime in which to make a formal complaint that their employer has violated the Employment Act 2000 (the “Act”). The process was designed to encourage the parties to settle their differences wherever possible. If the parties cannot reach an agreement and there are reasonable grounds to suggest the employer may have violated the Act, the parties proceed to the Employment Tribunal for a hearing which lacks the sometimes daunting formalities of the courts. The trouble with the process in Bermuda is that over the course of the last several years, the Act has been interpreted in such a way as to limit the role of the Employment Inspectors, pushing many, if not all complaints, through to the Employment Tribunal. This erodes important principles of justice and the pendulum has swung so far toward due process for the employee that parties are no longer on equal footing.

Under Section 36, an employee has the right to make a complaint in writing to an Employment Inspector (through the Department of Workforce Development) that his or her employer has failed to comply with any provision of the Act in the preceding three months. Section 37(1) says: “where an Inspector (a) receives a complaint…or (b) has reasonable grounds to believe that an employer has failed to comply with… [the] ,Act, the Inspector shall, as soon as practicable, inquire into the matter.” The inclusion of the word “or” in Section 37(1) would seem to indicate that the Inspector has the ability to make inquiries even without a complaint having been received, but rather when he or she has reasonable grounds to believe that the employer has violated the Act. In practice though, it is the receipt of a complaint that initiates the process. The Inspector makes contact with the employer and requests the supply of particular information in order to conduct an inquiry. Then the Inspector invites the parties to participate in a conciliation process in an effort to bring about a settlement between the parties.

It is the next step in the process where the difficulty arises. Section 37(4) states:

    “Where the Inspector –

    (a) has reasonable grounds to believe that an employer has failed to comply with any provision of this Act; but
    (b) is unable to effect a settlement under subsection (3),

    he shall refer the complaint to the Tribunal.”

Given the inclusion in Section 37(4) of the Inspector having “reasonable grounds to believe that an employer has failed to comply…” one would expect that this would give the Inspector the ability to weed out claims which demonstrate no reasonable basis that there was a violation of the Act. Unfortunately, this is not the case.

In December 2013, Justice Simmons issued a ruling in Janice Fleming v Director of Labour and Training [2013] Bda LR 85 which has led to Section 37(4) being read as giving very little discretion or power to the Employment Inspectors at all. The Fleming case involved an application for judicial review made on behalf of the employee following a decision by the Employment Inspector in that case making a determination that the matter would not be referred to the Employment Tribunal. In Fleming, the complaint was made in January 2011 and while there were some attempts to mediate the dispute for approximately four months, the complaint was then allowed to sit with little or no action for some ten months despite several requests from the complainant’s attorney for updates. The parties then attempted settlement once more but when that failed, the Employment Inspector simply wrote to the complainant in February 2013 to advise that he had determined that the employer was not in violation of the Act.

The Fleming decision is, with all due respect, a confusing and at times contradictory decision. Suffice it to say, the Department of Workforce Development (formerly the Department of Labour and Training) has, wrongly in this writer’s opinion, construed Fleming to mean that Employment Inspectors do not have any power or discretion under Section 37(4) and therefore any employee who is unhappy following the conciliation process can insist on going to the Employment Tribunal.

In practical terms, this means that an aggrieved employee can make a complaint at no cost to them which then sets off a chain of events that the employer has no option but to participate in order to defend itself. The employer must participate in the investigation by answering questions and providing documents and information and must then participate in the conciliation process which, if ultimately unsuccessful, leads to a tribunal hearing. Of particular note is that if the complaint involves the employee having been dismissed, Section 38(2) of the Act shifts the burden of proof onto the employer to prove the dismissal was appropriate.

Our experience has been that a number of employers will seek the benefit of legal representation given the potential implications for their organisation as well as the time involved in navigating the process which distracts them from their day-to-day business. In contrast, the employees typically appear in person without legal counsel. The difficulty with the current system is that even a successful employer, who achieves a finding from the Employment Tribunal that they were not in violation of the Act, does not “win” because the employer is out of pocket for their legal expenses and time lost given that the Employment Tribunal does not have the power to award costs.

All of these aspects considered together illustrate a variety of problems and frankly, a system that is broken. While giving complainants their “day in court” is clearly important, justice requires that parties be on equal footing and access to court for the complainants has to be balanced against the ability to screen out unmeritorious and/or vexatious claims, which not only are costly for the employer, but also clog up the Department of Workforce Development and the Employment Tribunal.

Using the UK as an example, its employment tribunal system requires complainants to pay fees (£150-£250) in order to make their complaint and there is a hearing fee required (£230-£950 depending on the type of claim). In addition, the UK Employment Tribunal has the discretion to order costs in the form of the fees and/or damages to the employee or where a party or their representative has acted “vexatiously, abusively, disruptively, or otherwise unreasonably” in the bringing of or the conducting of the claim or when the claim had “no reasonable prospect of success”. Arguably, a filing fee in Bermuda could possibly lead an unmeritorious complainant to think twice. Indeed, claim fees would also help defray the costs of the Department of Workforce Development, something which would surely be advantageous. Also, if an unmeritorious claim was made and found its way to hearing, the Employment Tribunal, if it had the discretion to order costs in the same circumstances provided for in the UK, the unmeritorious complainant could be penalized for having wasted the time of both the Employment Tribunal and the employer.

In a recent case in which MJM was acting, an application was made to the Supreme Court to judicially review the decision by the Employment Inspector to refer a matter to the Employment Tribunal on the basis that there were no reasonable grounds of doing so. The Chief Justice in a ruling made on the papers refused the leave to issue the application for judicial review on the basis that judicial review was a remedy of last resort and that the more appropriate course would be to exercise the remedy available to the employer by attending the Employment Tribunal. Respectfully, this unfortunately did not address the chief concern in that case which was the irrecoverable costs the employer would be forced to incur by having to appear to defend itself before the Employment Tribunal for a complaint that should never have been referred. Although we were successful by the Employment Tribunal, the employer is still left out of pocket.

As long as the system remains as it is in Bermuda, with the Employment Inspectors not empowered with the ability to weed out unmeritorious and/or vexatious claims and the Employment Tribunal without the discretion to award costs, we have a Department which is largely funnelling claims rather than being able to actually deal with them, an Employment Tribunal which is being used unnecessarily and most importantly, a system which favours one party over another. Until such time as this issue is addressed, employers may be best served to settle claims as soon as possible in order to avoid the time, effort and costs of attendance at the Employment Tribunal. Unfortunately though, if the employee is determined to go to the Employment Tribunal even with a case without merit and where a very generous settlement offer is made, there will nothing an employer can do. Given the recent response from the Supreme Court, it would seem that the only way to adequately address the current state of affairs is by legislative amendment to correct the current imbalance between the parties and restore justice to the process.

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