The satisfaction of successfully representing a claimant in a tribunal can quickly have the glow taken off it when your client never receives the award made to them, even more so when the respondent has moved funds to avoid payment when this could have been avoided by taking action at an earlier stage. Following the cases of AA v Secretary of State for Business, Energy and Industrial Strategy and the Commission for Equality and Human Rights ("BEIS" and "CEHR") and Anwar v The Advocate General those representing claimants, particularly in Scotland, will have no excuse for not considering how to prevent a respondent from disposing of funds to avoid payment of a tribunal award and taking the necessary action to prevent it.
Both cases arise from an employment tribunal claim brought by Anela Anwar for harassment on the grounds of sex, race and religion. She was successful in her claims and the respondent was ordered to pay her £75,000 in compensation. Ms Anwar's representative got wind of the possibility of her former employer's business being shut down and its funds being transferred to another entity after the employment tribunal judgement was issued and obtained an interim interdict in Glasgow sheriff court. However, the bank account was so depleted that she did not receive any of the compensation.
Ms Anwar petitioned the Court of Session (AA v BEIS and CEHR) arguing that by failing to make statutory provision for the granting of diligence on the dependence (freezing of assets in England) by an Employment Tribunal, the UK was in breach of its Community law obligations to provide her with a remedy for her harassment claim that was compliant with the principles of effectiveness and equivalence. The EU principle of effectiveness is that procedural requirements for raising actions to enforce EU rights cannot be so excessively difficult as to render exercise of that right practically impossible. The principle of equivalence is that rules put in place to implement the EU law should be no less favourable than those governing similar domestic actions.
The petition was dismissed by the Outer House of the Court of Session. The court found that an action could have been raised for diligence on the dependence in either the Sheriff Court or the Court of Session at the time employment tribunal proceedings were commenced. Raising those proceedings was not excessively difficult or impossible. Nor had the principle of equivalence been breached on the basis that the opportunity to raise an action of diligence on the dependence would have been available whether her claim had been based on EU or domestic rights (such as an unfair dismissal claim).
Anwar v The Advocate General was an appeal against that decision - Ms Anwar now being named as a party as the Inner House of the Court of Appeal (who heard the case) no longer felt the anonymity order previously imposed by the Outer House was justified. The court considered four grounds for appeal. The first ground was that the Outer House had been wrong to find it was possible to obtain diligence on the dependence of an employment tribunal claim. That argument was rejected by the Inner House, but only on a majority basis. Although the majority agreed with the findings of the Outer House that diligence on the dependence could be obtained for an employment tribunal claim via a separate action to either the Court of Session of Sheriff Court, Lord Carloway dissented. In his judgement jurisdiction for matters concerning discrimination or harassment in the context of work was given exclusively to an employment tribunal and an action raised in either the Court of Session or the Sheriff Court would be "fundamentally incompetent".
The second ground of appeal was also rejected, again by a majority. They agreed with the Outer House that the procedures for claiming diligence on the dependence provide an effective remedy and do not breach the EU principle of effectiveness. An action for diligence on the dependence is relatively straight forward and inexpensive, and the ordinary courts are more familiar with the issues that routinely arise in such actions (concerning property and insolvency). However, once again Lord Carloway dissented. He felt failure to pay awards was most commonly because an employer simply refused to do so and were not primarily as a result of insolvency. Further, a claimant in a tribunal may well not instruct a lawyer whereas they would almost certainly need to do so to deal with diligence - this significantly impacted on costs, convenience and accessibility when compared to a tribunal claim rendering an effective remedy excessively difficult or practically impossible for many.
The third ground of appeal was dismissed unanimously by the Inner House. The Outer House had used the correct comparator when deciding if the principle of equivalence had been complied with. The final ground of appeal was that the EU laws had been inadequately transposed as they did not provide fully effective interim remedies. Given the Inner House had found that this was not the case, this ground was also dismissed.
The outcome of this case does not sit entirely comfortably with the findings of the Taylor Review which recommended that the process of enforcing awards should be simpler. In the Good Work Plan the UK Government announced the Employment Tribunal Project and the Civil Enforcement Project, both of which aim to simplify the process for enforcing unpaid awards. One of the aims of the projects is to signpost at the relevant time all of the enforcement options available so that "more people are paid what they are entitled to quickly and with the minimum of effort".
Given the dissenting opinion by Lord Carloway, the Lord President, it is possible this matter could still make its way to the Supreme Court. In the meantime, lawyers representing claimants should consider whether it is necessary to take protective measures in the civil courts when raising an employment tribunal claim.