Israel and the US are not included for costs of pursing claims as contingency fees are the norm. Singapore and US are excluded as far as scenario 1 is concerned as claims are either unavailable or unlikely to result in compensation respectively.
It should be noted that in scenario 2, in China, Mexico and Singapore, the available claim against the employer is for wrongful constructive dismissal only so not an equivalent comparator with the discrimination/harassment claims in other jurisdictions. We have therefore excluded them from the comparative charts for scenario 2.
These graphs highlight the practical obstacle of affordability for claimants in some jurisdictions in enforcing rights as well as the costs for employers in defending clams. It illustrates the huge disparity in affordability between different countries as well as, in some but not all cases, the huge difference in costs in enforcing or defending more complex cases in comparison to simpler cases.
Legal aid is not available to claimants in most cases, but it is available in several countries. Usually this is means tested, and it can be available making the enforcement of rights much more realistic. China, Germany, Israel, the Netherlands, New Zealand, Korea, Spain and Switzerland are examples of places where legal aid is realistically available. Mexico has a system of public defenders available to employees.
Assistance can also be available from human rights or equality commissions in discrimination cases, such as our scenario 2. New Zealand is an example where funding is readily available through the Office of Human Rights Proceedings. In countries such as the UK and Ireland funding is theoretically available but limited resources mean that claimants can rarely call on support unless an issue of public importance is at stake.
In the US, Mexico and Israel, contingency and success fees are common - reducing the potential costs to claimants but resulting in any award of compensation being split with the lawyers. Occasionally, in some jurisdictions, potential claimants may benefit from insurance which covers their legal fees.
The successful party can, in some places, recoup at least of some of the costs incurred from the unsuccessful party, but this is almost always far less than the actual costs incurred. Examples include Belgium, Canada, Hong Kong, Denmark, Israel, Italy, Netherlands, New Zealand, Poland, Spain, Sweden and Switzerland. In a handful of others such as China and Britain, costs are theoretically available but only awarded in exceptional circumstances.
Recouping costs can be a double-edged sword for claimants. On the one hand, the ability to claim one’s own costs if the case is successful (even if only in part) can encourage claimants. However, on the other hand, for a claimant this may represent a significant disincentive to enforce their rights if reimbursing even part of an employer’s legal costs might be prohibitive.
In almost all cases, labour courts are public. Israel is an exception as is Singapore for claims brought in the ECT. However, there is an increasing tendency around the world for hearings to be conducted by video instead of in person though, to date, the practice is variable.
For both parties, a deterrent to litigation is the significant reputational risk caused by the public nature of the hearing. This is particularly an issue in cases such as our scenario 2, where allegations of harassment may attract considerable press or public interest – and potentially damage the employer’s reputation even if the claim is successfully defended. In most cases, all full judgments are also published on a publicly accessible database, meaning that it is possible to search for cases involving particular employers months or even years later. This is the case in countries such as Canada, New Zealand, Ireland and the UK. On the other hand, France and Hong Kong are examples of places where only a few tribunal judgements are currently available on a publicly available database. Steps are being taken in France to extend this eventually to all tribunal judgement but even then without the names of natural persons. So, in our two scenarios, the names of the employer would be published but not the names of the clamant bring the claims.
One barrier to an effective dispute resolution of employment cases is the time it typically takes from filing a case to proceeding to an outcome.
This varies significantly, and largely reflects the country’s approach to more complex procedures such as mandatory disclosure or advance exchange of witness statements. The delays in the system in Britain have increased significantly in recent years, with backlogs related to the covid-19 pandemic and a lack of resources for the tribunal system. However, the British delays are not the longest. Even simple cases like scenario 1 can typically take two years in Canada, and more complex cases like scenario 2 typically take three years in Poland. Such delays are a real barrier to effective enforcement of rights whatever the substantive law might say.
Whilst the delay to a hearing in a case like scenario 1 is typically only a couple of months in countries such as Netherlands, Korea and Australia, it will typically be 18 months or more even for a simple case in countries like Sweden, Israel, Canada and Belgium. In our scenarios the wrongful dismissal claim in scenario 2 would often be heard in Singapore (ECT) within a couple of months.
More complex cases predictably can take much longer in many countries to get to a hearing as shown with our second scenario. Poland, the UK, Ireland, Hong Kong and Australia are examples of much longer delays in complex cases. In some other countries, however, these more complex cases take no longer to get to a hearing than the simpler cases. Once parties get to a hearing, the likely duration of that hearing also varies.
In scenario 2, the typical hearing length varies greatly, reflecting the very different approaches in different countries. In some countries, even a sexual harassment complaint of this nature will be heard in half a day or less – Belgium, Germany, Italy, Netherlands and Switzerland are examples. At the other extreme in Australia, Canada, Hong Kong, Israel, Poland, Britain and the US, a case of this kind typically takes four or five days or even longer. It is no surprise that in those countries the legal costs are generally much higher.
In scenario 1, the variation is somewhat less pronounced. The same list of speedier jurisdictions will see the hearing normally completed in half a day or less. In countries where hearings tend to be longer, a simpler case such as this would typically take around two days. This list includes Australia, Canada, Hong Kong, Israel and Sweden. In Britain, the parties could expect the hearing in a scenario 1 case to be completed in a day, or two at the most.
Another factor which differs from country to country is the likely compensation payable in a typical case, noting that there are a wealth of factors which will influence the level of awards on a case by case basis, making comparisons more difficult.
Taking our first scenario, the typical compensation payment varies from £110,000 in Sweden to less than £10,000 in Switzerland and Hong Kong, significantly impacting the extent to which the law deters arbitrary dismissal or the absence of any process.
In most cases, the remedy sought is one of compensation. In others, there is at least in theory the possibility of claiming reinstatement. In Britain, reinstatement is theoretically the main remedy for an unfair dismissal, but this is very rarely ordered in practice. In a small number of countries, reinstatement is the only or most likely remedy. These include Germany and Korea (so excluded from the compensation chart above for scenario 1). The US and Singapore are excluded in the absence of unfair dismissal laws in those jurisdictions.
In our second scenario, compensation payments are typically much higher and may include punitive damages and injury to feelings/personal injury as well as financial loss. China, Mexico and Singapore are excluded as the compensation payable by the employer is because of the constructive dismissal and not harassment/discrimination.
In Belgium, an additional award of £25,000 (6 months’ pay on the facts of scenario 2) may be paid by the accused individual personally. In most jurisdictions, including the UK, an additional claim can be brought against the accused individual and an award made against them personally.
Many of the surveyed countries are in the EU, where a cap on discrimination compensation payments would be unlawful. In these cases, higher compensation is more typically awarded. In the UK, the US, Israel, Ireland and Italy awards of more than £75,000 (18 months’ pay on the facts of scenario 2) are common. Nonetheless, claims are typically low in other countries, notably Belgium and Korea.
British litigants face delays of two years or more before a final hearing. The costs of pursuing or defending claims can dwarf the likely awards and represent a probative barrier for many prospective claimants. The stress of all-consuming litigation can quickly wear down the most resilient of claimants. The management time and legal fees spent on defending claims will often push employers towards resolving disputes long before any hearing.
No wonder that, in the vast majority of cases, claims are settled early in order to avoid the cost, stress, management time and unpredictability of litigation. It is also true that some claimants understand the pressures on employers to settle and will bring unmeritorious claims in search of a quick pay off.
Is there a better way? Our analysis shows that whilst delays are amongst the longest in Britain, it is far from alone in seeing cases taking well over 12 months to reach a hearing. Legal costs can also be great in many countries, particularly when defending more complex cases like our scenario 2.
Britain’s employment tribunals (previously called industrial tribunals) were first established over 50 years ago as a simple mechanism to resolve individual employment disputes without the need for lawyers. Half a century later, employment law has mushroomed into a complex set of rules which parties need legal support to navigate.
More resources to reduce delays would be welcome but seem unlikely in today’s straitened times. Some would argue that an increased role for trade unions in the workplace could contribute to reduced pressure on employment tribunals. A greater role (and resources) for government agencies in investigating and enforcing systemic issues such as workplace discrimination is another way forward which has much merit. A possible model is the role of the ICO in enforcing data privacy rights in the UK.
A start would be for governments and policymakers to focus as much on the practical enforcement and defence of workplace claims as on the substantive rights themselves. Perhaps useful lessons could be learnt from the approaches taken in other jurisdictions.
The authors gratefully acknowledge the input into this insight of the following lawyers: