Dispute resolution and the Employment Bill - Employment Law News Autumn 2008

25 September 2008

On 1 October 2004, the Employment Act 2002 (Dispute Resolution) Regulations 2004 introduced new statutory dispute resolution procedures (“the statutory procedures”) for the handling of dismissal, discipline and grievances in the workplace.

The stated aim of the Government was to encourage employees and employers to resolve workplace disputes without recourse to legal action.

By elevating procedure over substance, the statutory procedures have generally hindered rather than helped the cause of workplace resolution. They have had significant unintended negative consequences that outweigh the benefits. In particular, the formalisation of disputes at an early stage, which has led to an increased number of claims at the Employment Tribunal (“ET”), increased costs, time and confusion.

A review was undertaken by Michael Gibbons on behalf of the Government that was published in March 2007. Its brief was to review the statutory procedures and consider options for simplifying and improving employment dispute resolution. This formed the basis of the Employment Bill (published in December 2007) and the subsequent consultation process with a view to legislation being implemented in April 2009.

In summary the important proposals within the Employment Bill that relate to dispute resolution are:

• Repeal of the statutory procedures: in their place ET’s will be given the power to uplift the compensation award by up to 25% (currently up to 50%) for an unreasonable failure by either the employer or the employee to comply with a revised Acas Code of Practice on Discipline and Grievance (“Acas Code”). The proposed revised Acas Code is short, concise and principles based; it will be supplemented by a longer free standing non statutory guidance document. This guidance will provide practical help to employers bearing in mind what would be appropriate for the size and resource of the employer. It will remove some of the cumbersome requirements of the current statutory procedures, for example, the failure to follow the revised Acas Code will no longer automatically render a dismissal unfair. In addition, there will no longer be a requirement for an employee to raise a grievance in writing if they want to bring a subsequent ET claim. This will have a significant impact on how grievances are dealt with in the workplace given that, at present; the statutory grievances do require grievances to be put in writing.
•  Simple monetary claims: within the existing ET structure procedures will allow, for example, relatively straightforward wages or redundancy payment monetary claims to be determined without the need for a full ET hearing.
• Repeal of section 98A of the Employment Rights Act 1996: this means reverting back to reliance on the pre 2004 line of cases that followed Polkey v AE Dayton Services Ltd (1987). Therefore, if an employer fails to comply with a dismissal procedure the dismissal will be unfair, even if the employer could show that the failure did not affect the outcome. However, the compensation award could be reduced to reflect the likelihood that the dismissal would have gone ahead even if the correct procedure had been followed.
• Investment in Acas: this is likely to lead to the building upon the existing Acas Helpline service. The Government believes that there is value in helping potential ET claimants, particularly unrepresented claimants, to understand the options available to them at an early stage in an attempt to encourage early dispute resolution.

The success of the proposed changes will, of course, be judged in time. However, tentatively the dispute resolution aspects of the Employment Bill appear to be good news for employers who have grappled with the complexities of the current statutory procedures and should be cautiously welcomed.

For further information contact Andrew Masters on 01227 763939
 

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