New Dispute Resolution Procedures - Employment Law News Summer 2004

01 July 2004

With the benefit of the Employment Act 2002 (Dispute Resolution) Regulations 2004, we can now highlight some of the key elements of the new statutory regime which will be in force from 1 October 2004.

The Employment Act 2002 had already provided a relatively straightforward structure centred on:

• A standard, three-step dismissal and disciplinary procedure (DDP) and corresponding grievance procedure (GP), consisting principally of (i) a written statement either by the employer (i.e. of the grounds for contemplating dismissal or disciplinary action) or by the employee (i.e. of his grievance), (ii) a meeting and (iii) an appeal;
• A modified, two-step DDP, and corresponding GP, applicable in limited circumstances;
• Financial penalties for non-compliance with these procedures, where they apply. Where tribunal awards are made, they will be adjusted by 10 to 50% - downwards, where the employee is at fault for non compliance; upwards, where it is the employer’s failure;
• A prohibition on employees starting tribunal proceedings in some cases where they have failed to pursue the statutory grievance procedure;
• Findings of automatic unfair dismissal where employers dismiss employees and fail to follow the statutory DDP, if applicable.

The Regulations flesh out this framework. Not least, they attempt to define: the factual circumstances to which the various procedures apply; where they do not apply at all; and where the various requirements are treated as having been complied with. Of note:

• The standard DDP applies where an employer contemplates dismissing or taking relevant disciplinary action against an employee. Relevant disciplinary action is action short of dismissal, based on conduct or capability, other than suspension on full pay or the mere issue of a warning (whether oral or written);
• Neither DDP applies: to dismissals where all employees of a certain description are dismissed and offered immediate re-engagement; or in what is technically a collective redundancy context; or in certain strike contexts; or where the employer’s business suddenly ceases to function;
• The GPs apply in relation to any grievance which could form the basis of one of a number of specified tribunal complaints;
• The third stage (appeal) requirements of an applicable DDP are treated as complied with where an appeal is instead pursued through certain collectively agreed procedures. Similarly, where a statutory GP applies, it can be treated as complied with where the employee raises his grievance under a collectively agreed alternative procedure;
• Specific provisions address situations where commencing or continuing with statutory procedures might result in a threat to either party or in continued harassment.

Where the statutory procedures apply, and in order to accommodate them, time limits for presenting complaints to employment tribunals will in some situations be extended, by three months. Examples include (i) where an employee reasonably believes, when the original time limit expires, that a DDP is being followed, and (ii) where, in the case of a grievance, he lodges his grievance with his employer within the normal time limit for presenting claims to the tribunal.

Finally, and on a welcome note for employers, it looks as though these statutory procedures are not after all going to be incorporated into the contract of employment, at least until the position is reviewed two years down the line. That could have advantages on termination, in terms of limiting exposure to damages and increasing the chances of restrictive covenants surviving.

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