UK: Focus on Dispute Resolution: the New Law

Last Updated: 8 September 2004
Article by Christopher Booth

Originally published August 2004

One major aim of the Employment Act 2002 was to reduce the number of Employment Tribunal applications by obliging employers and employees to try to resolve disputes internally through domestic procedures before going to Tribunal. This may be laudable, but its implementation has proved extremely complicated. As well as new Dispute Resolution Regulations, major revisions have had to be made to unfair dismissal law, the ACAS Code and the Employment Tribunal rules of procedure. The result, in place from October 1 2004, is a complex statutory maze, full of exceptions and conditions that will give rise to much uncertainty and litigation.

Dual Procedural Standards

Part of the problem is the sheer complexity of the new Regulations, which prescribe in great detail minimum procedural standards; and part because these Regulations do not replace, but sit uneasily alongside, the existing law of unfair dismissal, set out in the Employment Rights Act and illustrated by the ACAS Code. There are many situations where compliance with the new minimum standards will not be enough to ensure a fair dismissal procedurally. Because of this, it would be a mistake to revise existing procedural standards down to the level of the new statutory minimum, and attempt to operate at that level. Instead, existing procedural standards should be maintained but will almost certainly require adjustment in points of detail to ensure compliance with new statutory regime.

In addition it will not be enough just to have procedures: they will have to be followed scrupulously under the new regime. Whereas in the past, employers could often excuse lapses when taken in an overall context of reasonableness, lapses from the new minimum standards are punished severely; dismissals are automatically unfair, and compensation increased.

We highlight below some of the detailed points which employers should consider when reviewing their existing procedures to see what changes are necessary to ensure compliance with the new regime.

Discipline and Dismissal

Scope of the New Procedures

The statutory procedures apply if the employer is considering dismissing the employee and also to disciplinary action short of dismissal, such as suspension without pay, demotion, disciplinary transfers or loss of seniority/pay. They do not apply to the issuing of warnings - although it is important to appreciate that if the outcome is in doubt and dismissal is a possibility then they will apply, even if only a warning actually results.

In addition, do not assume the new procedures apply only to disciplinary dismissals. In fact they cover a number of other types of dismissal (including capability dismissals, the expiry of fixed term contracts and small scale redundancies).

Investigatory Meetings

Ensure investigatory meetings (which do not attract the right to be accompanied or the statutory procedural requirements) do not turn into disciplinary meetings.

For example, if an employee admits misconduct during such a meeting, it can be very tempting to move straight to the appropriate sanction, but that would not comply with the statutory safeguards.

Advance Warning of Meetings

If the new procedures apply, advance warning of meetings must be given, in writing, summarising the allegations against the employee or the relevant circumstances, with copies of any relevant documents where possible. The revised ACAS Code recommends reminding the employee of their right to be accompanied in the pre meeting letter.

Fixing the Time

Like all steps under the statutory procedure, the meeting ‘must take place without unreasonable delay’. However, the meeting must not take place until ‘the employee has had a reasonable opportunity to consider his response’. (In practice at least two working days is probably a minimum for a reasonable opportunity - and longer if the information is complex.) The meeting must be fixed for a reasonable time and place; the employee is under a duty to attend.

The revised ACAS Code says timing and location should be agreed with the worker where possible. At the very least, management should consult the employee and consider any difficulties raised. The revised ACAS Code also recommends allowing any companion to have a say in the date and time of a hearing. If the companion cannot attend on a proposed date, the worker must suggest another date that must suit everyone involved and be not more than 5 working days after the original date.

Postponing Meetings

Once a meeting has been fixed, any postponement need only be allowed for unforeseen circumstances - illness, or a car breakdown, for example. In such cases a second meeting should be arranged, but no further postponements need be allowed (though even this could be challenged as unfair if clear evidence of a compelling reason was produced). Employees should be warned that if there is no valid reason for non-attendance, decisions may be taken in their absence.

Conduct of Meetings

‘Meetings must be conducted in such a manner that allows both employer and employee to explain their cases’. The revised ACAS Code recommends allowing the worker or companion ‘to participate as fully as possible in the hearing, including asking witnesses questions’. This implies a right to cross examine, which is not currently established by cases on reasonableness under current law.

Grievance Procedures

The principal feature of the new regime on Grievance Procedures is the requirement that employees use the grievance procedure internally before they can take a Tribunal case. A common complaint, particularly for discrimination cases, is that the first the employer knows of a problem is on receipt of the Tribunal Application. If used constructively, the opportunity to address concerns internally could be a considerable benefit to employers.

Again, the regime is complex and full of exceptions. Three particular practical implications are mentioned here:

  • The new regime requires formal grievances to be put in writing. Employees can be reluctant to do this (and some may find it difficult): ACAS recommend encouraging employees to seek help with this, from a colleague, representative or the CAB;
  • The rules for grievance meetings are similar to those above for disciplinary meetings. The written response should be given ‘without unreasonable delay’: ACAS suggest ‘five days is usually enough’. Many employers struggle to deal with grievances this promptly; and
  • Ex Employees Grievances from ex employees are often disregarded, yet employees must now submit these before taking a constructive dismissal or discrimination claim, for example. A failure by employers to consider them properly through procedure will strengthen the employee’s position and may lead to increased compensation.

Further Guidance

While this Bulletin can only highlight some of the main features of this complex legislation, we have prepared an Information Pack which contains:

  • a set of four factsheets highlighting the impact of the statutory procedures
  • a ‘Health check’ Questionnaire which you can use to identify areas of risk under the new rules
  • details of our training programme for HR professionals and managers
  • details of our ‘Step by Step Guide’ to handling dismissals, disciplinary issues and grievances.

If you would like to receive the pack, please let us know.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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