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Repeal of the statutory dispute resolution procedures

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All employers will be aware of the practical problems which have been caused since the introduction of the statutory dispute resolution procedures in October 2004.  Although they were introduced with the intention of reducing the number of disputes which eventually found themselves in the Employment Tribunals, this has not happened.  Instead employers have been faced with a very rigid and formal procedure for dealing with workplace disputes, with significant sanctions for a failure to comply with unclear legislative provisions which were continually being reinterpreted through case law. 

It has long been recognised by employers and employment lawyers alike that resolving minor grievances or disciplinary matters may be best achieved informally.  The statutory procedures prevent this, as to treat a matter informally puts an employer at risk of a finding of automatically unfair dismissal and an increase of up to 50% in any compensation which may be awarded in a subsequent Employment Tribunal case.  As a consequence, even minor complaints raised by employees have to be elevated to disproportionate levels, often creating greater difficulties and resulting in an outcome desired by neither party.

The Government has recognised the failure of the statutory procedures and they are to be repealed in April 2009.  Although the risk of employers suffering a 50% uplift of compensation payable to former employees will also be repealed, there will still be the risk of an uplift of 25%, although in practice it may be that such a risk is very low.

A new ACAS Code of Practice on discipline and grievances at work is to be introduced to take account of changes proposed by the Employment Bill.  The draft Code is concise and reflects the principles of good practice recognised for many years.  It introduces a much greater degree of flexibility, including informality, in dealing with disputes which is to be welcomed.  It promotes the development of clear and specific rules and procedures, understood by and preferably agreed between employer and employee. 

The draft Code complies with and sets out the rules of natural justice, whilst not being prescriptive.  It recommends that issues should be addressed promptly with investigations being carried out where necessary by an appropriate person to establish the facts of a case.  Employees against whom allegations are made should be informed of them in writing and given sufficient information to understand the alleged problem and its possible consequences.  Written records should be kept of meetings and their outcome.  An appeal should always be allowed against any formal decision which is made.

Employment Tribunals are required to take into account Codes of Practice when considering cases.  If a Tribunal finds that either party has unreasonably failed to comply with a relevant Code of Practice, it will be able to increase or reduce any award, depending on which party was at fault, by no more than 25% if it considers it just and equitable to do so.  Bearing in mind the much greater flexibility under the draft ACAS Code of Practice, it may be necessary for a party to have a blatant disregard for good practice in order to be penalised, but as with any new legislation, the effects are likely to be unknown for many months until such time as cases are appealed and reported.  Notwithstanding the forthcoming repeal of the statutory procedures, employers should remember that the principles behind those procedures are sensible and reflect good practice. 





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