UK: Individual disputes at the workplace – alternative disputes resolution
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Alternative dispute resolution is well established through the provision of individual conciliation by Acas. There is a requirement for conciliation to be offered when an individual makes a claim to an Employment Tribunal in a wide range of jurisdictions. The success rate is high and seen in the rate of settlements and in the number of cases where the application is withdrawn. The purpose of conciliation is primarily to avoid the matter going to court. Recently Acas has developed ‘pre claim conciliation’ where conciliation is offered before an application is lodged. Another initiative has been to promote the use of mediation in the workplace in cases which are not capable of judicial determination.
Background
It is thought that the number of employees registering a complaint about their treatment at work is growing, but we need more evidence of this. The central question to be covered by this CAR is how these complaints are dealt with outside, and usually before, an application to a labour court or tribunal but which still provide the aggrieved worker with some avenue of redress, or a least a means for having the complaint heard. This is usually referred to as Alternative Dispute Resolution (ADR).
ADR normally uses well known processes of conflict resolution in collective labour disputes, such as conciliation, mediation and arbitration, but applies these to individual workers’ complaints. ADR may be an alternative to litigation through the courts or it can also be a consensual approach to the resolution of individual conflicts in the workplace used by the courts or an agent appointed by the court. ADR has a number of variants. It is usual for an independent person to be involved as a third party. This can sometimes be someone from inside the employing company or organisation but more usually involves someone from outside who is an independent person.
The main types of ADR are as follows:
- Conciliation: Here the third party who acts only as a facilitator by maintaining the two way flow of information between the conflicting parties and encouraging a rapprochement between their antagonistic positions. This is where the third party listens to each side, usually in person, but it can be done by phone, and seeks to find an acceptable solution, which can be compensation or alternatively, measures taken in the workplace. The conciliator does not make a judgement nor suggest a solution but works with the applicant and the employer to find an acceptable outcome. In some countries the law requires that before the matter can be heard in a labour court or tribunal the applicant must use the services of a conciliator. If agreement is reached it would be normal for the case to be withdrawn from the tribunal and registered as ‘settled’;
- Mediation: This is where an impartial third party, the mediator, helps two or more people in dispute to attempt to reach an agreement. Mediation is based on the principle of collaborative problem-solving with the focus on the future and rebuilding relationships, rather then apportioning blame. Sometimes a mediator may suggest a possible solution to the conflict, as they do in collective labour disputes. Another type of mediation is where the mediator guides the parties toward finding their own solution by getting them to explore different and new ways of thinking and acting. This approach has its origins in family mediation, and;
- Arbitration:This is where the third party hears the case presented by each person and makes a ruling on the outcome;
- Other ADR innovations: There can be other types of ADR such as the appointment of a third party as a ‘fact-finder’ who reports to the parties on the issues leaving them to find their own solutions. This can sometimes be used in disciplinary cases.
This EIRO CAR will focus on how far, if at all, the use of these various forms of ADR (and there may be other variants) is growing, how they operate in different EU countries, how they are viewed by the social partners, and the impact of ADR on employment relations. (An earlier EIRO ‘thematic feature’ exercise in 2004 looked at individual labour/employment disputes and the courts and EIRO national centres in 24 countries produced national reports. These were published online at http://www.eurofound.europa.eu/eiro/thematicfeature7.htm). The following questions should enable us to construct a comprehensive picture of practice and trends in ADR across the EU member states. We are essentially looking for evidence and explanation of the uptake of ADR, and details of how it operates.
(A) Recent trends (2005-2009)
1. What traditional or established methods are used in your country to seek to resolve individual disputes (e.g. labour courts/tribunals)? What ADR methods are now used as alternative or additional means to resolve individual conflicts?
Please give a brief description of the legal mechanisms before reporting on the use of the various forms of ADR used.
Please explain if ADR is voluntary or compulsory. Please distinguish between conciliation, mediation, arbitration and any other types of ADR.
Employment Tribunals (ETs), previously called Industrial Tribunals, have been established for many years, certainly since the early 1970s, to adjudicate on applications from individuals relating to individual rights at work concerning their ex employer, known as ‘post employment disputes’, or their current employer, known as ‘in employment disputes’. There are now around 60 jurisdictions where an individual employee/ex employee can take a case to an ET. In general terms applications must be lodged within three months of the act complained of taking place, e.g. unfair dismissal. In some instances, such as discrimination cases, there are no service requirements before an individual can apply to an ET. In other cases the worker must have been employed in the firm for a certain period to be entitled to protection e.g. one year in the case of unfair dismissal.
Employment Tribunals are headed by a legally qualified person now referred to as a Judge with two side members, one with experience as an employer/manager and the other with experience in representing employees, e.g. as a trade union officer. Originally designed a type of ‘people’s court’ where no legal representation was required or expected, it is now common practice for the individual applicant to be represented either by a trade union legal officer or a solicitor. Around three quarters of employers are legally represented. As explained later, recent years have seen the growth of ‘no win, no fee’ solicitors. This has increased the number of cases submitted to the ETs especially in the area of equal pay and has overwhelmed the Tribunal system. Tribunal judges are empowered to hear some technical cases on their own.
Appeals concerning decisions of ETs are heard in the first instance by the Employment Appeals Tribunal (EAT). Decisions by the EAT have power of precedence as do those of the appeal courts above the EAT, namely the Court of Appeal, the Supreme Court (until August 2009 known as the House of Lords) and ultimately the European Court of Justice.
A significant feature of the UK system of individual dispute resolution is a requirement for most cases, having been submitted to the Tribunals Service using an ET1 form, to be referred to the Advisory, Conciliation and Arbitration Service (Acas). Here a trained individual conciliator (IC) in the relevant region seeks to obtain a resolution of the matter without the need for it to be heard by the ET. However, the parties are under no obligation to enter into the conciliation process if they do not wish to. The IC is required to seek reengagement or reinstatement of an applicant, if relevant, but this is rarely achieved. ICs may also act in pre-claim conciliation (PCC) cases where both parties wish. Acas is an independent body but funded in the main by government. It is governed by a Council composed of individuals of high standing from employers, the trade unions and independents.
Thus the principles of ADR have been long established in the UK. In nearly all cases the conciliator will deal with the parties by ‘phone and only rarely face to face. The distinction between conciliation and mediation is hard to draw in practice in this type of ADR. The conciliator will use their skills to determine whether to use evaluative, facilitative, or transformative intervention. The conciliator has no powers of decision making. However, it is part of the conciliator’s role to discuss the strengths and weaknesses of cases with the parties and to challenge their perceptions as a way of edging them towards a resolution.
Alarmed at the very marked rise in the number of applications to the Tribunals, and thus the cost to the public purse, successive governments have sought to limit or control the process and influence how Acas provides individual conciliation. One such was the development of an individual arbitration scheme operated by Acas as an affordable alternative to an employment tribunal hearing. This is where an arbitrator hears the case and makes a legally binding decision. In practice it is virtually moribund dealing with less than 10 cases a year.
An attempt was made in 2004 to introduce time limits on certain Acas conciliation cases and more importantly to impose a 3 step procedure that employers and employees were required to use in their organisation to deal with cases of discipline and grievance. Failure to do so could lead to a finding of unfair dismissal against the employer or for the employee being prevented from making a claim to an ET. The aim was to improve and speed up the process of dispute hearing inside organisations long before the issue came to an ET. In particular the 3 step procedure emphasised the importance of written communication concerning the handling of a disciplinary or grievance issue. The assumption was that this would give clarity and aid quick resolution in the employing organisation. In practice, as revealed by the Gibbons report of 2007, this had the perverse effect of making settlements more difficult since the parties knew that their correspondence and written reports would be admissible in an ET hearing. The number of ET applications rose rather than fell in subsequent years and resolution rates declined. However, the legal requirement to operate disciplinary and grievance procedures to a minimum standard, including a final internal appeal step, can be seen as a type of ADR potentially reducing the number of cases going to an ET and Acas.
The 3 step procedure was abolished in 2009. In its place Acas was asked to revise its Code of practice on discipline and grievance to give practical advice on how to handle these topics. A Code of practice has quasi legal authority since ETs are required have regard to the advice therein in determining whether the company or the applicant met the procedural standards set out in dealing with the issue. The ETs now have the power to vary an award by or – 25% in the event that the Acas Code has not been followed. The Acas Code is also a key document used by individual conciliators in providing ADR services.
Two very recent initiatives concern the use of mediation as a new form of ADR. It is too early to say how far they will be used and with what level of success. First, Tribunal chairs may offer a form of ‘judicial mediation’ in trying to get the parties to come a settlement before a full hearing of the ET. In practice this can often amount to ‘early neutral evaluation’ where the judge suggests what may be the outcome of full hearing with a view to influencing the views of the parties. Second, Acas, and some private sector providers, offer mediation services, for a fee, especially in the case of ‘in employment disputes’ such as accusations of bullying and harassment. These are usually problems which have not got to the stage of being or becoming cases for an ET but are internal disputes. Some large firms and organisations, such as the major police forces, also provide trained internal mediators to help resolve problems. This was actively encouraged in the Gibbons Report.
A further initiative has been taken by Acas in 2009, based on a pilot study in 3 regions, to provide an enhanced PCC service. Acas runs a telephone help line, which has recently been extended in opening hours and in staffing. This gets just under 1 million calls a year. Under PCC, if a help line adviser comes to the conclusion that the issue raised by the caller was one which would be likely to lead to an ET application, and which had a likelihood that it could be resolved by an IC, it is then referred, with the caller’s permission, to an IC who then contacts the other party. The experience of the pilot studies led Acas to conclude that of those cases referred in this way around 65% are settled but some which are not are then withdrawn. In practice only around one in five cases dealt with under PCC still get to the ET hearing stage.
2. Over the last five years, i.e. since the beginning of 2005, have there been any changes in your country in the volume of cases dealt with by ADR and in the proportion of individual disputes dealt with by ADR?
(i.e. in relation to the total number of individual disputes lodged with tribunals/labour courts)
Please distinguish between the different types of ADR and, wherever possible, please provide statistical evidence for each year.
The total number of cases received by Acas for conciliation is shown in table one below.
| Year | Cases |
|---|---|
| 2004/5 | 81,828 |
| 2005/6 | 109,712 |
| 2006/7 | 105,177 |
| 2007/8 | 151,249 |
| 2008/9 | 138, 535 |
One difficulty in interpreting these data is that over the period it has become increasingly likely that an applicant will make claims under multiple jurisdictions, e.g. unfair dismissal and sex discrimination and flexible working. These would then be counted as three cases in gross data as in table 1. Acas estimate that in 2008/9 the net number of cases, which counts each applicant as one irrespective of the number of applications made, dealt with by conciliation was 78,670 compared with 138,535 gross applications. This was a rise of 18% from the previous year even although the gross figures show a decline.
As noted above the number of individual arbitration cases is tiny at less than 10 per year.
It is not possible estimate how many cases were dealt with by mediation since there is no national data base and no requirement to report on cases. Acas reports that in 2008/9 it took on 230 cases which was 24% higher than the previous year (185 cases and 150 cases in 2006/7).
In short, the number of cases has increased quite substantially in the five years but largely because of the growing tendency for individuals to take a case to an ET and the growth in multiple applications. The use of conciliation provided by Acas is directly linked to the number of applications and pre application cases. There is some evidence that mediation is a growing especially for ‘in employment disputes’. There has been much attention paid to mediation following the publication of the Gibbons Report and the production of a joint Acas-CIPD employers’ guide on the use of mediation in 2008. This is discussed further in question 10.
3. What are the main categories of individual workplace disputes dealt with by each type of ADR?
(e.g. disciplinary issues, employee grievances, harassment, bullying, discrimination on grounds of gender, ethnicity, religious belief, sexual orientation, pay, employment rights etc)
Are some issues more amendable to ADR than others? For example, it has been suggested that mediation may be best suited for disputes concerned with bullying, harassment and worker-worker problems.
| Type | number | %settled | %withdrawn | % ET hearing |
|---|---|---|---|---|
| Unfair dismissal | 31,534 | 51.6 | 25.8 | 22.6 |
| Wages Act | 10,510 | 35.0 | 27.2 | 37.8 |
| Breach of Contract | 4,826 | 35.0 | 23.3 | 41.7 |
| Redundancy pay | 3.028 | 16.4 | 23.2 | 60.3 |
| Sex discrimination | 5,996 | 36.3 | 54.5 | 9.2 |
| Race Discrimination | 2,286 | 50.1 | 28.5 | 21.4 |
| Disability discrimination | 3,528 | 52.8 | 34.0 | 13.3 |
| Working time | 2,613 | 44.3 | 29.8 | 25.9 |
| Equal pay | 5,564 | 28.8 | 52.4 | 18.9 |
| Minimum wage | 87 | 43.7 | 31.0 | 25.3 |
| Flexible working | 51 | 58.8 | 39.2 | 2.0 |
| Age discrimination | 1,081 | 56.2 | 29.5 | 14.3 |
| Others | 3,773 | 29.4 | 27.9 | 42.7 |
| Total | 74,777 | 42.6 | 30.7 | 26.7 |
It is evident that unfair dismissal constitutes by far the largest category contributing around 2 in every 5 cases (42%). In terms of conciliation leading to a settlement forms of discrimination on grounds of age, disability, race and sex and flexible working together with unfair dismissal all seemed most prone to success with over half being resolved by this means. Issues most likely to end up in a tribunal hearing concern the more factual and less judgemental areas of claims under the Wages Act (payments not made), breaches of contract and redundancy pay.
Overall, only just over a quarter of applications lead to a tribunal hearing. The use of conciliation is thus justified in the main by the saving to the public purse. In 2005/6 the net cost of Acas individual conciliation was £24m while the estimated benefit was £153.9m in ‘saved’ hearing days, a benefit ratio of 6.4. Success rates in Acas conducted mediation are very high at 91.8% but the number of cases is low.
4. Does the use of ADR vary by industry sector and by occupational characteristics?
(e.g. public, private and voluntary sectors; professional, white collar, manual workers)
Acas does not produce these types of data.
5. What impact is the recession having on the number or volume of individual disputes and on the use of ADR?
The Acas annual report for 2008/9 notes that ‘the economic downturn led to a rapid and sustained increase in the number of cases passed to Acas for conciliation in the second half of 2008/9’ i.e. October-March. In the main these were in areas of unfair dismissal and redundancy pay. An additional area where a complaint can be made is a failure by the employer to inform and consult representatives. These increased by 80% between 2007/8 and 2008/9 (from 4480 to 7382).
(B) Actors and processes
6. How does the aggrieved worker get access to ADR?
Is it via a trade union; on applying to a tribunal or labour court; through the employer; or some other way?
Is the worker required to have sought to resolve the matter by using the internal company grievance and disputes procedures first?
Is ADR free of cost for the employee applicant? Does the employer have to pay for ADR services?
The individual aggrieved worker is the person making the application to the Employment Tribunal by completing the ET1 form. As explained earlier the person may be steered by the Acas helpline to use ‘pre-claim conciliation’ and there can be direct access to Acas for the use of conciliation. The conciliation service is free for users but Acas must make a judgement that the issue is one that is likely to lead to an application for it to offer it services free of charge. In contrast mediation is charged for and normally paid by the employer.
There is an expectation that internal company procedures will be used and, as noted above, a Tribunal can alter an award or – by up to 25% where the procedure was not used or did not comply with the Acas Code of practice. Acas individual conciliators and the helpline will also seek to encourage the use of internal procedures.
7. Where do independent experts in conciliation, mediation and arbitration come from?
Who appoints them and are they required to be trained?
Who pays them? This could be the government/state, a specialist government agency, the employer or employers’ association, a trade union or other bodies.
Conciliators are civil servants appointed and trained by Acas. Mediators used by Acas are more experienced individual conciliators or senior advisers. Private sector conciliation practices appoint their own staff drawn in the main from those with experience in HR and trade unions. Where large companies run their own internal mediation schemes the mediators will normally be middle managers specially trained for this purpose. In a few cases employee representatives are trained as mediators.
8. Is there any formal link between ADR and a labour court or a tribunal?
Does the worker have to have applied to the labour court/tribunal first before ADR can be used?
If ADR is used and is successful, must the claim be withdrawn from the tribunal?
Can the independent expert providing ADR subsequently be required to give evidence in the labour court/tribunal hearing?
As explained above, most conciliation takes place only once an application has been made to the Tribunal. Elsewhere for Acas to provide conciliation without charge the conciliator must judge that the case is likely to go to a Tribunal unless settled or withdrawn. Successful conciliation must be accompanied by the withdrawal of the case from the tribunal by the applicant. ‘Withdrawn’ cases are where the applicant decides, for whatever reason, not to proceed following discussion with the conciliator or an exchange with the employer facilitated by the conciliator.
The conciliator cannot be required to give evidence in a tribunal hearing or to provide a witness statement. The work of the conciliator is confidential.
9. Is the worker using ADR usually accompanied by someone at the hearing?
If so, by who (e.g. a fellow worker, a trade union official, a lawyer etc)?
Conciliation events are not hearings. Less than 5% of conciliation cases involve a face to face meeting with the conciliator and even here it may not be that there will be a face to face meeting with the parties together. An applicant and respondent may nominate a representative, such as a lawyer or trade union officer. In such cases the conciliator is likely to deal with the named representative and will thus be one removed from the parties.
Where mediation is used the strong preference of mediators is to deal directly with the people involved without any intermediaries or accompanying individuals. This is usually the case.
(C) Views of governments and social partners
10. What are the attitudes of the government and social partners (employers/employers’ associations and trade unions) to the use of ADR techniques?
Do they encourage or discourage the use of ADR, or remain neutral or indifferent?
Have these attitudes changed in the last five years and if so why?
Have any agreements been reached by the social partners on the use of ADR in the workplace?
The use of conciliation prior to a case being heard at an ET hearing is well established and respected. The role of Acas in providing this service free of charge to the parties is respected. At times when governments have sought to reduce or curtail the Acas conciliation role the social partners, reflected in the composition of the Acas Council, have robustly defended the service. However, like other areas of the public service, expenditure constraints and reductions can put pressure on delivery standards.
Government is particularly concerned at the growth in the number of ET applications. It is this that has led to two different Acts of Parliament in this decade in an attempt to control and hopefully to reduce the number of applications. In each case, first by enforcement of the three step procedure and now through emphasis on the Acas Code of practice, the aim was to get better handling of grievance and disciplinary issues inside the place of work. This would then reduce the need for ET applications and improve workplace relations seen in fewer dismissals and resignations. It can be argued that this is a type of ADR. The use of pre claim conciliation is an attempt to help in this process by using conciliation before the issue deteriorates sufficiently to lead to an application to a tribunal. The social partners and the government support this initiative. Indeed the government provided ear marked additional resources to Acas to promote PCC and extend the telephone helpline.
The growth of ‘non-win, no-fee’ solicitors in the last decade has made to use of ADR more difficult in some cases. To summarise a very complex situation, in both the local authorities and the National Health Service the introduction of new payment systems identified previous inequalities in pay between men and women. The payment of compensation based on the pay gap in the previous 6 years was initially subject to negotiation at the local level between employers and unions, sometimes with the help of Acas collective conciliation. Compromise agreements were reached which were deemed affordable by employers and acceptable to trade union members, both men and women. It was no-win, no-fee lawyers initially who persuaded women workers affected that the compromise agreements were paying out much less compensation than they were legally entitled to. Early success in the tribunals has meant a very rapid growth in the number of applications under equal pay and unwillingness to allow conciliation to be used in many but not all cases. It has significantly inhibited the negotiation of compromise agreements especially as trade unions may be ‘joined’ in the Tribunal case and required to pay part of the compensation to the applicant. The tribunals have been overwhelmed with the number of cases. This has been exacerbated by the fact that it is very difficult to have ‘class action’ hearings where the individual acts for the group. In general terms where there is a belief, encouraged by a lawyer, that the outcome of a tribunal hearing will be much better for the applicant, or indeed the respondent than that achieved through conciliation, ADR suffers.
The use of mediation, where a trained mediator helps two or more people in dispute at work to reach an understanding through collaborative problem solving, is more controversial. The trade unions are generally ambivalent while employers and government more in favour. Trade unions are concerned that mediation can be used to exclude the representation of workers to the detriment of the both the worker and the union. They have strongly opposed making the use of mediation compulsory. Employers organisations have also opposed compulsory mediation but for very different reasons. They do not want further regulation, per se.
(D) Commentary by national centre
11. Please provide a short commentary on the significance of ADR in your country and debates about its impact (or potential impact) on employment relations.
The use of conciliation prior to an Employment Tribunal hearing is very well established and has a high success rate measured in the volume of agreed settlements and in the number of cases withdrawn. In 2008/9 Acas individual conciliation ‘saved the taxpayer from potentially funding 76% of Tribunal Hearing Days compared with 75% in 2007/8’
The experiment with pre claim conciliation where conciliation is offered before an application to an ET has had modest success and provides the base for a limited expansion in conciliation provided it can be resourced by central government.
The use of mediation at the workplace is very modest but may expand especially in larger workplaces. The lack of support for it from the trade unions may inhibit its growth, or it may become more often found in non-union organisations.
Long running attempts to improve the quality of employment relations such that there will be less need for employment tribunals and ADR services outside the workplace continue. The latest attempt, beginning in April 2009, is seen in the issuing of the Acas revised Code of practice on discipline and grievance handling and linking its adoption to the level of tribunal financial awards.
The long standing criticism of the British system of individual employment rights that it operates in the main only once the employment contract is broken and the applicant has left employment remains. It is very rare for a tribunal to order reinstatement preferring a financial award as compensation or for ADR via Acas conciliation to achieve this type of resolution even although they are required to attempt it. In effect conciliation operates in the shadow of the tribunal system searching for agreement on levels of compensation rather than reinstatement. The growth of pre claim conciliation and mediation, plus the successful implementation of the Code of practice may, modestly, help more employees get a resolution of a workplace problem without loosing their job.
John Purcell, IRRU, University of Warwick
[2] These data also exclude a large number of cases concerned with equal pay in the National Health Service where they were not passed to Acas for conciliation since the parties had not requested conciliation or there appeared to be little chance of success in conciliation.