Government launches consultation on workplace dispute resolution

In January 2011, the UK government launched a consultation on reform of the procedures for resolving workplace disputes, aimed at promoting early resolution without resort to an employment tribunal, improving the handling of cases that do go to a tribunal, and helping employers ‘feel more confident about hiring’. While the government’s initiative was viewed positively by the main employers’ organisation, the CBI, trade unions were strongly critical of the proposals.

Consultation launched

Following a period of speculation and lobbying by the social partners (UK1101029I) and against the background of a steep recent increase in claims to employment tribunals (the bodies that adjudicate individual employment law disputes, see UK0403101T), the Department for Business, Innovation and Skills (BIS) and the Ministry of Justice’s Tribunals Service launched a public consultation on resolving workplace disputes on 27 January 2011. The Conservative–Liberal Democrat coalition government describes the initiative as a significant first step in taking forward its planned review of employment law (UK1005019I).

The consultation seeks views on a range of proposals aimed at:

• achieving earlier resolution of workplace disputes so that employers and employees can resolve their own problems in a way that is fair and equitable for both sides without having to go to an employment tribunal;

• ensuring that, where disputes are referred to an employment tribunal, the process is as swift, user-friendly and effective as possible;

• helping employers feel more confident about hiring people.

The stated rationale for the government’s proposals is that workplace disputes cost time and money, and can affect morale, reduce productivity and, ultimately, undermine economic growth. Concerns about ‘ending up in an employment tribunal’ can be a significant barrier that prevents employers, particularly small companies, from taking on staff. The government wants to encourage employers and employees to work together to resolve disagreements, preserving the working relationship where possible and achieving a swift resolution where it is not. The government aims to ensure maximum flexibility, while protecting fairness and providing the competitive environment required for enterprise and growth.

Proposals for reform

Proposals set out in the consultation document include the following:

• enabling greater use of alternative dispute resolution tools such as mediation;

• requiring all claims to be submitted to the Advisory, Conciliation and Arbitration Service (ACAS) in the first instance, rather than an employment tribunal, giving ACAS up to a month to offer pre-claim conciliation;

• weeding out weaker cases, for example by:

1. making the power for tribunals to strike out claims more flexible;

2. allowing tribunals to order parties to pay a deposit at any stage of the proceedings;

3. greatly increasing the deposit and cost limits for weak and vexatious claims;

• encouraging settlements, for instance by requiring additional information about the nature of claims when they are made, and by allowing parties to make formal settlement offers during tribunal proceedings;

• shortening tribunal hearings, for example by withdrawing the payment of expenses in hearings and extending the types of case where judges can sit alone in employment tribunals to include unfair dismissal (employment tribunals are normally made up of a judge and two ‘lay’ members representing employers and employees);

• introducing fees for claimants in tribunal cases;

• increasing from one year to two the qualifying period of continuous employment required before an employee may bring a claim for unfair dismissal in most cases (the government believes that this would result in some 3,700–4,700 fewer claims being made per year);

• introducing financial penalties (in addition to compensation awards) for employers found to have breached rights, to encourage greater compliance.

The consultation runs until 20 April 2011.

Social partner reactions

The General Secretary of the Trades Union Congress (TUC), Brendan Barber, described the government’s proposals as ‘a reform going in exactly the wrong direction’, giving bad employers a ‘green light’ to exploit employees who are especially vulnerable in the current economic climate.

Len McCluskey, the General Secretary-elect of Unite, the UK’s largest union, accused the government of seeking to ‘make it easier to fire workers, but harder for them to access justice’.

In contrast, John Cridland, the new Director-General of the Confederation of British Industry (CBI) commented in a press release that:

For far too long the tribunals system has put the interests of lawyers above those of employers and employees. Given that 2010 saw a 56% rise in tribunal claims, the government must look at ways of strengthening the process. It is in everyone’s interests that disputes are resolved swiftly and fairly. Introducing an element of charging would help weed out weak and vexatious claims, clearing the way for more deserving cases to be heard.

He described extending the qualifying period for claiming unfair dismissal as ‘a positive move that will give employers, especially smaller ones, the flexibility and confidence they need to hire’.

Mark Carley, IRRU/SPIRE Associates