New framework for workplace dispute resolution

The Employment Act 2008 introduced new measures, which came into effect in April 2009, designed to encourage a more practical, less legalistic approach to dispute resolution at the workplace. The move has been broadly welcomed by employer organisations and trade unions, although some unions are concerned about the possible undermining of standards of procedural fairness.

The UK government has been trying to encourage the early settlement of individual disputes between employers and employees at the workplace. It is hoped that such efforts will prevent litigation in areas such as dismissal, which account for over 45,000 employment tribunal (ET) cases a year. The Employment Act 2008 (UK0905039I) repealed earlier statutory measures intended to achieve this and replaced them with new provisions, which entered into force in April 2009. Accompanying non-legislative (funding) measures have also been introduced.


The dispute resolution procedures introduced in 2004 following the Employment Act 2002 (UK0408102F) provided that parties to ET cases who had not followed specified discipline and dismissal procedures as well as statutory grievance procedures could be financially penalised. However, this earlier attempt to provide an incentive to resolve disputes at the workplace, and reduce recourse to ETs, was generally seen as a failure. Employees were deprived of their rights through excessive technicality and the statutory ‘three step’ procedures gave rise to litigation rather than preventing it. Faced with growing criticism, not least from employers, the government set up the Gibbons review (377Kb PDF), which in 2007 recommended the repeal of the 2004 procedures.

New legislative measures

Under the new regime, ETs will be able to adjust awards by up to 25% in cases brought before them where the employer or employee has failed, without good reason, to follow a statutory code of practice on disciplinary and grievance procedures introduced by the Advisory, Conciliation and Arbitration Service (Acas).

Acas has taken the opportunity of the legislative change to produce a new, shorter code of practice on disciplinary and grievance procedures. This code of practice sets out principles and general guidance rather than detailed prescription. The basic procedural principles relate to:

  • expedient handling of issues without unreasonable delay;
  • informing employees of the allegations against them;
  • providing employees with an opportunity to put forward their case before decisions are reached;
  • allowing employees to be accompanied at any formal grievance or disciplinary hearing;
  • providing a right to appeal.

Statutory codes of practice drawn up by agencies such as Acas and the equality commissions provide guidance on good employment practice. They are not legally binding as such, but the extent to which they have been followed is taken into account by ETs. Compliance has now been given particular emphasis through linking the compensatory award to this.

Unfair dismissal

Since its inception in 1972, the unfair dismissal legislation in the UK has been concerned with procedural unfairness and not just substantive unfairness: in other words, the way in which a dismissal is handled is important; it is not simply a question of whether there is sufficient reason for an employer to dismiss an employee. The importance attached to procedural failure on the part of the employer has, however, varied over time following judicial interpretation. Under the 2002 legislation, dismissal in breach of the specified statutory procedure was automatically deemed unfair. The position now established by the 2008 Act is that a procedural failure is likely to render a dismissal unfair; however, it is open to the employer to argue that, although there has been a failure to follow procedure, had they done so it would not have made any difference to the decision to dismiss. This ‘no difference’ argument can be used to reduce any compensation that might be payable to the former employee.

Other measures

Accompanying non-legislative measures – which the government sees as facilitating the workplace settlement of disputes – centre on the provision of advice, conciliation and mediation. However, these measures fall short of embracing alternative dispute resolution (ADR), as proposed in the Gibbons review. Moreover, additional funding is being provided to Acas for its advice helpline, which is open to employers and employees, along with support for changes made to increase its ability to offer conciliation early on in cases that could potentially develop into ET claims. Such cases might be identified through helpline referrals. This new earmarked funding follows many years of reductions in the budget of Acas (UK0802029I).

Social partner reaction

The repeal of the mandatory procedures, which were failing to reduce the volume of tribunal cases and which generated a complex body of case law, has been welcomed by the social partners. There is a general hope that the more flexible legislative regime will encourage a more practical and less legalistic approach to dispute resolution. Nevertheless, some of the trade unions have expressed concerns about the possible undermining of standards of procedural fairness, while highlighting their regret that the acknowledged role of trade unions in facilitating dispute resolution at the workplace has not led to greater support for unions.

Linda Dickens, IRRU, University of Warwick

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