Focus on Dispute Resolution: the New Law

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...