The Government is scrapping the compulsory dispute resolution
procedures it introduced in 2004 after a consultation process in
which many contributors suggested a strengthened ACAS Code would be
a better solution.
The new ACAS Code will come into effect on the day of the legal
changes next April, the body said.
"The new code is a key element in the Government's plans to
streamline and simplify the dispute resolution system to the
benefit of employers and employees," said Pat McFadden, minister
for Employment Relations. "It will complement the removal of
statutory measures by establishing flexible, principles-based
guidance to help resolve disputes early."
In 2004 the Government made it compulsory for employers and
employees to follow a three step procedure when dealing with
workplace disciplinary matters and grievances. In respect of
dismissals if the employer failed to follow the statutory procedure
the dismissal is automatically ruled to be unfair. The aim
behind the statutory procedures was to attempt to resolve workplace
disputes without the need for the employees to resort to the
Employment Tribunal thereby reducing the burden on the Employment
Tribunals service.
The Government asked Michael Gibbons to review its procedures
and he found that the measures were a well-intentioned failure.
"In conducting the review I was struck by the overwhelming
consensus that the intentions of the 2004 Regulations were sound
and that there had been a genuine attempt to keep them simple, and
yet there is the same near unanimity that as formal legislation
they have failed to produce the desired policy outcome," said
Gibbons in his report. "This is perhaps a classic case of good
policy, but inappropriately inflexible and prescriptive
regulation."
The Government chose to scrap the procedures with its Employment
Bill, which is expected to become law next April, when some of its
job will be done by the ACAS Code.
Employment law specialist Ben Doherty said that though the new
Code was not a law like the old procedures, there were still
incentives for employers to follow it.
"Unlike the current statutory procedures if the employer fails
to follow the code it will not render that employer liable in
proceedings; there is no automatically unfair dismissal consequence
as with the statutory procedures," he said.
"There may still be consequences for companies who fail to
follow the procedure, though," said Doherty." Though it is not
compulsory to follow the Code, failure to do so will be taken into
account by Tribunals when deciding the claim, and if it is
successful the Tribunal may increase payouts by up to 25% if the
Code is not followed. In the past the Tribunals had to increase
payouts by between 10% and 50%."
ACAS said that it had shortened the Code in line with requests
made during the Government's consultation process. Doherty said he
thought that the more concise Code would suit everyone caught up in
disputes.
"The Code is fairly short and should be easy for all employers
to follow," he said. "The simplification that the Code introduces
is likely to be welcomed by employers and employees alike."
ACAS's aims for the Code are similar to the aims of the
statutory procedures.
"Employers and employees should do all that they can to resolve
disciplinary and grievance issues in the workplace," said the Code.
"Where this is not possible employers and employees should consider
using a third party to help resolve the problem. Recourse to an
employment tribunal should only be a last resort."
The Code is in draft form for consultation and responses will be
taken until 25th July.
