Keeping the house in order

first_imgKeeping the house in orderOn 1 Feb 2002 in Personnel Today The recently published Employment Bill proposes new statutory procedures forresolving disputes. Both sides will be forced to try to resolve disputes withinthe workplace before resorting to litigation. Sheila Fahy and Rachel C Smith examine the likely impact on employersAll relationships have their ups and downs and that of employment is nodifferent. It makes sense to establish at the outset how to deal with anybreakdown, perhaps even divorce, so that both parties know what to expect. TheEmployment Bill goes some way towards this ideal, but needs much clarificationduring its remaining parliamentary stages. Most applications to employment tribunals come from employees who have notattempted to resolve their disputes privately. Indeed, 60 per cent of smallemployers who defend claims in the tribunal system have no internaldisciplinary and grievance procedures. Armed with statistics like these and thethree-fold increase in the volume of claims to tribunals over the last decade,the Government has set out to reduce the number of workplace disputes that endin litigation. Ministers have tackled the issue of rising claims head-on by making thetribunals the last port of call. It has devised a scheme of minimum proceduralstandards for handling workplace dispute and grievances, and placed obligationsand incentives on both employer and employee to use them. The Governmentpredicts that its proposals will reduce the number of applications by 30,000 to40,000 per year. New procedures Two sets of procedures are introduced for each area: a standard procedurefor dismissals and disciplinary action (DDPs) with a modified version for casesof gross misconduct under the new regime. Similarly, grievance procedures (GPs)are also dealt with by both a standard procedure and a modified one where theperson raising the grievance is a former employee. The right to be accompaniedwill still apply to both new procedures. General requirements are that each step and action under the procedures mustbe taken without unreasonable delay, and that the timing and location ofmeetings must be reasonable, and allow both sides to put their case. A moresenior manager than attended the first meeting should, as far as is reasonablypracticable, represent the employer at appeal meetings. These minimum standards are mandatory for all employers and will becomeincorporated into every contract of employment. Of course, many employers haveenhanced procedures which mirror the Acas standard. The Employment Bill caters for this by stating that the minimum standardsshall not affect employers’ procedures that are additional to, and consistentwith, the statutory procedures. However, it does mean that there are now twostandards: the statutory minimum and the Acas enhanced model. Much comment has been made about the dual standard during the Bill’s passagethrough Parliament. Many MPs are concerned that the statutory model willinterfere with the Acas Code of Practice and employers will opt for the minimumstandards. The minister responsible for the Bill, Alan Johnson, responded by sayingthat the employment tribunals will still use the Acas code as their benchmark.This raises questions about the usefulness of minimum standards that fall shortof those required by a tribunal. It may well be that tribunals will expect higher standards from employerswith larger resources whereas small businesses can get away with the statutoryminimum. Hopefully, this point will be made clear by the time the Bill reachesthe statute book. The extent to which a statutory minimum standard applies to redundancydismissal also requires clarification. On reading the Bill, there is no reasonto assume it will not apply. This should not, in itself, create difficultiesfor those employers facing genuine redundancy situations. However, it might be problematic if the fairness of the selection process isin doubt, or if the true reason for the dismissal relates to performance ratherthan redundancy. If the employer intends to rehire to fill the position of adismissed former employee, recording written reasons could presentdifficulties. Presumably the written reasoning will need to record some detail regardingselection, emphasising the need for fair selection criteria. These potentialramifications are likely to increase an employer’s appetite for settlement orthe imposition of more rigorous standards. Sticks and carrots To ensure the employment tribunal is a place of last resort, the Bill haswoven a number of carrots and sticks into its processes. A new category ofunfair dismissal has been introduced for employee redress against employers whofail to follow the relevant statutory procedure. However, there is a defence available to employers if it can be shown thatthe failure to follow procedures would have made no difference to the outcomeand the employee would have been dismissed anyway. As the Bill is currentlydrafted, the ‘no difference’ defence would apply to the statutory minimum.However, the minister responsible for the Bill has made it clear that thisdefence is only available to employers that have complied with the statutoryminimum, but have made a minor compromise on their enhanced procedures. The ramifications of failing to follow standards may go even further thanthe Bill envisages. Since the statutory model will be an implied term of theemployment contract, failing to follow it will be a breach of contract. In suchcases, employers will not be able to rely on post-termination restrictions,such as restrictive covenants, once the employee has departed. This may haveserious consequences in the case of senior employees whose departures are oftennegotiated, and are frequently in breach of disciplinary procedures. Employee incentives Employees too are encouraged to use the new procedures. Employment tribunalswill be required to reduce compensatory awards for those who failed to use theprocedures before bringing a claim to the tribunal. The reduction will rangefrom 10 per cent to 50 per cent, but may be less than 10 per cent if such areduction would be unjust or inequitable. One of the most controversial aspects of the Bill is the possibility ofexcluding claims from employment tribunals where employees have made use of thestatutory procedures. Very little detail is known about this provision, but theBill is drafted to give the Secretary of State the power to make regulationsfor this purpose. Employers should watch the situation carefully. Standard disciplinary procedure– Step 1 – statement of groundsfor action and invitation to meeting The employer must set out in writing the employee’s allegedconduct, characteristics, or other circumstances leading to contemplation ofdismissal or disciplinary action against the employee. The employer must send acopy to the employee and invite the employee to attend a meeting to discuss thematter.– Step 2 – the meeting The meeting must take place before action is taken, except inthe case of suspension. The employee must take all reasonable steps to attendthe meeting.  After the meeting, theemployer must inform the employee of its decision, and notify a right of appealshould the employee not be satisfied with the decision.– Step 3 – the appealAn employee wishing to appeal must inform the employer, and theemployer must invite the employee to attend a further meeting. The employeemust take all reasonable steps to attend the meeting. The appeal meeting neednot take place before the dismissal or disciplinary action takes effect. Afterthe appeal meeting, the employer must inform the employee of his final decision.– Modified procedureIn cases of gross misconduct, the employer must provide astatement of grounds for summary dismissal, notify the right of appeal, andarrange an appeal meeting if requested.Standard grievance procedure– Step 1 – Statement of grievance The employee must set out the grievance in writing and send acopy of the grievance to the employer.– Step 2 – The meeting The employer must invite the employee to at least one meetingto discuss the grievance. The employee must take all reasonable steps to attendthe meeting. After the meeting, the employer must inform the employee of itsdecision as to its response to the grievance, and notify a right of appealshould the employee not be satisfied with with the decision.– Step 3 – The appeal An employee wishing to appeal must inform the employer, and theemployer must invite the employee to attend a further meeting. The employeemust take all reasonable steps to attend the meeting. After the appeal meeting,the employer must inform the employee of its final decision. Previous Article Next Article Related posts:No related photos. Comments are closed. last_img read more