The Government has given notice to employers that stemming the tide of
litigation at employment tribunals is their responsibility. But alternative
dispute resolution has yet to catch on in the workplace. Lucie Carrington looks
at some promising developments
Pressure is on employers, workers and their representatives to find
alternatives to the law when it comes to settling workplace disputes. The
massive increase in tribunal cases and levels of compensation over the past few
years, and the Government’s current determination to bolster in-house dispute
resolution procedures through the Employment Bill and other proposed
legislation have all added urgency to the search for other ways out.
Ten months ago arbitration and conciliation service Acas launched an
arbitration scheme for cases of unfair dismissal. It offers a quick,
confidential and less formal process than a tribunal. But the arbitrator’s view
is final and there can be no recourse to an employment tribunal if either party
is unhappy with the outcome. So far the scheme has not been hugely successful
with only seven cases having come forward.
This is not the only form of alternative dispute resolution (ADR) that
employers and their advisers are considering. Mediation is becoming a
fashionable skill in the legal profession as more people try to avoid lengthy
and costly legal action. It is already growing in popularity as a solution to
business disputes. Mark Mansell, a partner in the employment department at
Allen & Overy is working on a pilot mediation scheme with QC John Bowers.
He is convinced it has great potential as a way of resolving workplace issues.
"It came out of the view that employment tribunals weren’t the best way
of resolving disputes, particularly in discrimination or harassment cases where
there might be some possibility of an employee staying in employment,"
"Look at the experience of other countries such as the US, Australia
and New Zealand where mediation is a more important part of the HR armoury for
"Given the larger awards and the hike in claims, it’s only a matter of
time before employers here start to think that tribunals simply aren’t the best
way of resolving disputes. At the very least we must give other ways of doing
things a go," he says.
Degree of training
Some ADR services, such as Bristol-based ADR Group, insist that mediators
should be legally trained but not all mediation services follow this rule.
Certainly there will be cases where mediators need some expert knowledge but
Acas, for example, keeps a list of people who are trained in mediation but not
necessarily legally qualified.
The Allen & Overy pilot mediation scheme involves both lawyers and
non-lawyers although, once again, they are all trained in mediation. Whatever
the case, the mediator has to be accepted by both parties.
The pilot involves two mediators for each case – one a lawyer, probably an
employment lawyer with mediation experience, and the other a trained and
experienced mediator. Both parties come together for an initial meeting and to
present their case. "This could be the first time both have aired their
arguments to each other," Mansell says.
They then retire to different rooms while the mediators shuffle between them
with a view to their coming to some sort of agreement. A major part of the
mediation is working out the parameters for a settlement. It could be that
someone wants financial compensation, or it may be the employee just wants an
apology or recognition that a mistake has been made. "Often money is a bad
way to resolve these sorts of problems," says Mansell.
The process should last about a day. However, it will also involve some
preparation time, though Mansell is at pains to point out that it is not a
legal process: employers are not expected to justify every action their
managers have taken. It is also a voluntary process, which means that either
party can withdraw at any time and opt for an employment tribunal instead.
So far the process has been used in only four cases. Mansell wants to
complete about half a dozen before analysing them, working out any changes and
offering it as a service to employers. Employers can then offer it to staff as
an option for settling unresolved grievances.
Employers are also trying to find their own ways through the tribunal claims
swamping corporate in-trays. Armed services retailer Naafi introduced its own
in-house ADR scheme more than 18 months ago (Employers’ Law, June 2000). The
scheme was set up in partnership with Amicus, formerly the MSF union, to deal
speedily with unfair dismissal claims.
If it becomes clear that management has acted fairly and properly then the
union will not support an employee who wants to take the case further. If the
union thinks there is a case to answer then it goes to arbitration or possibly
an employment tribunal.
So far it has proved very successful with no cases making it as far as
tribunal, says HR director Mike Nicholson. He believes it could work for
non-unionised firms too – all they need is some form of employee representation
and the will to discuss unfair dismissal claims frankly.
Ironically, the scheme is not open to non-unionised staff at Naafi – who
probably account for two thirds of the workforce – because of the partnership
deal with Amicus. "From the union’s point of view it is a membership
benefit and to apply it to all staff would be to undermine their efforts to
recruit members, and our deal with them," Nicholson says.
However, the non-unionised majority almost certainly benefits from the
effort Nicholson and his HR colleagues have put into improving the standard of
management in the organisation. All 600 line managers are now trained in
grievance and disciplinary procedures and well versed in Naafi’s anti-bullying
policy. "It’s a very significant part of our ADR scheme. We have some
excellent HR policies and processes but their effectiveness is down to how
managers implement them at the front line," Nicholson says.
It is a point echoed by Yvonne Bennion, a policy specialist with the
Industrial Society makes. Last year she co-authored the society’s own report on
ADR: Courts or Compromise. "Personnel managers often feel helpless because
they’ve been let down by line managers who act without thinking or don’t follow
the rules," Bennion says.
She suggests that if employers are really serious about resolving workplace
disputes in house, they have to involve managers across the organisation.
Unfortunately, the Government’s proposals on dispute resolution in the
Employment Bill are unlikely to help personnel managers at this level. The Bill
sets out minimum disciplinary and grievance procedures that employers must
operate (see page 16). Employers who don’t follow the disciplinary procedures
are likely to be heavily penalised while employees who don’t use the grievance
procedure will never reach a tribunal.
It sounds great except that the minimum standards are not as demanding as
the existing Acas codes of practice which were revised only a year ago, and
which most large firms say they implement. In addition, the Bill seems to be revoking
what is known as the Polkey principle. This has been around since the late
1980s and effectively means that tribunals can find against employers who do
not follow their own procedures, even if the outcome would have been the same.
"The bill is pulling in both ways," says Christopher Mordue, an
associate in the employment department at Pinsent Curtis Biddle. "It is
incorporating statutory minimum standards into every employment contract while,
at the same time, attempting to get rid of the Polkey principle."
It’s a pretty radical change to the tribunal regime but one that is likely
to leave employers confused, even if as Mordue suspects, tribunals continue to
apply the Polkey principle anyway.
At the same time the TUC fears that the Government’s plans will prevent
workers pursuing their right to seek justice through the legal system. "We
are keen for firms to have good disciplinary and grievance procedures but
stopping people going to employment tribunal is philosophically the wrong approach,"
says senior employment rights officer Sarah Veale.
Yvonne Bennion backs her up. "Of course it’s right to pursue
alternatives, but not at the expense of limiting the rights that people have in
law," she says. "Who is the government to deny people their day in
A better approach would be to pump more resources into Acas so that it can
do the job it is good at – helping employers keep workplace disputes away from
the tribunal, according to both the Industrial Society and the Engineering
Acas has a statutory duty to offer conciliation for every tribunal
application. Last year (2000/01) the organisation conciliated in more than
100,000 individual applications out of 130,000 claims made. Seventy per cent of
those cases were subsequently either settled or withdrawn.
Admittedly the Government has said it wants Acas to increase the work it
does with smaller firms through workshops and conferences but, given the
figures, it seems hard to believe that ministers have not made Acas the
lynchpin in the drive to help firms resolve disputes in-house.
To conciliate, arbitrate or mediate?
An independent arbitrator is appointed to decide the outcome of
a dispute. He or she will take evidence but in a less formal setting than a
tribunal or court or law. The idea is that the arbitrator’s decision is final
and may well be legally binding.
Acas is probably best known for the arbitration it provides in
collective disputes between employers and unions. But it now also offers an
individual arbitration scheme for unfair dismissal cases.
A third party is brought in to help the parties in a dispute
come to some sort of compromise and find a settlement that is acceptable to all
sides. Conciliation is not about offering possible routes out but helping
parties find their own solutions. Conciliators are paid Acas employees and
trained in conciliation techniques but not necessarily legally trained.
This is similar to conciliation but mediators are more
proactive in steering different parties towards a conclusion and will suggest
possible ways to move the process forward. Acas also offers what it calls
advisory mediation to organisations that have problems which have yet to reach the
impasse of a formal dispute.
Early neutral evaluation
This started in the US. An objective observer studies the
evidence with a view to giving both parties in a dispute an early and frank
evaluation of the merits of a case.
Sources: Acas, The Industrial Society, ADR Group
How to make mediation work
As with any alternatives to the law,
both parties have to want to resolve the dispute if they are considering
mediation. If either wants to have its day in court then mediation is not the
– Both parties must be prepared to be flexible; they must think
about what they are prepared to accept and what they are prepared to concede.
– Mediators aim to offer possible solutions, to steer and
cajole parties to a conclusion, so both parties also have to be willing to take
– The process has to be confidential as well as voluntary.
– It is not a formal legal process, so turning up with box
files full of evidence won’t impress. Mansell also suggests both employers and
employees make a better impression if they present their own introductory
– Mediators cannot force the parties to settle. Employees can
still use the legal system if they feel they have not had justice.