Acas code of practice on disciplinary and grievance: What the changes mean for HR

Acas’s new workplace problem-solving process, a less prescriptive approach to dealing with grievance and disciplinary cases, comes into force on 6 April 2009. But does it herald a more benign era in employment relations?

Few in HR will mourn the passing of the statutory procedures for handling discipline and grievance issues. Within three years of being introduced in 2004, the total number of cases registered with the Employment Tribunal Service (ETS) rose by more than a third, creating the impression that employment relations had actually worsened as a result.

John Wrighthouse, HR director at Nationwide Building Society, describes the legislation as a disaster. “It is almost a metaphor for how not to manage employee relations,” he says.

Su Makin, head of Cobbetts HR consultancy, says it was meant to make life simpler, “but in reality just gave lawyers a lot more to fight over”.

Acas code of practice

The statutory procedures are being replaced on 6 April by a 45-point Acas code of practice, lifting the current legal requirement to deal with discipline and grievance issues in a fixed way. Instead, tribunals can increase or decrease any award made by up to 25% if they feel the code has been unreasonably breached.

The Advisory, Conciliation and Arbitration Service (Acas) says the emphasis will be on nipping problems in the bud and, where possible, dealing with them in the workplace. If cases do end up at a tribunal, decisions will be based on what is “fair and reasonable” rather than nit-picking over whether procedures were followed correctly.

But Devon Price, HR manager of train operating company Southern, reflects a common view that the code will make little or no difference to HR. “Southern has for many years operated agreed discipline and grievance procedures that reflect the Acas codes of conduct,” he says.

Jo Patterson, head of HR at Travelodge, says high standards are still necessary. “You still have to be sure there’s a mechanism for employees to be heard properly.”

Makin points out that any easing of pressure on the ETS is unlikely when redundancies are set to further increase this year. “When in a recession, more people go to tribunal, whether for redundancy or dismissal,” she says. “They’ve nothing to lose so are willing to take their chance.”

But Guy Guinan, a partner at Halliwells, believes HR may have some unexpected issues to contend with. “Because the employee does not need to submit a grievance any more, there could be more surprise claims.”

Jon Fisher, senior associate at Pinsent Masons, says the hand of claimants has been strengthened in some areas by the Acas code. “I’m glad to see the back of the existing processes but, in effect, it’s back to where we were four years ago. It’s not a brand new dawn.”

The Acas code: a new dawn

For Jane Bird, Acas’s dispute resolution review programme manager, a new dawn is just what the code does promise. She has spent the past 15 months developing it following publication of the review by Michael Gibbons into the working of the 2004 regulations.

“The whole thrust of the Gibbons report and of the new approach is very much about encouraging the resolution of workplace matters in the workplace,” she argues.

She believes one of the most promising areas of change will be the development of a service to conciliate before claims are registered with the ETS. Although this already happens in around 1,500 cases a year, it is not promoted. “The idea is that we pro-actively work on cases that come our way, particularly via our helpline.”

The number of conciliators is due to rise by a third to around 300, and the number of helpline staff by 50%, creating the equivalent of 150 full-time posts by April. Funding comes out of a package worth up to £37m over three years to help Acas reduce pressure on the ETS. Some question whether the money will be forthcoming given the economic circumstances. Chris Syder, head of employment at Davies Arnold Cooper, also warns that the service is likely to be overstretched because current restrictions on when Acas can offer conciliation are being removed.

Benefits of the new Acas code

But Bird is convinced the pre-conciliation service will cope with the volume of cases and have a significant impact as well. “We’re confident we’re launching a service that will make a very valuable contribution to reduce the number of cases that would go to an employment tribunal.”

She says that when the service was piloted, the average length of time it took to resolve cases was 14 days. “With an employment tribunal, it can take many, many months from the claim being lodged before any conclusion is reached.”

Bird thinks that providing the service at taxpayers’ expense will act as a catalyst for a culture change in employment relations. “Once people see that is a much better outcome than being locked up in court cases, I think things will move in that direction.”

Greater emphasis on the use of third–party mediation is also expected to contribute to this culture change. “There are cases that I have been involved in with external organisations that have gone on for an interminable amount of time and never seem to get resolved,” she says.

Bird believes these can sometimes be avoided if both parties are brought together by a mediator to find out what the issues are. “I think it will be very interesting to see how companies approach this.”

Concerns

For Wrighthouse, the prospect of a new, more benign era in employment relations remains distant. One of his main gripes is over-interpretation of the Acas code. “Employers don’t know what amounts to unreasonable failure to follow the Acas code or what relevant factors the tribunal will take into account. They are pretty significant points you do need to know.”

He says this uncertainty is compounded by the code remaining in draft form for so long. “Unless Acas produces a firm code that is not in draft, employers are still going to trip up.” Although the draft code is unlikely to be amended before April, when it is brought in force by the Employment Act 2008, Wrighthouse says it will then need case law to establish clarity. He argues that repeal of the statutory procedures has left a void which could actually damage employment relations. “You want to set off on the basis of having fair, reasonable procedures. If you have a void, you just have complexity and ambiguity.”

Bird argues that Acas code guidance gives as much clarification as possible. “As always when there is a new piece of legislation or statutory code of practice, developing case law is the main way in which the provisions are clarified,” she says.

Travelodge’s Patterson agrees. “Whenever there is a new piece of legislation, there is always different interpretation of things that have not been completely thought through. Until you start seeing how it pans out in practice, there will, I’m sure, be bumps along the way.”

Will third–party mediation become more popular?

Acas hopes that third–party mediation will become more popular as part of a cultural shift away from litigation.

Separate surveys last year by the Chartered Institute of Personnel and Development (CIPD) and law firm Dundas & Wilson found that most organisations still do not use it to resolve conflict at work, even though those that do extol its benefits.

Nationwide’s John Wrighthouse believes mediation does work with grievances because they mostly boil down to a lack of understanding and management not responding early enough to a situation. “But I struggle to understand how it will work in a disciplinary,” he says. “You have a different starting point.”

Devon Price of Southern believes the threat of a 25% uplift in any award against an employer for unreasonably failing to follow the code will make the mediation alternative less attractive.

Davies Arnold Cooper’s Chris Syder argues that mediation will not work fully until made obligatory. “Given the pressure on all businesses now, I don’t think this is the time for new processes to take off.”

However, Jo Patterson of Travelodge is considering using mediation on a formal basis for the first time as a result of the Acas code. “It’s something we do want to explore further to see if it’s beneficial to us,“ she says.

Tips for dealing with the Acas code

Jane Bird of Acas advises against ripping up any internal procedures based on the existing three-step process for grievance and discipline issues. “Make sure they are fit for purpose in the light of the new code. If you have trade union representatives, make sure you get buy-in from them.”

Chris Syder of Davies Arnold Cooper says recommendations in the guidance on the Acas code are easy to understand. “HR practitioners should read them and that should be their first port of call.”

John Wrighthouse of Nationwide warns against “popping champagne corks on 5 April”, because transitional arrangements for introducing the new Acas code mean that some elements of the statutory procedures remain in force until October. “People will get caught out by that if they’re not savvy enough,” he says.

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Jon Fisher of Pinsent Masons says two key changes in relation to disciplinary issues that could be levelled against employers. “The code says you should not have the same person investigating the complaint and then conducting the hearing. It also says suspensions should be kept to a minimum and kept under review.”

Su Makin of Cobbetts says certain organisations which have a process-driven approach to workplace conflict may need to become more flexible, but believes there is nothing difficult to get to grips with. “If you treat people properly, you naturally tick boxes as you go along.”