Dispute resolution legislation - FAQs

Employment
relations minister Gerry Sutcliffe explains what the forthcoming dispute
resolution laws will mean for employers and employees

New
dispute resolution legislation takes effect from 1 October 2004, and applies to
all employers and employees. It will affect a wide range of employment rights
disputes, including those about discrimination, unfair dismissal, working time
and some collective rights. Here we answer questions on the forthcoming
legislation.

Why
has this legislation been introduced?

The
statutory dispute resolution procedures aim to improve the resolution of
workplace disputes, by setting a new minimum standard framework. While many
employers already use good dispute resolution mechanisms, a large number have
inadequate or non-existent procedures, or indeed do not use the ones they have
in place.

Are
these procedures really necessary?

The
regulations provide a framework to assist employers and employees in handling
disputes when and where they happen – early on and in the workplace. This benefits
both parties.

What
is the current situation?

The
current system of dispute resolution works very differently in each firm. Some
employers do not have or do not consistently apply adequate disciplinary
procedures, and many employees are unwilling to raise grievances in the
workplace. In this case, an employee’s only opportunity to raise a problem may
be through an Employment Tribunal. This is clearly an unsatisfactory solution
for all parties concerned.

How
is the Department of Trade and Industry (DTI) letting employers and employees
know about their new responsibilities?

An
awareness campaign began in July 2003 during the consultation phase with a
series of targeted briefings to employer and employee intermediary
organisations. Activities will be further intensified as we move closer to the
implementation date.

What
are those activities?

There
will be a second series of briefings building on those given last year. These
will be backed up by two direct mail shots to businesses. In addition, several
trade associations and unions are holding seminars/workshops to generate
awareness. The DTI is supporting the Citizens’ Advice Bureau’s training
programme for their advisers and the production of guidance for employees.

Are
there any exemptions to the new legislation?

If
either party is violent, abusive or behaves in an unacceptable way, or if there
are factors that make it effectively impossible to go through the minimum
standards, then the statutory procedures needn’t be followed. Similarly, if the
issue is already being discussed ‘collectively’ with unions or other employee
representatives, then it is not necessary for individual discussions to occur.

Questions
for employers

What
happens if I don’t comply?

If
the grievance ends up at an Employment Tribunal and the minimum procedure has
not been followed, penalties will be imposed. For an employer, ignoring the
process could result in a financial penalty being imposed at a tribunal.

Are
there any measurable benefits of complying with these procedures?

Tribunal
cases create uncertainty and stress for both parties, and tribunals currently
cost industry more than £220m each year. Avoiding disputes in the workplace
will bring real business benefits such as: saving money on recruitment, legal
expenses, penalties; saving time by resolving issues before they snowball;
avoiding stress; avoiding financial penalties; reducing employee turnover; and
improving staff relations.

Is
this just another example of more ‘red tape’ for business?

The
DTI’s aim is to make things as straightforward as possible. Those businesses
that don’t have existing mechanisms for handling disputes will now have to put
them in place. The DTI will be providing guidance and standard templates for
their use, which should help to make the process easy to follow. Balanced
against this will be the reduction in ‘red tape’ involved in dealing with a
tribunal case.

How
much will it cost me?

All
businesses will face a one-off adjustment cost ranging from £99 (for those that
have no mechanisms in place) to £12 (those that need to check their existing
mechanisms against the new ones). Balanced against this are the benefits, such
as savings on employment tribunal costs and better employment relations,
productivity, and staff retention.

I’m
a small business – am I being discriminated against?

No.
True, smaller firms are more likely to have insufficient dispute resolutions in
place than larger firms, but they actually stand to gain – both financially and
with a more stable workforce. However,
consultation with small organisations has been carried out with the aim of
helping to limit the burden. Where possible, the DTI is finding ways of helping
them to set up (where necessary) the requisite procedures.

Questions
for employees

What
happens if I don’t comply?

If
the grievance ends up at an Employment Tribunal and the minimum procedure has
not been followed, penalties will be imposed. If an employee does not follow
the process, their tribunal case could be disallowed, or any compensation
reduced.

Are
there any measurable benefits of complying with these procedures?

The
new legislation will help employees save money on potential legal expenses,
save time, avoid stress, and generate a more open working environment and
potential financial penalties if the minimum process is not followed.

As
an employee, won’t I be worse off?

The
new procedures give employees new rights as well as placing a new
responsibility on the employee. They also stand to gain from having workplace
problems sorted out locally, in terms of saving money (legal expenses), time,
stress and potential financial penalties if the minimum process is not followed.

Key
facts

–
Sixty-four per cent of applications to tribunals come from employees who have
not held a meeting to resolve the problem directly with their employer before
an application was made

–
Eighty-eight per cent of workplaces with 25 or more employees already have
disciplinary and grievance procedures

–
Only 60 per cent of small businesses (organisations employing 10-99 people)
have written grievance or disciplinary procedures

–
Virtually all procedures (99 per cent) have an appeal stage

–
Of workplaces with procedures, only 23 per cent said they had used their formal
procedures in a previous 12-month period

–
Half the employers facing a tribunal claim did not have a procedure to deal
with the problem

–
Of those employers with formal procedures, 27 per cent had not used them in
dealing with the issue that had gone to the Employment Tribunal, and a further
14 per cent had only used them in part

–
Only 15-25 per cent of disputes that involve a breach of legal rights are
believed to go to a tribunal

–
A few cases have led to large awards, particularly in relation to
discrimination, but most tribunal awards aren’t big. The median award for
unfair dismissal in 2000/01, for example, was £2,744.

www.dti.gov.uk