Dispute resolution procedures in dispute

proposals published by the Government on 9 July 2003 setting out how dispute
resolution procedures will operate in practice may well create more problems
than they solve if they are implemented in their current form, writes Makbool
Javaid of DLA.

Employment Act 2002 (the EA 2002) established statutory minimum dismissal and
grievance procedures (SDPs and SGPs) aimed at getting employees to sort out
problems with their employers in the workplace, rather than in an employment
tribunal. The Government wants to have the procedures in place by October 2004,
but regulations are needed to establish when the SDPs and SGPs apply and how
they will work. The key proposals are as follows:



to Follow:


to Follow


3 Step SDP

to: (i) Disciplinary action in the form of suspension without pay or on
reduced pay; or
(ii) Dismissals involving capability, conduct, redundancy or some other
substantial reason

automatically unfair, procedurally.

award of 4 week’s pay.

award increased between 10-50
per cent

procedure not initiated, a complaint to a tribunal will be inadmissible.

If procedure initiated, but not completed, any compensation award decreased
between 10-50 per cent

2 Step SDP

after dismissal where: (i) employment cannot possibly continue, e.g. it would
break the law or the business collapses; or

in a small sub-set of ‘exceptional situation’ gross misconduct cases instant
dismissal is fair (not
defined as yet)

3 Step SGP

during employment where employee aggrieved by: (i) Employer’s actions on
non-capability/conduct issues, e.g. working conditions; or (ii) actions taken
by colleagues.

award increased between 10-50 per cent

cannot lodge a tribunal claim unless Step One has been completed and 28 days
have expired.

procedure initiated, but not completed, any compensation award decreased
between 10-50 per cent


2 Step SGP

where 3 Step SGP would apply but employment has ended and: (i) the parties
agree in writing that the modified 2 Step SGP applies; or
(ii) it is not reasonable for one party to take the next step, e.g. the
ex-employee has another job and cannot attend a meeting with the previous




Government believes that in some circumstances the statutory procedures cannot
be followed.

proposed exemptions include:

Where one party acts in a violent, abusive or unacceptable manner; examples
given are a threat of harm or one party has been subject to harassment;

Factors beyond the control of either party make it impossible to proceed for
the foreseeable future; the Government believes this could include long-term
ill-health, incapacity, or the immediate closure of a business.

the Act provided for the statutory procedures to become an implied term of all
contracts of employment, the Government has decided to ‘wait and see’ before
invoking this provision.

The  proposals are already provoking criticism as
being too complex and in conflict with the ACAS Code of Practice dealing with
disciplinary and grievance issues. Indeed, there are certain indications in the
consultation document that the Government has either failed to understand or is
effectively trying to re-write the law of unfair dismissal.  

outlining the circumstances where the Government believes an employer has no
choice but to dismiss without delay – the example is given of a bus driver
losing his or her licence – when case law dictates that a reasonable employer
looks for alternative employment in such circumstances. Long-term ill-health is
given as an example of a situation where employers will not be required to
follow an SDP, but yet the well established principles of ‘reasonableness’
require obtaining a medical opinion, consultation, consideration of alternative
work and or reasonable adjustments where disability is concerned.

cases are also a matter where the Government believes the procedures need not
apply, so it may well continue to be the case that the first an employer hears
of a harassment claim is when they receive notification of the claim. An
argument has been put forward that requiring employees to raise a formal
grievance in such circumstances may weaken the level of protection already
provided, but it is difficult to see how this can be the case when the
‘exemption’ conflicts with the European Commission Code of Practice on
combating sexual harassment, which recommends that employers provide employees
with informal and formal complaint mechanisms to halt unacceptable behaviour.

the proposals brings to mind the case of the lost driver who, on asking a
passer by for directions, is told: "This is not a good place to start
from". Having formulated the procedures, it seems the Government is now
trying to figure out how to use them, when it should have been the problems
dictating the solutions, not the other way round. Being prescriptive about
‘utterly futile’ situations where no consultation is needed before dismissal or
allowing harassment claims to proceed without no formal attempt to resolve the
problem in-house are just two examples of the dangerous path that is being

full details of the proposals are available directly from the DTI website at www.dti.gov.uk and consultation closes
Wednesday 29 October 2003.

Javaid is partner at law firm DLA.  makbool.javaid@dla.com   

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