Elaine Heslop looks at the changes to employment dispute resolution procedures and the subsequent implications for solicitors


The recent changes in employment law relating to disputes procedures and tribunal procedures mean a fresh approach to the resolution of employment disputes and the conduct of cases in the employment tribunals. In some respects, they also present a challenge to employment law practitioners.


The law is to be found in a number of places. The Employment Act 2002 (Disputes Resolution) Regulations 2004, came into force on 1 October 2004. At the same time, the employment tribunal rules received an overhaul and were in force, with some transitional provisions, from the same date (Employment Tribunals (Constitution and Rules of Procedure) 2004 (the rules)).


The regulations have their origins in sections 29-33 and schedules 2 and 4 to the Employment Act 2002, which provide for statutory disputes procedures to be used in the workplace, either in standard or modified form. These sections also give employment tribunals powers to block or delay new claims where procedures have not been commenced or the statutory waiting period of 28 days has not been complied with by the employee/claimant prior to filing their claim. Powers are also given to the tribunals to penalise or reward via compensation reductions or uplifts where procedures have not been used.



One principle behind the introduction of the regulations was to reduce the number of claims going into the employment tribunal system. The Advisory, Conciliation, and Arbitration Service (ACAS) records that in 2003/2004 a total of 176,505 claims were issued in the employment tribunals, an 8% increase on the two previous years. Figures were inflated this year owing to the 7,000 sex discrimination claims filed on the back of Thompson v DWP (the 'collar and tie' case). Nevertheless, the figures are high, as is the financial, temporal and emotional cost of employment tribunal litigation to both employer and employee.



In addition, the notion of a workplace disputes procedure mirrors the approach of encouraging alternative dispute resolution, which is taking root in the civil court system. This now includes costs warnings for intransigence (Halsey v Milton Keynes NHS Trust (2004) EWCA 576). In employment law, the introduction of statutory fixed conciliation periods in rule 22 of schedule 1 to the rules, during which no hearings should take place in the employment tribunals, goes further than anything currently in the Civil Procedure Rules 1998.



The challenge to using the statutory disputes procedures concerns knowing to whom they apply, when they will need to be used and how they impact on litigation in the employment tribunal. They do contain uncertainties.


Firstly, it will be necessary to be clear about an individual's employment status as the procedures only apply to an 'employee'. The definitions of 'worker' and 'employee' are still unclear in some areas and often require specialised legal knowledge.


More confusingly, although the primary purpose would seem to be to encourage the settlement of disputes, the employer's requirement to use the statutory disciplinary and dismissal procedures applies to most dismissals, even apparently non-contentious dismissals.


There are exceptions. Employers can, for example, avoid using them where statutory consultation procedures apply for contemplated redundancies.


Less straightforward perhaps is the example of the employer who has no requirement to use the statutory procedures where the business has 'suddenly ceased to function', this being an event 'unforeseen' by an employer. These circumstances could be open to challenge by a dismissed employee claiming that the exception does not apply and the employer should be penalised for failing to use the disciplinary and dismissal procedures.


Another exception arises in circumstances where parties fear for their safety or that they will be harassed if they start or continue the procedures. `Harassment` carries the same definition as that in the most recent discrimination regulations (for example, the Employment Equality (Religion or Belief) Regulations 2003). It carries an objective test and is as yet largely untouched by case law. In addition, the procedures may be avoided or not completed 'if it is not practicable [...] within a reasonable time period` (regulation 11). Neither of these phrases is further defined in the regulations.


The statutory procedures feed into the new tribunal rules allowing the tribunal to take action for non-compliance. However, in some circumstances it is not clear when the tribunal would need to intervene. A good example is the constructive dismissal claim. Section 95(1)(c) of the Employment Rights Act 1996, defines as a dismissal a resignation by an employee entitled to resign by reason of the employer's conduct. Whether section 95(1)(c) applies to that employee will fall to be decided by a tribunal.


The disputes resolution regulations do not require employers to use disciplinary and dismissal procedures for a constructive dismissal, but they do require employees to use the statutory grievance procedure whenever they have a complaint about an action of their employers (regulation 6).


Therefore, an employee relying on section 95(1)(c) for an unfair dismissal claim should have used the grievance procedure. Should that issue be decided at the point of acceptance of the claim under the new rules (rule 3), or at a pre-hearing review, or at the conclusion of the main hearing when all the evidence has been heard?


Indeed, it is possible that the very existence of the disputes resolution regulations could mean that the number of employee grievances would increase. Employees may feel obliged to pursue the statutory procedures for a range of internal complaints, on the basis that a failure to do so means that they may not be permitted to start claims in the tribunal.


Employers may fear that they will be penalised at tribunal for not allowing employees to use the grievance procedure.


Once parties are in the tribunal system, the new rules provide a more prescriptive approach to case management. They contain the fixed conciliation periods for all claims except discrimination (for which no period is fixed) and they require the parties to assist the tribunal in its 'overriding objective' to ensure cases are heard fairly and expeditiously. These developments lend support to the concept of dispute resolution and allowing for fair hearings.


In addition, the new rules extend the circumstances in which costs can be awarded. These include preparation time orders and wasted costs orders. This incentive on the parties to avoid costs orders leads back to the notion that effort must now be made by the parties to avoid disputes and to try to conciliate.


In spite of some confusion in the way in which the disputes resolution regulations should operate, the new aspects of tribunal procedures underpin the initiative of resolving disputes.


Time will tell whether or not these new processes in employment law practice will become a blueprint for moves elsewhere in the legal system to cure some of the ills of litigation.



Elaine Heslop is a specialist employment law solicitor and lecturer for the London Metropolitan University and Chartered Institute of Personnel Development. She is co-author of Employment Tribunals: A Practical Guide, published in November by Law Society Publishing. The book can be ordered direct from Marston Book Services, tel: 01235 465 656.