Under the Bill, the key purpose of which is to implement the recommendations of the Gibbons Review of Employment Dispute Resolution, the three-step statutory discipline and dismissal and grievance procedures will be repealed.
The Bill also contains a provision allowing tribunals to increase or decrease compensation awarded in successful cases by up to 25% in all of the main tribunal jurisdictions (i.e. not limited to unfair dismissal claims) where either party has unreasonably failed to comply with the new Code.
Penalties
So, for example, unlike the position under the statutory three-step procedures, employers will not automatically be found to have unfairly dismissed an employee if they breach a provision of the Code.
However, in deciding whether the employer unfairly dismissed the employee, the tribunal can consider whether the employer failed to follow a provision of the Code, and has discretion to uplift compensation by up to 25%.
The drafting of the Code assumes huge significance, therefore, given the powers which will be given to tribunals to adjust compensation for breach of its content.
It is crucial to ensure the drafting is clear to avoid the kind of unnecessary satellite litigation that has bedevilled the operation of the statutory grievance procedure.
For example, can tribunals adjust compensation where the parties have not acted on this advice in the Code: “Recourse to an employment tribunal should only be a last resort”? EEF is, therefore, making many detailed comments on the wording of the draft with the aim of preventing such problems.
EEF response to the Code
Broadly speaking, EEF welcomes the format of the new Code. First, it is short which is very important for practitioners.
Second, the approach the Code advises employers to take when handling workplace disputes retains many of the best features of the statutory 3-step procedures which it replaces. This means that those employers who followed them will not need to make significant changes to their practices and procedures.
Third, we are pleased that, to a significant extent, the Code is drafted on a principles basis. The Code largely concentrates on setting out for employers the essential things they need to do to ensure they act fairly. In most situations this will involve complying with the basic principles of natural justice. At its most simple this means, before an employer makes a disciplinary or grievance decision, it should establish the facts, allow a person to make their case, and offer an appeal.
EEF believes, though, that Acas can do more to draft the Code to ensure it is ‘principles-based’ rather than procedure driven. We think it is important to achieve this so that, where litigation cannot be avoided, tribunals, when referring to the Code in any particular claim, place greater emphasis on the merits of the case rather than on the procedural steps that an employer took.
Obligations on employees?
However, we are disappointed that the Code is not more even handed. It does not place any detailed obligations on employees even though the Employment Bill provides for compensation to be reduced by up to 25% where an employee unreasonably fails to comply with the Code. It is difficult to envisage how an employee can ever be held to be in breach of the Code when the only obligation on them is to let the employer know the nature of their grievance.
Even this is imprecise. How are they to let the employer know? We think there is much to be gained by requiring employees to put their grievances in writing so that the employer can be sure it knows when a grievance is raised and what it is about.
Treatment of grievances
Under the existing statutory grievance procedure an employee is required to raise a grievance in a Step 1 letter before bringing a tribunal claim; if he or she does not, the tribunal will not accept the claim. The linking of the right to bring tribunal claims with the bringing of a grievance resulted in many employees and employers treating grievances more rigidly and formally than before the procedures came into force.
We welcome the breaking of this link as we believe it will allow employers and employees the flexibility to treat workplace problems earlier and more informally than under the existing regime. The new regime will also make it easier for employers and employees to try less costly alternatives to litigation - such as mediation - for handling disputes between co-workers, employee and manager, manager and manager, department against department, etc.
Implications for employers and how EEF can help
Clearly, the repeal of the statutory dispute resolution procedures is widely welcomed but what will the repeal mean in practice for your business?
EEF firmly believes that the Employment Bill provides a major opportunity for you to think more strategically about how difficulties in the workplace can be handled.
The Bill gives you the chance to put in place a fresh framework to ensure difficulties are resolved earlier, less formally and less costly than has been possible in recent years.
You also need to be aware that there will be significant penalties for those employers who do not take account of the Code when looking afresh at their practices and procedures.
In a new 1-day seminar EEF and ACAS will jointly show you how the new legal framework provides a golden opportunity for employers to spend less time managing disputes and more time managing the business.
Delegates will enjoy contributions from ACAS and EEF and key note speakers including Michael Gibbons and Ed Sweeney, Chairman of ACAS. Delegates will also have the opportunity to develop an action plan on dispute resolution for their own business.
Consultation on the Code
The consultation period on the draft Code closes on 25 July. ACAS is also consulting on the drafting of non-statutory guidance on handling discipline and grievances at work, designed to supplement the Code.
The two documents can be accessed via the ACAS website:
‘Draft Code of Practice on discipline and grievance’, http://www.acas.org.uk/index.aspx?articleid=2060
and
‘Discipline and grievances at work: draft ACAS Guide’
http://www.acas.org.uk/index.aspx?articleid=2080