Employers can influence law on workplace disputes

Many employers have been saying it for years and now they’ve got official backing: the current procedures for dealing with workplace disputes are flawed and need to be overhauled.

That’s the conclusion of a review commissioned by the Department of Trade and Industry.

Now employers, employees and other interested parties can say how they think the system should be improved as the government embarks on a public consultation on the issue. The review of the 2004 Dispute Resolution Regulations was carried out by Michael Gibbons, a member of the DTI’s Ministerial Challenge Panel and of the Better Regulation Commission.

Mr Gibbons said the average cost to businesses of defending an employment tribunal claim has recently been estimated to be around £9,000. “The financial cost to employees is lower but there are also very significant non-financial costs, including stress and damaged employment prospects. The dispute resolution system costs the Government around £120 million per year.”

He recommends that the government should repeal the current regulations and review the whole system. Mr Gibbons said: “In conducting this Review I was struck by the overwhelming consensus that the intentions of the 2004 Dispute Resolution Regulations were sound and there was a genuine attempt to keep them simple. However, they have had unintended consequences which have outweighed their benefits. I have therefore made recommendations to bring about effective resolution of disputes as early as possible.”

The recommendations include producing clear, simple, non-prescriptive guidelines on grievances, discipline and dismissal in the workplace, for employers and employees. He also wants to ensure there are incentives to comply with the new guidelines, by maintaining and expanding employment tribunals’ discretion to take into account reasonableness of behaviour and procedure when making awards and cost orders.

The government consultation will focus on a wide range of issues such as whether there should be a new way of dealing with straightforward claims without the need for employment tribunal hearings, and whether there should be a reformed tribunal system with simplified processes and timings.

Views are sought from businesses, individuals, trade unions, representative bodies, and other interested parties. The consultation will close on 20 June 2007.

The need to look again at the Dispute Resolution Regulations is borne out by the figures.

The changes introduced in 2004 did lead to a significant drop in the number of claims brought before the Employment Tribunal Service, but the success was short lived. After a temporary respite, the number during 2005 rose by a third to 115,000, marking a quick return to the levels seen before the changes were introduced.

Faced with such a deluge of rising figures it’s not surprising that so many employers have been losing faith in the tribunal system. According to a recent survey by the CBI, many firms settle cases they have a strong chance of winning because they fear the cost of going to tribunals.

Nevertheless, employers should not give in too easily when faced by unreasonable claims. It’s easy to see a firm’s dilemma if they feel the tribunal system is more trouble than it’s worth, but if everyone simply gives in then it encourages more people to proceed with weak cases and the problem snowballs.

Sometimes it’s cheaper to stand your ground and fight. A good example of this is the case of the deputy head teacher who recently sought £1m compensation for bullying and intimidation after claiming she’d been forced to use a chair that made embarrassing noises every time she sat down.
The tribunal ruled that she was neither unfairly dismissed nor discriminated against. Ironically, it may be the fact that she was claiming so much that led to her defeat. Had her demands been more modest her employers might have decided that it was cheaper to settle out of court.
If they had taken that decision then clearly an injustice would have been done and taxpayers’ money would have been wasted on undeserved compensation.

As in so many things, prevention is better than cure. Putting the correct employment policies in place helps to ensure that problems to do with pay, staff relations, discrimination and so on don’t occur in the first place. When cases do slip through the net, the employer is more likely to succeed at a tribunal if he can show that he followed the company’s own published and properly drawn up dispute procedures.

A little foresight and planning combined with properly drawn up policies can save thousands of pounds in the long run.

For more informartion contact Sally Laughton by emailing slaughton@andersonssolicitors.co.uk