Resolving Disputes Early - The Legal Framework

‘The Government should challenge all employer and employee organisations to commit to implementing and promoting early dispute resolution, e.g. through greater use of in-house mediation, early neutral evaluation, and provisions in contracts of employment’. (Michael Gibbons, Review of Employment Dispute Resolution, March 2007)

The Employment Act 2002 (Dispute Resolution) Regulations (the Dispute Resolution Regulations) came into force on 1 October 2004 in order to address perceived shortcomings in the dispute resolution system. The objectives of the 2004 changes were to enable the early identification of grievances, to encourage employers and employees to discuss disputes in the workplace, and to promote effective ways of resolving disputes without resorting to employment tribunals.

The Regulations require all employers and to follow minimum statutory procedures in dealing with dismissal, disciplinary action and grievances in the workplace. The procedures each consist of three steps: an initial letter, a meeting and an appeal.

There is also a statutory code of good practice in disciplinary and grievance situations produced by ACAS that sets out good practice beyond the statutory framework and is taken into account when determining the fairness of a dismissal but does not have to be strictly followed.

• Many organisations have well-developed internal procedures that go beyond what is set out in the ACAS Code.

• Some organisations make use of either internal or external mediation.

• ACAS can also be asked to conciliate on issues that may result in an employment tribunal claim.

Disputes involving a breach of legal rights can also be settled by arriving at an agreement which prevents employment tribunal claims being made either as a result of ACAS conciliation or if it is a compromise agreement. 

Recommendation to repeal Regulations by Michael Gibbons - March 2007

In December 2006 the Secretary of State, Alistair Darling asked Michael Gibbons to review employment dispute resolution in Great Britain.

The headline recommendation of his review is the complete repeal of the 2004 Dispute Resolution Regulations. Download his review NB: external link to PDF on DTI site.

Michael Gibbons states that ‘the strong consensus is that the principle behind the 2004 changes is sound: parties should be encouraged to resolve disputes at as early a stage as possible. However, there is a strong consensus that the attempt to achieve that objective through statutory procedures has been unsuccessful and has had unintended negative consequences’.

Rather than facilitating early resolution of disputes the Review found that the Regulations have ‘exacerbated and accelerated disputes’ owing to the fact that employers are concerned about a dismissal being found to be automatically unfair while an employee may find that their application has not been accepted by a Tribunal because either have failed to follow the procedures.

An employee with a grievance also usually has three months in which to lodge a tribunal complaint, ‘so even where employees want to resolve matters informally they may feel under pressure to get the formal process underway’.

Michael Gibbons has made a suite of recommendations the most significant of which is the repeal of the Regulations he has also made a very string case for the use of workplace mediation.

He states that ‘his vision is of a greatly increased role for mediation’ and that ‘encouraged by signs of success in the context of employment disputes elsewhere in the world, I commend increased use of mediation to employers, employees and practitioners in Great Britain’.

Michael Gibbons (2007) recommends the following action to promote early dispute resolution: