Workplace Dispute Resolution - The new ACAS Code of Practice 2009
JUNE 2009
Resolving employment issues fairly in organisations takes some time, dedication and care for both employer and employee. It also requires compliance with specific legal regimes otherwise different problems arise.
The law changed – again - on 6 April 2009 when the new ACAS Code of Practice 2009 was introduced. This article sets out the changes and points to watch out for in future.
The old law - Dispute Resolution Regulations 2004
Over the last 5 years all employers had to comply with legally binding procedures known as the statutory Dispute Resolution Regulations (2004), brought in under the Employment Act 2002. They were introduced to set minimum fair standards for the conduct of internal disciplinary, dismissal and grievance procedures in the work-place.
The aim was to encourage more informal resolution of work-place disputes and reduce the number of claims being taken to the Employment Tribunals. The procedures imposed new legal obligations on both employers and employees. A three step procedure had to be followed :
1. put disciplinary allegations/a grievance in writing;
2. hold a meeting to discuss;
3. give a right of appeal against the decision.
In addition, there were other obligations during the process for both the employer and employee.
Not complying could be serious for either side if the case ended up in the Employment Tribunal, and many more seemed to do so. Non – compliance by the employer meant a dismissal being held “ automatically unfair”, even if the reason for dismissal itself was legally fair, with an uplift of up to 50% in compensation. An employee was not allowed to lodge a Tribunal claim against an employer without first submitting a formal grievance but the usual 3 month less one day time limit to lodge a claim was frequently automatically extended to 6 months.
The Regulations did not achieve the stated aims, led to more formality plus parties becoming tied up with formal grievances/satellite litigation in the Tribunal and they became widely discredited for causing more problems than they solved. So finally they have been repealed as of 6th April 2009 except for those workplace disputes which straddle that date – see important transitional provisions below.
The new law – ACAS statutory Code of Practice 2009 - all change?
The short answer is not quite – much remains the same on the basic procedures, the three step process above is still a required bare minimum plus appropriate investigation at the start, but there are a number of very important changes.
Employers must now comply with the new ACAS Code of Practice 2009, a deceptively short document of some 11 pages. However this is backed up by the ACAS Guide on Discipline and Grievances At Work of over 70 pages. Breach of the Guide alone does not lead to sanctions but unreasonable breach of the Code does.
The good news is that Code’s language and emphasis is different, employers are told they “should”, not that they “must”, or “will” do something. This indicates a major change in approach. Now it is only an unreasonable failure to comply which may lead to penalties being imposed in the Tribunal. Employers will now have the chance to explain non-compliance and the Tribunal must take the size and resources of an employer into account when deciding relevant cases.
The new core principles are :
1. prompt action, no unreasonable delay
2. consistency
3. appropriate investigations
4. provide information on the problem and an opportunity for the employee to respond
5. the right to be accompanied at any formal meeting
6. the opportunity to appeal.
Key changes
General
- Penalties for non compliance are reduced; adjustment of up to 25% of award for unreasonable failure to comply with the Code, but discretionary not obligatory for the Tribunal
- If appropriate, eg if a serious matter, the employee may have the right to be accompanied at investigation meetings also.
- Consultation – the Code states that employees and their representatives should be “involved” in the development of rules and procedures. It’s unclear how this will be interpreted by Tribunals.
- Code specifically encourages bringing in independent third parties, from outside if necessary, to help resolve disputes. It’s possible parties will be asked to at least explain why they did not do so if they end up in the Tribunal. More encouragement towards mediation?
Disciplinary and dismissal situations
- Code does NOT apply to redundancy dismissals (other legal requirements do, see ACAS advisory booklet on Redundancy Dismissals for details) or to the expiry of a fixed term contract.
- Code now applies where warnings being considered as a sanction eg giving the right to an appeal against such a sanction
- A decision may be made without a meeting if the employee persistently refuses to attend
- Employee should have a reasonable opportunity to ask questions, present evidence, call relevant witnesses and raise points about any information provided by witnesses. It may be that Tribunals will consider this gives some right to cross examine witnesses but perhaps by raising questions to be dealt with outside the meeting.
Grievances
- An employee is not required to lodge a grievance before lodging Tribunal claim
- No automatic extension of time to lodge Tribunal claim by lodging a grievance – back to 3 months less one day.
- Employers are not required to deal with post termination grievances. However If such a grievance raises issues of eg discrimination, then an employer should consider in any event at least investigating such allegations internally, to ensure they have taken reasonable steps in relation to carrying out their general duties in equality and diversity matters in the workplace.
Transitional provisions
The old statutory procedures STILL APPLY to dismissals or where relevant disciplinary action (including a warning) is taken before 6th April 2009, and for grievances where action complained of by an employee took place before that date. If the disputed activity straddles pre and post 6th April 2009 the provisions are more complicated about which regime applies, depending on the date a grievance or Tribunal claim is lodged and the type of claim. You should check these carefully.
What should you do now?
Read the new Code – and consult the Guidance. Apart from being sensible anyway, Employment Tribunals will expect any employer to have done so before implementing internal procedures. If you haven’t, and act in breach without good reason or have ultimate responsibility for such decisions, watch out.
Review your current policies/procedures immediately to check you are compliant. Hot spots to watch out for include giving a right of appeal against a warning; allowing an employee the right to “question” witnesses; allowing companions in serious investigation meetings; Tribunal time limits for any current cases; involving/informing employees of such dispute resolution procedures.
Monitor Employment Tribunal cases dealing with aspects of the Code. They will start to come through later this year from around September, and will give very helpful insight into how the new Code is being interpreted.
In summary – in any dispute act promptly, fairly and appropriately, using common sense and judgement, keeping the Code and Guide at your side.
ACAS Code of Practice 2009 and the ACAS Guide can be found at: www.acas.org.uk
Alison Downie is a partner and Head of Employment at Goodman Derrick LLP. She is the immediate past Chair and a current Exec Committee member of the Law Society Law Management Section. A version of this article will be published in the forthcoming Law Management Section publication “ Managing for Success”.
If you would like any further information about the issues raised in this newsletter, or any other aspect of employment law, please contact , Partner of Goodman Derrick LLP's Employment Department.
This guide is for general
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