CIPD response to the DTI consultation
Introduction
With 127,000 members, the Chartered Institute of Personnel and Development (CIPD) is the largest body in Europe responsible for the management and development of people. Our response to the consultation paper is based on the practical experience of our members and others with extensive experience of workplace dispute resolution who have attended a series of meetings to discuss the consultation paper, or have let us have written comments. Our approach to issues of public policy is to ask “What works?” in the context of improving both employee well-being and business performance.
In the response below we set out our comments on the questions summarised on pages 28 to 30 of the consultation paper. However we read the Review of employment dispute resolution by Michael Gibbons as focusing heavily on the encouragement of a voluntary approach to encourage and enable more use of ADR techniques in order to settle disputes early. As Gibbons makes clear, this involves driving up awareness and demand for ADR services, promoting their benefits and encouraging culture change over time, and ensuring an adequate and timely supply of such services to meet demand.
The Institute strongly supports such an approach and in the annex we set out our initial response to the challenge in paragraph 4 of his recommendations for employer and employee bodies to commit to implementing and promoting early dispute resolution.
Resolving more disputes in the workplace (Questions 1 to 7)
CIPD members believe that the statutory dispute resolution procedures have not worked and should be repealed. The regulations have faced employers with serious difficulties in determining what is a “grievance”. They have added to the length and complexity (and probably the volume) of ET hearings. They have made employers more risk-averse and inclined to see that workplace differences are dealt with “by the book”, so reducing the chances of an early informal settlement. They have reinforced the legalism inherent in the tribunal process and made early dispute resolution a more distant aspiration in many cases.
Some members have suggested that the regulations may have had a positive effect in encouraging small firms to follow fair processes in disciplining employees. The overwhelming view is, however, that the regulations should be repealed and that any positive effect can better be secured by other means. It is abundantly clear that, in relation to a framework for handling discipline, grievances and dismissal, one size does not fit all.
Members accept that repeal of the regulations, in combination with other measures to provide for the more effective resolution of workplace disputes, may have unintended and unanticipated consequences. This underlines the need for the Government to proceed with great care and consult fully on specific proposals for replacing the regulations.
The Government should take full responsibility for the soundness and impact of its detailed proposals. Previous attempts to reform the dispute resolution system have not been notably effective and this underlines the difficulties in anticipating how the various parties will respond. Further changes in legislation should take place within the framework of a considered longer-term strategy for developing workplace dispute resolution processes, which should be undertaken in conjunction with all the interests involved.
The intention to encourage more effective workplace resolution remains sound, and guidance directed at employers, employees and tribunals is required if further progress is to be made in this direction. Members are positive about the value of the Acas Code of Practice on discipline and grievances. However the Code will need to be amended if it is to help employers and tribunals to focus on what matters, and be a basis for deciding if parties have behaved fairly and reasonably.
CIPD believes that Acas should be invited to produce high-level guidelines that reflect the principles of fairness and natural justice. These guidelines should be taken into account by employment tribunals in considering cases before them. They should not be too detailed, however, in specifying the precise actions required of employers or employees, or they would run the risk of reproducing the discredited regulations. The guidelines should help employers understand and implement those principles but allow room for them to do so in a way that is appropriate for the size and structure of the organisation. Similarly it would be important for tribunals to have – and to exercise – discretion in applying the principles in the guidelines. In this respect tribunals should be encouraged to adopt the principles of equity rather than strict interpretation.
But employers and employees would also welcome practical help and guidance in deciding how to deal with workplace conflict. The existing Acas Code – amended as needed - could fulfil this need, but should not be incorporated into the guidelines that tribunals are required to take into account. The amended Code should make clear the value of alternative dispute resolution processes and provide information and advice about how employers can develop their own internal arrangements and/or access help and support in this area, as suggested in the consultation paper.
Guidelines will only be effective if there are incentives for employers and employees to follow them. The likelihood that tribunals will find against parties that ignore the guidelines should in itself provide such an incentive. The issue of possible penalties in the form of costs orders against parties that fail to behave responsibly is something of a red herring. The risk of adverse tribunal findings is in itself a powerful sanction in relation to employers and in any case tribunals have proved reluctant to make extensive use of the powers they already have to make costs orders, particularly against claimants.
The law relating to procedural unfairness in unfair dismissal cases will need to be amended following repeal of the statutory procedures for dispute resolution. With the renewed emphasis on workplace procedure, it seems implausible to imagine that the law could revert to the pre-Polkey position where, if it could be shown that procedural irregularity in an otherwise fair dismissal would have made no difference to the outcome, the dismissal was fair. Equally it seems unnecessary and unhelpful to provide for alternative findings reflecting the balance of procedural and substantive unfairness in the dismissal. CIPD believes that the law should revert to the position before the introduction of the 2004 procedures.
The Government should not invite the CBI, TUC and others to produce guidelines aimed at encouraging and promoting early dispute resolution. There is every case for encouraging employer bodies and others to promote and encourage early dispute resolution and CIPD has identified a number of actions which it intends to take to this end (see annex). However it is sensible to have only a single set of “guidelines”, on the lines discussed above, so as to avoid duplication and inconsistency.
Beyond the workplace (questions 9 to 15)
There is a good case for introducing a service offering employers and employees robust advice as the “front end” of the claims process. A new helpline offering advice to claimants and employers, and small firms in particular, before claims reach the tribunal service, could have a useful role to play.
Acas is the obvious candidate to service the helpline. It would however need to operate the helpline rather differently from its current conciliation and advisory services, while maintaining its reputation for independence and impartiality. The helpline could better define the options, rather than advising whether or not to proceed to a tribunal hearing. It should also help the parties to identify the options facing them, the likely outcomes and how the parties might choose the most appropriate course of action to resolve the matter in light of their priorities, including time constraints and desired outcomes. It might be indicated that the use of mediation would enable the parties to better work together to influence a mutually agreeable outcome that otherwise may be beyond their control.
All those involved in the statutory process, including employment tribunal chairs, legal advisers and others will need to be persuaded of the legitimacy of Acas giving advice to claimants that may in effect discourage them from taking their case to a tribunal. The Government should be prepared to debate the issues publicly and explain the distinction between statutory employment rights and methods of enforcement, as well as between the enforcement of rights and the resolution of disputes.
Similar issues arise in relation to the proposal for providing a new entry point for ET applications. CIPD believes Acas should produce a leaflet in plain language setting out the facts about ET claims and outcomes, and encouraging employer and professional bodies, trade unions, Citizens Advice Bureaux and others to draw on its contents in their dealings with claimants and employers. There can be no effective substitute for winning the battle of ideas, and simply setting up new machinery that is not respected or trusted by key players would be self-defeating.
If the Government seeks to reduce the number of ET claims, the obvious answer is to reduce the volume of new employment regulation. However the next most effective solution is to find alternative methods of dealing with the more straightforward claims that currently fall within tribunals’ jurisdiction.
There is a good case for considering whether the current jurisdictions in relation to working time, unauthorised deductions, breach of contract and redundancy pay might more appropriately be enforced by other means. These are areas which seem less likely to raise issues requiring extensive investigation by a tribunal and/or discussion with the parties.
If the Government intends to retain employment tribunals’ existing jurisdictions, then simple monetary disputes about eg deductions from wages or redundancy payments might be dealt with by the Tribunals Service without the need for a full hearing, for example by a chair sitting alone. However there is a case for a more fundamental review of existing enforcement machinery, which would take account of the costs and benefits of alternative arrangements for employers, employees and the taxpayer.
One obvious model is enforcement of the minimum wage by Her Majesty's Revenue and Customs. However there are other options: for example, issues about working time could go to HSE (who already share responsibility for enforcing the working time regulations); while claims under the contract of employment might possibly revert to the civil courts (which currently retain a jurisdiction in this area).
Legal complexity does not require that issues should be decided by a tribunal: many administrative (non-judicial) bodies are required to apply complex legislation and in any case many ET claims raising significant legal issues are determined on appeal to higher courts. Employees' statutory rights would remain untouched: the only shift would be in the method of enforcement - which might in some cases turn out to be more effective. Remedies could focus less on compensating claimants and more on supporting good practice by employers and penalising those who fail to discharge their responsibilities.
CIPD believes that, whatever efforts are made by employers to improve their internal handling of disputes, they are unlikely to have a significant short-term impact on the level of ET claims. The majority of claims currently come from small firms and they will often be unable to supply experienced mediators from their own resources. This suggests that Acas services will be needed if mediation is to be available in such cases.
CIPD members believe strongly that Acas should be adequately resourced to provide effective alternative dispute resolution. Acas services are respected, independent and good value for money. Continued reductions in Acas resources would be damaging to good employee relations and to the Government‘s efforts to increase productivity.
Any service that is free at the point of delivery needs to have some means of prioritising between competing demands made on it. The criteria set out in paragraph 3.10 of the consultation paper seem sensible and should allow Acas to help in a high proportion of cases. However it might be helpful to offer further guidance to Acas and to tribunal chairs on the kinds of cases in which mediation is most likely to be effective. This is not so much an issue about resources as about focusing attention on ADR by employers and others and helping tribunal chairs to decide when it is desirable to penalise parties who have failed to respond to offers or suggestions about mediation. Research into employers’ current use of mediation and other ADR methods in the UK might be useful as a basis for drawing up such guidance.
CIPD supports the proposal to remove the strict time limits which apply to Acas’s duty to conciliate. These have not had the effect which was hoped for when they were introduced, and parties still settle at the door of the tribunal.
More effective employment tribunals (questions 16 to 28)
The existing claim form has been modified in recent years with the specific intention of providing information which is either essential or useful to tribunals. This has required some increase in length but the return is to save time later. It is unclear why the form should now be shortened. Simplification is a virtue but so is stability. It seems unlikely that requiring claimants to include an estimate of loss will be particularly helpful; some cases don’t come to a tribunal until many months after the claim form is filled in so the information may be irrelevant by the time the case is heard.
The issue of time limits for presenting claims to an employment tribunal is not particularly significant. Time limits are all 3 months other than equal pay and redundancy pay which are 6 months. CIPD is concerned that “simplifying” time limits would lead to a general rounding-up since it would not be practicable to remove or reduce existing entitlements. The issue of harmonisation of grounds for extension of time limits to submit claims is not one that has attracted significant attention from HR managers.
Better case management in terms of sorting out issues, documents and witnesses is absolutely essential and must clearly be in the interests of claimants, employers and Government. There may be a case for appointing legal officers to relieve tribunal chairs of some of the work involved, but members would be concerned if this work was allocated to unqualified staff. Legal officers could help the parties on case management but would need suitable experience and training.
CIPD would support extending the powers available to tribunals in respect of multiple-claimant claims. This issue is of vital importance to handling equal pay claims in particular. The ability for tribunals to apply the findings of “test” cases to other related cases could significantly reduce tribunals’ workload. In Scotland the tribunals have taken a robust approach to identifying test cases and their approach could have lessons for other tribunals.
Employment tribunals already have powers to award costs against claimants that put forward weak or vexatious claims: if there is a problem, it is that tribunals make so little use of them. CIPD would wish tribunal chairs to be more ready to identify suitable cases in which these powers ought to be used and we would support the wider use of practice directions in order to achieve greater consistency. Tribunals could also be more willing to dismiss vexatious cases and take the risk of subsequent appeals.
It is unclear what purpose is intended to be served by making more use of tribunal chairs sitting alone. Some existing tribunals make good use of chairs sitting on their own for case management purposes. Parties might also agree to allow the tribunal to operate with a chair sitting alone in a manner similar to a small claims court. This could allow the parties to present their stories within a stipulated time and the chair to make a judgment on the balance of probabilities.
The practice of chairs sitting alone is however sometimes seen as an attempt to save money at the expense of the quality of justice. Claimants may be offered a tribunal hearing with a chair sitting alone, but are not told that they are entitled to have their case heard by a full tribunal. Reducing the occasions on which side members are required would presumably mean a heavier workload on the ET chair.
CIPD believes that side-members are an integral part of the tribunal process when dealing with issues of substantive rights. Abolition of the dispute resolution regulations will put further emphasis on the need for tribunals to use their discretion in deciding what is fair and reasonable. This will put a premium on the workplace knowledge and judgement of side members. If existing side members are unable to contribute fully to the tribunal process in some cases, this may have implications for the selection and training of side members.
CIPD agrees that the Government should promote employers’ compliance with discrimination law through better advice and guidance rather than through widening the powers of employment tribunals to make recommendations in discrimination cases.