Good News: There is more Employment Legislation

Fergal Dowling - The Jeweller Column

11/11/2008

It is not unknown for some employers to look heavenwards when they are told that there is new legislation heading their way. This time, however, they may breathe a sigh of relief as the new rules will be about simplification of existing regulation.

The Dispute Resolution Regulations were introduced in 2004 with a view to promoting the resolution of employment disputes within the workplace surrounding grievances and disciplinary and dismissal issues, via a three stage process:

1. Give a written statement of allegations to employee and invite to a meeting - employee must be given reasonable notice, advised of right to be accompanied by a union representative and provided with copies of all documents relating to meeting
2. Meeting - discuss allegations, allow employee to respond, employee to be informed of decision and right of appeal
3. Appeal – employee appeals, employee must make all reasonable efforts to attend the appeal (preferably held before more senior management), and employee must be informed of decision

This was considered preferable to allowing the dispute to play out in the environment of an employment tribunal. A report on the number of claims received for 2007/08, however, indicates that the level of employment tribunals is 42% above the anticipated levels.

So how did this situation come about, particularly given that it has been generally recognised that the intentions behind the Regulations were entirely laudable?

Standard disciplinary procedure applied in all but the most serious circumstances when an employer 'contemplated' dismissing an employee.

Both employers and employees needed to consider the legal requirements under the regulations. As an example, an employee may have been unable to pursue an Employment Tribunal claim or face a penalty reduction in any compensation award if Tribunal proceedings were commenced without submitting a grievance. Again, this process called for three steps:

1. Statement of grievance, in writing from employer to employee
2. Meeting between employer & employee to discuss grievance; right to be accompanied by a representative, a response to be made to the employee after the meeting
3. Appeal – employee appeals, heard by more senior management and employee advised of final decision

Should the employee have already left employment he or she may use the modified procedure:

1. Statement of grievance by employee in writing to employer
2. Written response from employer

Failure to follow procedures would have a serious impact on the outcome of unfair dismissal claims, resulting in an automatic unfair dismissal finding and increased compensation payable by the employer.

Employers had a legal requirement to inform each and every employee about disciplinary rules and procedures in writing. Failure to do so could result in the employee being awarded up to four weeks' pay if successful in bringing a claim against the employer at an Employment Tribunal. The disciplinary rules had to make clear the levels of conduct and performance expected of employees and identify patterns of behaviour which would be regarded as gross misconduct, likely to result in instant dismissal. Should an employee’s conduct have been deemed not sufficient to warrant dismissal there were other penalties open to employers, contracts of employment permitting. These included demotion, suspension without pay and transferral to another role.

In the view of many, the Dispute Resolution Regulations were overly complicated and indeed, in the view of some, inflexible, with tough sanctions if it was deemed that either an employer or employee had not followed the procedures. Among such sanctions were:

• Automatic unfair dismissal if an employee was dismissed by an employer who had not followed the process
• An increase in compensation of up to 50%
• Employees barred from employment tribunal claim if they had not begun the process by lodging a grievance first

One of the elements which seemed to lead employers and employees to be at loggerheads was the insistence that every detail was put in writing. This was overly onerous in some work environments and led to parties digging in their heels when the expectation had been that informal meetings and conversations would arrive at an acceptable agreement.

Some employers and employees began to turn to mediation in a bid to resolve disputes without having to negotiate the cumbersome Dispute Resolution Regulations. This is something which many will hope to continue, even when the Employment Simplification Bill, part of the Employment Act 2008, comes into force, probably in April 2009. This will repeal the Employment Act 2002 (Dispute Resolution) Regulations 2004 and, in so doing, repeal the three step process for disciplinary and dismissal procedures raised by employers and grievances raised by employees.

Key benefits of the Employment Simplification Bill will include administrative savings for business (estimated to equate to £180m per annum) additional time and associated cost savings for employee representative bodies, individuals and businesses, and a more straightforward and transparent enforcement and penalties' regime, particularly in relation to the National Minimum Wage.

Employers and employees may well believe that the greatest benefit will be the increased flexibility to handle discipline and grievance issues within their own workplaces. They should remember, of course, that prior to the Employment Simplification Bill coming into force, the existing Dispute Resolution Regulations will apply.