From 6 May 2014, most Claimants will be required to submit an Early Conciliation Form to ACAS before they can issue claims in the Employment Tribunal. If the parties are willing to conciliate, an ACAS officer will be appointed and will attempt to reach agreement.
You are not required to attempt conciliation, but there are benefits to doing so.
- You will have advance notice that the employee is considering bringing a claim against you and the reasons supporting it, and may be able to settle it cheaply should you wish to settle it. Even if that is not possible, you will get an early start on preparing your defence. Unless a Claimant is eligible for remission, he will have to pay a fee of up to £250 to issue a claim and a further fee of £950 for the final hearing. This is a significant amount and many Claimants may be more willing to settle and reach a sensible compromise rather than run the risk of losing at Tribunal.
- Engaging in early conciliation may put additional pressure on the employee if he has a policy of legal expenses insurance, or the support of a union. Most policies require the employee to have a reasonable prospect of success before they fund claims and are likely to require the Claimant to positively engage with Early Conciliation in the hope that some claims can be settled before significant costs are incurred. Whilst you may not know whether the Claimant has the benefit of a separate funding arrangement, if you set out a robust defence and/or offer a reasonable settlement which is turned down by the Claimant, he may find that his insurance cover is withdrawn.
- ACAS will not provide an opinion on the merits of the claim (or response) but will provide information about the law and how compensation is assessed etc. This may give Claimants a more realistic view of the potential value of their claim and the legal hurdles they will have to clear. It may also give you advance warning of the Claimant’s levels of expectation in terms of settlement.
- You will not be prejudiced before the Employment Tribunal if the process fails. The Employment Tribunal will not be told whether early conciliation has been attempted, was rejected, or failed.
- Engaging in early conciliation changes the limitation date. Essentially, the clock will stop running for up to 6 weeks to give the parties time to attempt to reach a settlement. The rules are quite complicated and are likely to cause difficulties for Claimants which you may be able to exploit.
If the Claimant does not submit their claim within the amended limitation date, you will be able to make an application to strike the claim out. Claimants who miss limitation deadlines will only be able to argue that it was not ‘reasonably practicable’ to issue on time for unfair dismissal claims, or seek to persuade the Tribunal that it is ‘just and equitable’ to extend time for discrimination claims. These arguments are difficult to run and a failure to understand the rules, certainly in the context of unfair dismissal where the test is narrower, is unlikely to be persuasive.
- If the process fails and the Claimant succeeds at the hearing, it is likely that you will be ordered to pay the issue and hearing fees of up to £1,200. Settling early will avoid these.
The only real advantage to rejecting an offer to conciliate is where you are already aware of the potential claim and wish to ‘wait and see’ if the Claimant has the funds to issue proceedings. This approach may be particularly effective for dealing with low value claims, where the fees can actually exceed the amount being argued over. You may therefore be able to avoid some claims altogether.
- Chris Tutton