By Mike Emmott, CIPD Employee Relations Adviser, @emmott_m
Recent changes in legislation affecting workplace dispute resolution have begun to bite. The volume of claims to employment tribunals has fallen off the proverbial cliff - a 70 percent reduction in single claims over 12 months. But that is not all that’s happening. It looks increasingly possible that the recent statutory changes are moving the system of workplace dispute resolution in the UK to a different place, and undermining some of our most basic assumptions about how it works.
Two fundamental questions need to be addressed:
1. are the new arrangements producing a situation that might be termed “Beecroft-lite”, where employees are unable to enforce their employment rights? Some of the more drastic proposals floated in the report by venture capitalist Adrian Beecroft in 2012, such as “no-fault dismissal”, were rejected by the Government, but the impact of the recent changes must nevertheless have delighted his supporters;
The main impact of the statutory changes to date has been the collapse in the numbers of tribunal claims. The major factor underpinning this has clearly been the introduction of tribunal fees, plus a remission system that is proving difficult for many claimants to negotiate: for example, people with more than £3000 in savings will in the majority of cases get no remission.
How realistic is it to expect that the current fees regime will continue to apply? In the High Court last year, UNISON challenged the Government’s decision to introduce tribunal fees, arguing that the introduction of fees would deny access to justice for workers. The union’s claim was turned down in February this year for lack of evidence. However the union has now been granted permission to appeal and, given the current claims figures, it would be hard to assert that evidence in support of the union’s case is still lacking.
If the union is successful this time, the Government is likely to have two main options: to reduce fees, or improve the remission system. A significant fees reduction is probably the more likely, though it’s hard to be certain what impact this would have. Would claims volumes revert to the kind of levels we saw before fees were introduced? That seems improbable, but the impact would depend in part on what happened to the structure of fees. For example, small claims such as those for holiday pay might not revert to previous levels since there might still be little prospect of seeing a return on the cost of the fees. On the other hand, claims for discrimination or unfair dismissal, which currently require a higher fee but offer scope for bigger returns, might still present claimants with difficult choices.
The future of tribunal fees will also be influenced by the outcome of the general election next May. Shadow Business Secretary Chuka Umunna has said that a Labour government would scrap the employment tribunal system, which is “unfair, unsustainable and has resulted in prohibitive costs”. It must be doubtful whether a Labour government would wish to abolish fees entirely, but the likely direction of travel seems clear enough.
The other big recent change is the advent of early conciliation by Acas, where the results so far appear to be almost entirely positive. There is some indication that early conciliation is opening up more opportunities for Acas to support employers in developing better employee relations, not just responding to claims.
Some 75% of parties are currently legally represented in the tribunal process. This can create a belief by employers that formal proceedings and/or financial compensation are the only way out. But, whether by accident or design, early conciliation may be beginning to change this situation.
When the applicant submits his application, Acas phones the employer direct. This is generally before the employer has had time to consider whether or not he wants to have legal representation. So the conversation between Acas and the employer can focus more on how to resolve the issue that has led to the claim, not just the level of compensation. Acas has also compiled a list of major UK employers, including names and contact details, so that fewer opportunities for conciliation get lost in the management systems of large organisations.
Small firms can also find dealing with tribunal claims intimidating: their responses may be driven by fear of the unknown or a reluctance to admit to mistakes. Early conciliation means that Acas can seek to “normalise” the situation by dialogue with the employer before a formal claim has emerged. Early contact by Acas may also lead to retention of an employee who might otherwise have left. There is even anecdotal evidence that some employers are willing to talk to Acas about the possibility of re-engagement or reinstatement – something almost unheard of as the outcome of a tribunal claim in recent years.
The net effect of fees and early conciliation has been to make some employment lawyers distinctly nervous about the impact on their business. This worry may be premature but it does underline the impact of recent changes. Is there any evidence that employers are responding to these changes by adopting new conflict management strategies? CIPD will be exploring this and related issues in the next couple of months and will report in the New Year.
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