As easy as 1-2-3?

Alan Scott and Lynn Taylor of the Employment Rights Branch of the Department for Employment and Learning detail new legislation setting out minimum standards in rights and responsibilities for employers and employees in dispute resolution.

On 3 April 2005, subject to Parliamentary approval, Northern Ireland will wake up to one of the most fundamental changes to employment law in recent years. From that date, every employer (no matter how large or small) will be obliged to have in place, at the very least, a set of statutory procedures for resolving employment disputes at work. Similar changes will be introduced in Great Britain on 1 October 2004.

Background

The number of applications to industrial tribunals has risen considerably over recent years, by over 55% between 1992 and the year 2002/03, whilst applications to Northern Ireland’s Fair Employment Tribunal went up by 98% in the same period.
The new statutory minimum procedures due to be introduced aim to help employers and employees avoid the stress, time and expense involved in a tribunal case by ensuring that they attempt to resolve problems that arise at work as close as possible to their original source – in the workplace itself.

Of course, many employers already know the value of having robust internal procedures for dealing with disciplinary and grievance matters. By contrast, however, the number of small businesses that have no procedures in place is worryingly high. These statutory minima are not expected to detract from the more sophisticated procedures operated by many employers, rather they are designed to be simple to implement for those employers who have no systems in place at present. The procedures will apply equally to employers and employees.

What will employers have to do?

Employers will be obliged to follow the procedures before taking disciplinary action against or dismissing an employee, or where an employee of theirs has raised a grievance. Failure to do so in full will usually impact on subsequent tribunal proceedings. For example, if an employee is awarded compensation as a result of the employer’s action, the tribunal will normally increase the amount of that compensation by between 10 and 50% as a result of the employer’s failure. Furthermore, if an employer dismisses an employee without first following the appropriate minimum procedure, a tribunal will almost always judge the dismissal to be automatically unfair.

What will employees have to do?

Employees will have to follow the procedures if the employer begins them in respect of disciplinary action or dismissal, or if the employee wants to raise a grievance. An industrial tribunal (or the Fair Employment Tribunal) will have the power to reduce any compensation awarded to an employee, or even refuse a tribunal application altogether, where the procedures have not been followed and it is the fault of the employee.

What are the procedures?

Whether for employers or employees, the minimum procedures themselves are straightforward. If you have a complaint, then you will need to:

1. put it in writing;

2. hold a meeting to discuss it;

3. hold an appeal meeting if agreement cannot be reached at the initial meeting.

Is the formal route obligatory?

The introduction of minimum disciplinary and grievance procedures does not detract from the importance and wisdom of employers and employees discussing their difficulties first on an informal basis. The informal route will still often be the most productive, and can prevent a minor problem from escalating into something more serious. Even at this stage, however, it will be worth keeping a note of what has been said and done, just in case the formal complaint stage is reached later. Where informal discussion is not enough to resolve the problem, the new dispute resolution legislation will come into play. Formal dispute resolution will generally have to be attempted before a tribunal claim can be brought.

What does each step involve?

Employee grievances

Where an employee raises a grievance, the three steps that must be taken in most circumstances are as follows.

1. Put it in writing
The employee must put his or her grievance in writing and send it to the employer. He or she must then allow 28 days for the employer to respond. The normal time limit for applying to a tribunal will be extended automatically by three months to allow the procedures to be attempted. If the employee submits a tribunal application without having notified his or her employer, or before the 28 days have passed, the application will be rejected. However, the normal time limit for lodging a claim with the tribunal will be extended by three months to allow time for the procedures to be attempted. (If time is extended in this way, however, the employee must put the grievance in writing to the employer within one month of the end of the normal time limit for applying to a tribunal.)

2. Hold a meeting
The employer should arrange a meeting to discuss the issue. The employee can take a companion to the meeting, and the employer will be expected to make reasonable adjustments if either the employee or the companion has a disability. If the employee does not attend the meeting, but lodges a tribunal application at this stage, the case may be heard by a tribunal, but any compensation awarded to the employee could be reduced by as much as 50% to take account of the fact that all the statutory procedures have not been attempted. If, on the other hand, the employer is at fault (for example, does not arrange a meeting), any compensation awarded to the employee will be likewise increased.

3. Hold an appeal meeting
If the issue is not resolved satisfactorily at the first meeting, then the employee has the right to appeal and may inform the employer that he or she wishes to exercise that right. In this circumstance, a second meeting should be set up by the employer, at which the same arrangements with regard to an employee’s companion and reasonable adjustments for those with a disability apply. Where possible, a more senior manager should hear the appeal than the manager who presided over the first meeting. Once again, a failure to go through with an appeal meeting could affect any subsequent tribunal award of compensation.

Disciplinary & dismissal procedures

Where the employer begins the statutory procedures (because he or she is contemplating disciplinary action or dismissal), the three steps that must be followed are very similar. The employer should send the employee a written statement setting out the reasons why the employer is contemplating action; an initial meeting should be held to discuss the issue; and, if the employee is dissatisfied with the outcome, an appeal meeting may then be held to consider the problem further.

Are there exceptions to the rules?

If, for some reason that was unforeseeable when the initial meeting or the appeal was arranged, either the employee or the employer is unable to attend, there will be an obligation for the employer to rearrange the meeting. However, if an unforeseeable reason prevents the second meeting from taking place, there will be no further obligation to rearrange and the procedures will be taken as complete.

Inevitably, there are limited circumstances in which the three-step procedure will not apply at all. In some cases, a modified two-step procedure will be required instead. In other circumstances, for instance where there is a significant threat of violence or harassment or where a grievance has been raised collectively, the procedures will not have to be gone through. A more detailed description of the exceptions to the normal requirements can be found in the Department for Employment and Learning’s range of online publications, described at the end of the article.

Further guidance

The following guidance material is available from www.delni.gov.uk/resolvingdisputes:

• Guidance for HR Specialists and Legal Professionals
• Guidance for Small Firms
• Guidance for Employees

The Department for Employment and Learning is also preparing a publicity campaign to ensure that everyone is informed well in advance of the new law coming into operation. As already stated, the Regulations set a minimum standard only. They are not intended to replace existing best practice, which will be set out in the LRA's revised Code of Practice on Disciplinary and Grievance Procedures. Visit the LRA website (www.lra.org.uk) to view this draft Code. The LRA will also be able to provide helpline advice on the new rights for employers and employees on 028 9032 1442 (Head Office) or 028 7126 9639 (Regional Office).