On 1 October 2004 at 8.59am the world stopped turning for HR professionals and employers. At 9.01 am there was a collective sigh of breath as they realised that little had changed with the introduction of statutory dismissal, disciplinary (DDPs) and grievance procedures (GPs). Bevans solicitors looks at the impact the new procedures have had on dealing with disciplinary and grievance matters in practice.
It is still too soon to say whether one of the primary aims of the legislation has been achieved: to reduce the number of Employment Tribunal (ET) claims. The figures will be available later this year and it will be interesting to see what the statistics reveal (“anything you want them to” is the answer of the cynics out there).
On the basis of purely anecdotal evidence witnessed by the solicitors here at Bevans, the number of claims going to the Employment Tribunal has not dramatically changed; initial evidence seems to show quite the opposite: that in many cases, the formality of the new procedures is actually encouraging claims as wily ex-employees can claim for an automatically unfair dismissal for procedural errors whereas previously they would have had to have shown that a procedural error affected the outcome of their dismissal.
There are a number of areas that seem to create traps for the unwary.
Redundancies and Retirements
The DDP applies to staff made redundant and retiring. Employers often overlook this and the three-step procedure is not followed. This means that the dismissal is automatically unfair and also means that compensation awarded by an ET must be increased by 10-50%. A particular issue here is where the company is proposing a compromise agreement to the redundant employee, a canny solicitor for the employee will argue that the amount offered by the employer should be increased by 50% immediately for a failure to follow the DDP.
Senior Executive Terminations
There are similar issues to consider here as in relation to redundancies and retirements. Rarely will a company follow the three step DDP before dismissing, say, the Finance Director. Usually the senior executive is told that their employment is being terminated and it is then a case of negotiating the severance terms. Increasingly senior executives are arguing for an increase of 50% to the amount offered. One way to avoid this is to make it clear that the figure offered includes an element for any increase for failing to follow the DDP.
Legal Representatives at DDP/GP hearings
The DDP and GP rules provide that meetings must be conducted in such a way as to allow both the employer and the employee to explain their cases. This has allowed employees to argue that because of the complexity of the issues or the serious consequences that might flow from the meeting they should be accompanied by their solicitor. We have seen this argument work for employees although each case will depend on its own circumstances.
The need for care when responding to GPs
As ET claims cannot ordinarily be commenced without a grievance having first been raised there has been a definite increase in the number of grievances being lodged and so increasing the work for HR managers.
In many cases employees are raising grievances just to keep open the possibility of a claim even though there is no real intention to do so. However, in other cases employees are using the GP to make the employer crystallise its position at an early stage. Under the standard three-step GP the employer must communicate its decision to the employee (this is usually done in writing) and under the modified two-step procedure the communication must be in writing.
Employers must act very carefully when responding to grievances, particularly in cases involving discrimination allegations. These written responses will almost certainly be put before an ET and the employee and their legal advisers will jump on any inconsistency.
In practical terms, when preparing written responses, the employer should have at the back of their mind the fact that they could be before an ET and should tread carefully. If in doubt legal advice should be taken.
Judicial guidance on the new rules and on grey areas will be vital in helping HR managers and employment lawyers to understand the extent of the rules and their precise applicability. In due course, cases will go to the Employment Appeal Tribunal and Court of Appeal and guidance will be given.
In the meantime, progressive employers are using the new procedures as a framework for resolving disputes at an early stage. A significant criticism of the DDP and GP is that they are adversarial by nature and this can increase hostilities between employee and employer failing to assist therefore in resolving the dispute.
These progressive organisations (such as the Department for Constitutional Affairs) are implementing mediation policies that allow for a non adversarial process – mediation – to be utilised in appropriate cases.
There is a definite increase in the number of organisations training managers and selected staff in mediation skills and referring complex cases to an external mediator at an early stage, well before ET proceedings are issued. Far be it for us to look into our crystal ball to predict the future, but could it be that the new procedures will inadvertently have their intended effect by encouraging mediation, if not by resolving disputes through the use of the statutory procedures themselves.