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Trouble brewing: The new Acas Code and mediation

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MediationThe new Acas Code will, from April 2009, probably mean that mediation is adopted more widely, so Duncan Bain examines the role HR plays in this and how it will be developed with the new code.


It has always been thought possible that mediation in the workplace might be used to resolve a personality clash between two or more employees, but despite some progress it has never taken off as a widespread solution. What might change this is the emphasis that the Acas Code puts on employers intervening at an early stage, when trouble is brewing.

“It would be unwise…to conclude that there will be no repercussions of the new code whatsoever in the field of personality clashes.”

It has been rare for all but the largest organisations to train dedicated mediators and even more rare for organisations to use external mediators. Even in those organisations where mediation takes place, it is often seen as a required step towards the inevitable; the dismissal of (or compromise agreement for) one or other of the warring parties, if not both.

Typically it is only put in place once one or both of them have raised grievances about the other. It is sometimes given as a recommendation by the investigation manager. Often one or both of the individuals are on sick leave at this point and have added a grievance against the investigation manager himself to their list of complaints.

Thinking about mediation is often on the following lines:

“Once a relationship is broken it is the devil’s own work to put it back together”; “Two people who won’t work with each other, won’t work with each other”; “Demands that the employees put their professionalism to the fore and bury their differences in the interests of the organisation are futile.”

Employers had some degree of legal backing for such views. In 2004 employment tribunals were told by the Court of Appeal that whilst a personality (of whatever description) was not in itself capable of amounting to a lawful reason for dismissal, it could manifest itself in such a way as to demonstrate a legitimate business reason for dismissal. The Court of Appeal warned, however, that an employer must show evidence to demonstrate the damaging effect of the behaviour before they could rely upon such a reason.

The case in question, Perkin v St George’s Healthcare NHS Trust [2005], concerned a NHS senior finance director whose management style was such that it was found to have caused a breakdown in the relationships that he had with the rest of the senior executive committee. His dismissal was found to be fair.

Not all relationship breakdown case-law concerns senior employees. In a case from the 70s – that is somewhat dated in a number of respects – a woman, Ms Treganowan, working in an office caused strife for her employer because of serious tension between her and her colleagues. The tribunal found her to blame. The scenario apparently arose ‘from a difference of opinion as to the merits of the permissive society. The prime cause of the trouble was not so much Ms Treganowan’s way of life as the fact that she persisted in introducing it into the office by continually talking about her [relationships], apparently completely insensitive to the atmosphere … She already had an illegitimate child and now she was boasting of her association with a boy almost half her age’ (Treganowan v Robert Knee & Co Ltd [1975]). The Court of Appeal confirmed that her dismissal was fair as it amounted to ‘some other substantial reason’.

The essential point of these cases is unlikely to alter despite the introduction of the revised Acas Code. A tribunal will, in appropriate cases, continue to find that an intractable relationship breakdown is a substantial reason justifying dismissing the party at fault (or even both of the parties).

“Skilled HR managers may be able to intervene successfully but they have an inherent disadvantage in any dispute solving situation.”

In terms of procedure, the new Acas Code does not specifically require employers or employees to engage in mediation (mindful no doubt that mediation must be genuinely voluntary to have any value). Therefore a failure to engage in mediation, even where it appears to be a sensible option, will not amount to a breach of the code (or incur the penalties associated with such a breach – a finding of unfair dismissal, unless the breach is justified, and an uplift of up to 25%).

In addition, the code only explicitly applies to disciplinary and poor performance dismissals and it might be argued that it cannot be applied to a dismissal for ‘some other substantial reason’.

It would be unwise, however, to conclude that there will be no repercussions of the new code whatsoever in the field of ‘personality clashes’. There are four key points in this respect:

  1. The code is a minimum standard and normal rules of unfair dismissal will continue to apply, where the minimum has been satisfied, and these standards are likely to be influenced over time by the expectations set out in the code. Larger organisations in particular will be expected to build on the code.

  2. The code is likely to influence a tribunal’s attitude towards ‘some other substantial reason’ dismissals even if it is established that it does not apply strictly. This is particularly likely to be the case where, as in personality clash cases, there will sometimes be a fine line between alleging misconduct and alleging a relationship breakdown.

  3. The code emphasises for the first time the importance of an employer taking early action about a problem. There would therefore seem to be scope for a tribunal to conclude that the first signs of a personality clash must be acted upon and failing to do anything when these signs emerge may form the basis of an unfair dismissal claim. For example, an employee who is dismissed in a situation akin to that which Ms Treganowan (leaving aside some of the period details) found herself in, may properly argue that there was a point when an intervention by the employer could have made a difference and averted the need to dismiss her.

  4. The code also emphasises the importance of informal warnings. A failure to use informality when appropriate might, in a personality clash situation, cause unnecessary escalation as camps form and the individuals position themselves in expectation of some formal grievance or disciplinary investigation.

Whilst the code will not specifically require employers to mediate, the code’s emphasis on early intervention and informality is wholly appropriate where individuals are not getting along with each other and is likely to set the standard for dismissals in this area.

When signs of such problems first arise the chance of mediation succeeding is likely to be at its highest. Skilled HR managers may be able to intervene successfully but they have an inherent disadvantage in any dispute solving situation; they represent the interests of the employer and for that reason they are feared and are not wholly trusted. A skilled neutral mediator can allow individuals to forget about their interests and focus on an outcome and this gives the best prospect of achieving something at an early stage that they, and their employer, can live with.


Duncan Bain is associate solicitor at Morgan Cole

One Response

  1. Invest time to save time
    This is a great time to encourage people and organisations to step back from time consuming, adversarial formal procedures.

    Mediate first. Investigate later.

    Investigations determine right from wrong on a past event.

    Mediation gets people working together to solve a problem for the future.

    I hear from so many HR managers that their time is taken up with dealing with interpersonal issues at a formal level.

    Change your culture – encourage people to step back from grievance and discipline. I’m not saying waive employee’s rights or employer’s duties. Try mediation first. Keep your other options open.

    Provide an opportunity for all to put a hold on formal procedures, get the permission of all involved and attempt mediation first. Its all the more harder post investigation or at re-instatement.

    Get in early, invest time to save time, mediation takes hours / days rather than weeks / months.

    Steve Hindmarsh

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