As previously reported by HR Zone, the government is consulting on proposals to dump the statutory dispute resolution procedure. The question is: what should replace it?

Early indications from the consultation are that no one has much idea, so the government has now opened a second consultation specifically to address the replacement issue.

There are three options:

• A return to the previous regime – established by the House of Lords case of Polkey v AE Dayton Services. This provides that procedural failings will render a dismissal unfair except in certain exceptional circumstances. But the law lords also said that compensation could be reduced or even eliminated to reflect the likelihood that the claimant would have been dismissed anyway, even if the correct procedures had been followed.
  
• Introducing new legislation which would allow tribunals to distinguish between dismissals which are unfair on procedural grounds and those which are unfair on factual grounds. This could lead to a dismissal which is fair on the facts but unfair on procedural grounds. Penalties in these cases would be on a sliding scale with a low cap.




• Revert to the pre-Polkey position. Known as the ‘no difference’ rule, this means that if there was a procedural irregularity in an otherwise fair dismissal that would have made no difference to the outcome, then the dismissal was fair.

The government favours the second option as it would enable tribunals to reach decisions which clearly distinguish between procedural and factual unfairness.

It also hopes that the low levels of compensation that would apply to procedural points would discourage people from pursuing cases on those points alone.

The consultation closes on June 20.