Early conciliation: can it succeed where the dispute resolution procedures failed?

Author: Darren Newman

Consultant editor Darren Newman asks if the new early conciliation process can avoid the unforeseen litigation over the detail that resulted from the statutory dispute resolution procedures, introduced with the intention of resolving disputes at an early stage, but abandoned a few years later.

Those of us who had to work with the statutory dispute resolution procedures that were in force between 2004 and 2008 are scarred by the experience. The procedures were introduced with the intention of encouraging the early resolution of employment disputes but actually led to more complexity and more litigation. In particular, the requirement for tribunals to reject any claim if the claimant had not first completed at least step one of the statutory grievance procedure led to a mass of case law on just what that involved. No one mourned their passing when the procedures were abolished by the Labour Government that had introduced them just four years earlier.

Move forward to 2014, and there is a new requirement, introduced by the Enterprise and Regulatory Reform Act 2013, for those seeking to bring an employment tribunal claim first to contact Acas so that an attempt at early conciliation can be made. This early conciliation service will be available from 6 April this year and compulsory from 6 May. However, having experienced the statutory dispute resolution procedures, it is difficult for me to look at these new plans to encourage the early resolution of disputes without asking if they might result in similar unintended consequences.

An examination of the Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations 2014 (SI 2014/254) indicates that the Government is trying to avoid some of the difficulties caused by the old dispute resolution procedures. There is no requirement on either party actually to engage with the conciliation process. Instead claimants are nudged in the direction of conciliation by a simple requirement to contact Acas with their name and address and the name and address of the prospective respondent. Acas will then spend four weeks (with a possible two-week extension if the parties agree) trying to promote a settlement. If no settlement is reached in that time - or if Acas decides that there is no prospect of a settlement being reached - Acas will issue an "early conciliation certificate". The claimant must present this certificate when bringing any subsequent claim in the employment tribunal.

So what could possibly go wrong with this system? First, disputes may arise about whether or not the issues raised in early conciliation are sufficiently similar to those raised in the tribunal claim itself. Under the new s.18A of the Employment Tribunals Act 1996, the claimant bringing proceedings must first have contacted Acas "about that matter". If an employee claims disability discrimination after being dismissed, is it enough if he or she contacted Acas and merely complained about the fairness of the dismissal? To some extent the Regulations provide reassurance that, yes, it is. The employee does not need to give any details of the claim itself and there is no indication that the certificate issued by Acas will limit the scope of subsequent claims. However, there is still room for argument on the issue. Suppose the initial discussions with Acas focus on notice pay, but the claim made is one of a failure to make reasonable adjustments in the run-up to dismissal. Can it really be said that the claimant has contacted Acas "about that matter"? Litigation on this point seems inevitable.

The other potential difficulty caused by the new requirement is the effect that it has on time limits. In broad terms, the time limit for bringing a claim is "paused" while Acas is attempting to conciliate. However, the details are rather more complicated and depend on the date on which the information is supplied to Acas and when the employee receives the early conciliation certificate from Acas. When dealing with tribunal time limits, precise dates are important; so it is to be hoped that the internal administration system that Acas has created is up to the task. Employers should also be aware that the new system allows potential claimants to extend their time limit considerably. Submitting information to Acas on the last day of the normal time limit essentially creates a two-month extension - four weeks of conciliation plus another month provided for in the legislation.

These technical concerns aside, the bigger question is whether or not the new scheme will work. I am sceptical about it leading to more disputes being settled before a tribunal claim is made. Where there is a clear dispute about unpaid notice pay or wages, a telephone conversation may be enough to reach a settlement. But if a claimant is alleging discrimination and unfair dismissal, for example, I struggle to see how a substantial settlement can be agreed without the claim at least being set out in writing. Except in the most clear-cut cases - which are likely to settle anyway - I would expect employers to wait and see what claim is actually made and how it is put before entering into serious negotiations about a settlement.

The Government is more optimistic than I am. The impact assessment prepared by the Department for Business, Innovation and Skills predicts a 17% fall in claims, saving business just over £64m a year. However, we will never know if this figure is correct because the impact of early conciliation is likely to be swamped by the effect of employment tribunal fees. We still have no reliable figures about how the fees introduced in the summer of 2013 have affected the number of claims being brought, but anecdotal evidence suggests that the impact is much greater than the Government expected.

It is of course possible that the new early conciliation process will reduce the number of claims simply by deterring potential claimants or catching out those who do not realise that they have to contact Acas before bringing a claim. For all the public debate about vexatious litigants, it is worth remembering that most claimants are unfamiliar with the tribunal system and daunted by the prospect of suing their employer. One more administrative hoop to jump through may be enough to prevent them from bringing a claim at all.