Discrimination complaints - the new regime: Part 1
The
Employment Act 2002 (Dispute Resolution) Regulations 2004*, which will have a
major impact on discrimination complaints, came into force on
The combined effect of all these changes is to create a new regime for discrimination complaints. In this article, we look at how the new statutory grievance procedure will affect potential claims of unlawful discrimination. Next month, we will focus on the new tribunal rules, including the changes to the equal pay procedure.
The new regime in brief
The Dispute Resolution Regulations implement the statutory grievance procedures and statutory dismissal and disciplinary procedures provided for by the Employment Act 2002. The government's overall aim is that more disputes are resolved in the workplace and fewer are taken to employment tribunals.
As regards discrimination complaints, the statutory grievance procedures will have the greatest impact. The overriding principle is that if an employee does not begin the grievance procedure, they will not be able to make a tribunal claim of unlawful discrimination. The normal rule under the new regime is that before submitting a tribunal complaint of unlawful discrimination, the employee must write a Step 1 grievance letter setting out their grievance and then allow 28 days. This is in accordance with s.32(2) of the Employment Act, which provides that an employee "shall not present a complaint to an employment tribunal" if it 'concerns' a grievance in respect of which the statutory grievance procedure applies and the employee has not completed the first step in the procedure. If the employee fails to comply, their complaint will be inadmissible.
If the employee has written a Step 1 letter, but the remainder of the statutory grievance procedure has not been completed, then any subsequent award of compensation must be, according to which party has failed to comply, increased or decreased by 10%, and can be increased or decreased by up to 50% if the tribunal considers it just and equitable in all the circumstances. This award adjustment is in accordance with s.31 of the Employment Act. Whether the procedure has been "completed" for this purpose means whether the requirements have been complied with by both the employee and the employer.
All discrimination jurisdictions covered
The new regime applies to claims made by an employee under all the mainstream discrimination jurisdictions: the Equal Pay Act; Sex Discrimination Act; Race Relations Act; Disability Discrimination Act; Employment Equality (Religion or Belief) Regulations; and Employment Equality (Sexual Orientation) Regulations. However, for some reason, it does not apply to claims under either the Part-time Workers Regulations or the Fixed-term Employees Regulations.
Effect on existing procedures
Many employers have procedures that are much more detailed than the statutory grievance procedure. Some provide for an informal first stage, where the employee raises a complaint with their immediate supervisor but does not put it in writing. Some allow for several stages of appeal. Others have special procedures for dealing with allegations of harassment or bullying. There is no reason why these procedures cannot continue to be operated, provided that they meet with all of the requirements of the statutory procedures as set out below.
Transitional provisions
Regulation 18 provides that the new Regulations apply "in relation to grievances, where the action about which the employee complains occurs or continues after these Regulations come into force, but shall not apply in relation to a grievance where the action continues after these Regulations come into force if the employee has raised a grievance about the action with the employer before they come into force".
This means that the new procedures do not apply where the complaint relates to an act that is not continuing on 1 October, or where the act is continuing, where the employee has complained about it before 1 October. Otherwise, an employee will be expected to use the new grievance procedures before making a tribunal complaint of unlawful discrimination.
What is a grievance?
The Regulations define a grievance as "a complaint by an employee about action which his employer has taken or is contemplating taking in relation to him". Regulation 6(1) then provides that: "The grievance procedures apply . . . in relation to any grievance about action by the employer that could form the basis of a complaint by an employee to an employment tribunal . . . or could do so if the action took place." "Action" is defined by reg. 2(1) as meaning "any act or omission".
Thus, the new regime applies only to existing employees. It does not cover complaints about discrimination in recruitment. We pointed out in Dispute Resolution Regulations that the use of the phrase "action . . . taken . . . in relation to him" by the employer may not always be apt to describe an employee's complaint concerning the more favourable treatment of a work colleague. For example, if a group of women wish to complain that a man has been appointed on equal work but at a higher salary to them, can that be regarded as action - or an omission - taken in relation to them triggering the obligation to use the grievance procedure? There is no mention of this in the guidance.
There are also issues as to whether the statutory grievance procedure applies to discrimination by third parties, such as work colleagues, for which an employer may be legally liable. The Department of Trade and Industry (DTI) has consistently taken the view that this comes within the scope of the Regulations. The guidance says so in the following terms: "This definition will also cover the actions of a third party (eg a colleague) in cases where the employer could be vicariously liable for those actions." This must be open to question. Take a case of sexual harassment by a work colleague. This is not "action" by the employer (unless done by a supervisor or manager). It is action for which the employer is legally responsible, only because the discrimination statutes expressly say so. In the case of harassment, the suggestion that the employee must use the statutory grievance procedure may lead to further confusion. The employee's "grievance" in such a case is not usually that they have been harassed as such, but that they want steps to be taken to ensure that the offensive behaviour does not recur. If the employer responds by suggesting steps that the employee then considers inadequate, is that a separate grievance, to which a new procedure applies?
The grievance procedure does not apply to direct dismissals, as these are covered by the statutory dismissal and disciplinary procedures. The Regulations stipulate that the grievance procedures do not apply "where the grievance is that the employer has dismissed or is contemplating dismissing the employee". However, the statutory grievance procedure does apply to cases of constructive dismissal.
Where the grievance procedure applies
There are three steps in the standard grievance procedure: the grievance, the meeting, and the appeal.
Where the grievance procedure applies, the employee must raise the grievance in writing and wait 28 days before presenting a tribunal complaint relating to the matter.
Schedule 2 to the Employment Act sets out general requirements relating to statutory procedures. It provides that "each step and action under the procedure must be taken without unreasonable delay".
Step 1: setting out the grievance
The Act specifies that, as a first step, "the employee must set out the grievance in writing and send the statement or a copy of it to the employer". The guidance suggests that this involves the employee explaining "the nature of the alleged grievance".
How much information must an employee provide? Strictly speaking, the obligation on the employee to inform the employer of the "basis for the grievance" is part of Step 2, but most employees will wish to deal with this in one and the same letter. In this context, note that Rule 1(4)(h) of the new Employment Tribunals Rules of Procedure provides that a claim must include "whether or not the claimant has raised the subject matter of the claim with the respondent in writing at least 28 days prior to presenting the claim to an employment tribunal office". The phrase "subject matter" suggests that a factual statement detailing the employee's complaint will suffice for both steps, rather than an explanation of why they think they have good grounds for bringing a grievance.
Regulation 14 of the Dispute Regulations stipulates that sending the employer a statutory discrimination questionnaire does not constitute a "statement of grievance" so as to satisfy the requirement of being a Step 1 grievance letter.
Once the Step 1 letter has been sent, the employee must wait 28 days before bringing a tribunal complaint. This applies even where the employer responds to the letter immediately. Presumably, the intention is that at least some of the remaining steps in the procedure should take place before the tribunal claim is filed.
Step 2: the meeting
The second step in the standard grievance procedure consists of a meeting between the employer and the employee. The employer is obliged to invite the employee to attend a meeting to discuss the grievance.
The Act specifies that the timing and location of meetings must be "reasonable". The guidance suggests that there must be "at least one hearing" and that it must be at "a reasonable time and place".
The right to be accompanied by a trade union official or a fellow worker, as provided for by the Employment Relations Act (as amended), will apply to meetings that deal with grievances affecting statutory or contractual rights.
The new Acas Code of Practice says that: "It is good practice to agree a time and place for the meeting with the employee . . . If an employee's companion cannot attend on a proposed date, the employee can suggest another date so long as it is reasonable and is not more than five working days after the date originally proposed by the employer. This five-day time limit may be extended by mutual agreement."
The employee must take all reasonable steps to attend the meeting.Regulation 13 provides that "if it is not reasonably practicable" for an employee (or companion) or the employer to attend a Step 2 meeting that has been organised in accordance with the statutory procedure "for a reason which was not foreseeable when the meeting was arranged", then the party concerned shall not be treated as having failed to comply with that requirement. As an example, the DTI guidance suggests that "one of the parties may be ill, or his/her car may break down on the way to the meeting." In such a case, the employer is under a duty to invite the employee to a meeting at an alternative time. However, if one of the parties does not attend a meeting that was arranged and the failure could be reasonably foreseen, then the DTI guidance points out that "neither party will be under any further obligation under the statutory procedures. The tribunal may choose to attribute responsibility for failure, with the commensurate impact on award adjustment." Neither the Regulations nor the guidance elaborate upon what is meant by a meeting having been "arranged" for this purpose. However, the more natural reading of the words in their context is that a meeting is only "arranged" when the employee agrees to attend on a date on which they have been invited by the employer. Otherwise, an employee who had a good reason for not agreeing to the initial date proposed would not have an excuse.
If the employer has invited the employee to attend two meetings, and it remains not reasonably practicable for one of the parties to attend, then the parties are deemed to have complied with the statutory procedure.
The Act requires that meetings must be conducted "in a manner which enables both employer and employee to explain their cases". The Acas Code elaborates on this: "The employee should be allowed to explain their complaint and say how they think it should be settled. If the employer reaches a point in the meeting where they are not sure how to deal with the grievance or feel that further investigation is necessary, the meeting should be adjourned to get advice or make further investigation."
After the meeting, the employer must inform the employee about any decision and notify them of the right to appeal against the decision they are not satisfied with it. The Code of Practice says that "five working days is normally long enough" for the employer to respond. "If it is not possible to respond within five working days the employee should be given an explanation for the delay and told when a response can be expected."
Step 3: the appeal
Step 3 consists of the appeal process. An employee who considers that the grievance has not been satisfactorily resolved must inform the employer (not necessarily in writing) that they wish to appeal against the employer's decision. The employer then must invite the employee to attend an appeal hearing.
An employee is not legally obliged to appeal. However, the Code of Practice warns that "the appeal stage is part of the statutory procedure and if the employee pursues an employment tribunal claim the tribunal may reduce any award of compensation if the employee did not exercise the right of appeal." The Code adds that "as far as is reasonably practicable, the appeal should be with a more senior manager than the one who dealt with the original grievance."
After the appeal meeting, the employer must inform the employee of the final decision (although not necessarily in writing).
Modified procedure where employment has terminated
The Regulations provide for a modified, two-step grievance procedure, which dispenses with Step 3, the appeal meeting. This applies only where the employment has ended, where the standard grievance procedure would otherwise apply, and, most importantly, where the parties agree in writing that the two-step procedure should apply to the grievance. Otherwise, the standard procedure applies even though the employment has ended.
In addition, the modified procedure can only apply if either the employer was not aware of the grievance before the employment ended; or, if the employer was so aware, the standard grievance procedure had not started or not been completed by the time the employment ended.
The first step in the modified procedure is for the employee to set out in writing the grievance and the basis for it, and send the statement to the employer. Step 2 is for the employer to set out its response in writing and send it to the employee.
Where the statutory grievance procedures do not apply
The ordinary presumption is that an employee will be expected to follow the statutory grievance procedure before making a discrimination complaint. However, the Regulations specify certain circumstances in which neither the grievance procedures nor the dismissal and disciplinary procedures apply, and other circumstances in which the parties are to be treated as having complied with the grievance procedure. As discussed below, these are where it is not practicable, where there has been harassment or a significant threat.
The Regulations provide that where these circumstances, as defined, apply and as a consequence the employer or employee does not commence the grievance procedure, the procedure does not apply. Therefore, there will be no bar to any subsequent tribunal application, and the normal time limits for bringing such a complaint will apply.
That said, if the applicant wrongly thinks that their case falls within one of the exceptional categories and fails to comply with Step 1 in the time allowed, their claim will be inadmissible. There appears to be no discretion on the tribunal to consider it, even where it regards it as just and equitable to do so.
Not practicable
Regulation 11(3)(c) stipulates that one of these circumstances in which the statutory procedures do not apply or are to be treated as having been complied with is where "it is not practicable for the party to commence the procedure or comply with the subsequent requirement within a reasonable period."
The importance of this provision is that it somewhat mitigates the otherwise draconian time limit rules discussed below. If it is "not practicable" for an employee to bring a grievance within four months of an alleged act of discrimination, they will not be shut out from bringing a tribunal complaint.
The DTI guidance says that "this provision will be used in circumstances where there are long-term barriers to either starting or completing the procedures. Those issues might include illness, incapacity, cessation of the employer's business and so on . . . If it was not practical to either start or complete the procedures within a reasonable period, then neither party will be held at fault for the procedure's failure, and so award adjustment will not apply." There is no further guidance on what a "reasonable period" might be for this purpose.
Note, in this context, that the new rules allow the tribunal much less discretion than the ordinary standard under the discrimination statutes of whether it is "just and equitable" to consider a complaint that has been presented out of time. "Not practicable" can be equated to "not possible". "Not practicable" was the statutory language first used for the strict time limit test for unfair dismissal in 1971, but it was changed to "not reasonably practicable" in 1975 to mitigate the harshness of a strict rule of "practicability".
Harassment
There is also an exception where either party has been subjected to "harassment" and has reasonable grounds to believe that commencing the procedure or complying with the remainder of it "would result in his being subjected to further harassment". "Harassment" is given a similar statutory definition as in the race, disability, religion and sexual orientation Regulations:
"conduct which has the purpose or effect of -
(a) violating the person's dignity, or
(b) creating an intimidating, hostile, degrading, humiliating or offensive environment for him, but conduct shall be regarded as having that purpose or effect if, having regard to all the circumstances, including in particular the perception of the person who was the subject of the conduct, it should reasonably be considered as having that purpose or effect."
There are several points to highlight here. The definition of "harassment" in the Dispute Resolution Regulations is not restricted to harassment on a ground that is otherwise unlawfully discriminatory, such as race, sex, etc. It is apt to also cover bullying and other forms of intimidation. The DTI guidance points out that "such circumstances make the constructive discussion of workplace disputes impossible", but then goes on to emphasise that "it is important to note that stress or anxiety . . . will not usually be sufficient to cause any exemption to apply."
The circumstances in which an employee subjected to harassment or bullying will be able to circumvent the requirement to use the statutory procedure are drawn very narrowly.
The government's original proposals, when the Employment Act was going through parliament, suggested that there would be an exclusion from having to go through the statutory procedure - including attending a meeting - for those who had experienced harassment. This has now been restricted, in that the employee concerned will only be excused from bypassing the statutory procedure if they can establish that they had reasonable grounds for believing that they would be subjected to "further harassment" if they went through the procedure. Except in the most extreme case, such as in a small company where the harassment was perpetrated by the person who would be holding the grievance hearing, it will be extremely risky for a discrimination complainant to try to establish this in retrospect. In the ordinary case of harassment by a work colleague, the employee will not have an excuse for not going through the grievance procedure because this, in itself, is unlikely to lead to further harassment.
The burden is made potentially even more difficult by a subtle - and unexplained - change to the definition of harassment compared with that found in the discrimination laws. Whereas they render automatically unlawful harassment that has a discriminatory "purpose" and pose an objective test of reasonable perception only where what is at issue is whether conduct has the "effect" of violating an employee's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment, the Dispute Resolution Regulations apply this test to whether conduct has this effect or purpose.
In any subsequent tribunal case, if the tribunal finds that one party is responsible for the procedures not being started or completed because of harassment, the party at fault would be liable to an adverse adjustment of any award made by the tribunal.
Significant threats
The third category of exception is where either party has reasonable grounds for believing that commencing the procedure or complying with it would result in "a significant threat to himself, his property, any other person or the property of any other person".
The DTI guidance explains that this definition is "intended to cover both violence and threats of violence to either the party or the party's property, or any other person or any other person's property".
As with harassment, in any subsequent tribunal case, if the tribunal finds that one party is responsible for the procedures not being started or completed because of a significant threat, the party at fault would be liable to an adverse adjustment of any award made by the tribunal.
Dismissal
The exceptions in reg. 11 discussed above apply to both dismissal procedures and grievance procedures. Regulation 6 sets out other circumstances in which the grievance procedures do not apply. The most important of these is that the grievance procedure does not apply to a grievance that the employer "has dismissed or is contemplating dismissing the employee". In such a case, the statutory dismissal and disciplinary procedures will apply. However, this exception does not apply where the employee is considering resigning (or has resigned) and brings a claim of constructive dismissal. In such a case, the employee will be expected to follow the statutory grievance procedure.
Former employees
In the case of a former employee, to whom the modified procedure would normally apply in any event, reg. 6(4) provides that neither of the grievance procedures will apply where the employee has ceased to be employed by the employer, neither procedure has been commenced, and since the employee has ceased to be employed, "it has ceased to be reasonably practicable for him to comply with" the requirement to set out the grievance in writing in accordance with Step 1.
Collective grievances
The statutory procedure does not need to be followed if a grievance is raised on behalf of at least two employees by an appropriate representative, such as an official of an independent trade union recognised by the employer for the purposes of collective bargaining in respect of a description of employees, including the employee having the grievance.
Regulation 9 provides that the representative must write to the employer setting out the grievance and specify the names of the employees on behalf of whom the grievance is being raised.
Regulation 10 provides that the statutory grievance procedure will be deemed to have been complied with if the employee raises the grievance under a collectively agreed procedure covering two or more employers. As the DTI guidance notes, "in many industries, employers and trade unions have developed sophisticated dispute resolution procedures. These schemes may allow the employee to raise a grievance with this joint body."
Breach of admissibility rules
Section 32 of the Employment Act sets out three circumstances in which an employee is precluded from bringing a tribunal complaint about a discrimination grievance because they have failed to comply with the statutory grievance procedure:
if they have not complied with the requirement to send a Step 1 statement of grievance;
if they have sent the statement of grievance but less than 28 days have passed since they sent the statement; or
if the requirement was complied with more than one month after the end of the original time limit for bringing the complaint (which will usually be three months in a discrimination complaint).
As noted above, the 28-day rule applies regardless of whether the employer has responded earlier. An employee who makes a premature application will, however, be entitled to resubmit their application within the extended time limits discussed below.
Time limits
The normal three-month time limit for presenting an employment tribunal claim of discrimination is extended by the Regulations by three months in certain circumstances. These are where the employee has presented a tribunal complaint within the normal time limit, but the complaint is inadmissible because the employee has failed to comply with the requirement to write a Step 1 letter; or where the complaint is premature because 28 days have not elapsed since the day on which the requirement was complied with.
In addition, the DTI guidance says that "the existing discretion of the tribunal to extend a time limit where . . . it is just and equitable to extend it . . . is unaffected by these changes."
As we saw above, however, in order to make a valid claim, the employee must initiate the statutory grievance procedure by complying with Step 1 within one month of the expiry of the original time limit. Subject to the exception provisions set out earlier in this article, such as where it is not practicable to commence the procedure, if the applicant has not sent the Step 1 letter within four months of the alleged act of discrimination, the complaint will be inadmissible and there will be no discretion in the tribunal to extend time.
Adjustment of award
If the statutory grievance procedure is not completed before employment tribunal proceedings are begun, and the non-completion is attributable wholly or mainly to the employee's failure, unless there are exceptional circumstances, the employment tribunal must reduce any award of compensation it makes to the employee by 10%. It may, if it considers it just and equitable to do so, reduce the award by a further amount up to a maximum of 50%.
Conversely, if a statutory grievance procedure is not completed before employment tribunal proceedings are begun, and the non-completion is mainly the employer's fault, unless there are exceptional circumstances, the employment tribunal must increase any award of compensation it makes to the employee by 10%. It may, if it considers it just and equitable to do so, increase the award by a further amount up to a maximum of 50%.
*SI 2004 No.752, see www.hmso.gov.uk/si/si2004/20040752.htm.
†Code of Practice 1, issued on
**Resolving disputes, available from www.dti.gov.uk/er/resolvingdisputes.htm.
