Review of the Dispute Resolution Provisions of the Employment Act 2002 and the Employment Act (Dispute Resolution) Regulations 2004
Comments from Thompsons Solicitors – February 2007
Thompsons is the UK’s most experienced firm of trade union, employment rights and personal injury lawyers. The firm has a network of offices, operating in England, Northern Ireland, Wales and Scotland. On employment and industrial relations issues it acts only for trade unions and their members. Thompsons represents the majority of UK trade unions and advises on the full range of employment rights issues through its specialist Employment Rights Unit.
1. MAJOR ISSUES
a. The Procedures
The Procedures mirror each other to a large extent. In particular, each Standard Procedure distinguishes between setting out the charge or grievance (Step 1) and informing the other party of “the basis” for it (Step 2). The additional information required at Stage 2 need not be in writing.
Problem: The understandably modest standard for Step 1 grievances has (equally understandably, given the wording of Schedule 2) set a low threshold for the amount of information an employer must give the employee at Step 1 of the Standard DDP. This despite the fact that there is no parity in industrial relations: an employer initiating disciplinary proceedings exercises power; an employee raising a grievance petitions the person holding power.
The 2002 Act departs from decades of workplace practice and expectations. Employees often now receive only the merest hint in writing of what they are supposed to have done wrong (e.g. “absence”, “conduct”) and the lack of a requirement for the employer to provide written information at Stage 2 means the employee can be ambushed at the Step 2 meeting.
Solution: Require the employer to specify not only the charge but also the basis for it at Step 1 of the DDP. In addition, the information required of employers at Step 2 should be in writing and employers should not be allowed to add additional charges without starting the DDP afresh.
b. The Modified Procedures
Each Procedure has both a Standard and a Modified form.
Problem: The Modified DDP is in truth rarely applicable but some employers mistakenly believe that they can use it for any alleged act of gross misconduct. Employees who use the GP run the risk of being (accidentally or intentionally) ambushed by employers who, upon receipt of a Standard GP Step 1 letter, offer the employee the option of the Modified GP, in circumstances in which the letter did not comply with Step 1 of the latter procedure (because it did not set out the basis of the grievance).
Solution: Abolish the Modified DDP.
There is a case for also abolishing the Modified GP. Alternatively,
- the consent of both parties should not be necessary for the Modified GP to apply;
- the employer should not be allowed to rely on the employee’s failure to set out the basis for the complaint in the Step 1 letter if that letter was written as a Standard GP letter, without first giving him / her notice and the opportunity to provide the required information.
c. Section 32
Section 32 locks employees out of an Employment Tribunal if they fail to follow the GP when they should have done.
Problem: This exclusion is a draconian penalty for employees, inappropriate and disproportionate for legislation intended to encourage workplace resolution of employment disputes. An employer’s failure to follow the DDP only brings a penalty of automatically unfair dismissal in dismissal cases and even then the impact is lessened by the possibility of reductions in compensation.
Solution: Repeal section 32. Either simply maintain the operation of section 31 (bolstered by a warning on the ET1) and / or introduce an express power to stay/sist Tribunal claims to allow the employee to raise and pursue a grievance.
The Dispute Resolution legislation does not apply to all forms of Tribunal complaints. Schedule 1 is a list of included and excluded jurisdictions.
Problem: It is not obvious why some complaints are included and some excluded. For unrepresented employees (and for that matter employers), it is too easy to come unstuck, not only in failing to follow a procedure but also in following a procedure in the incorrect belief that a time limit extension applies.
Solution: Simplify the lists (perhaps by applying the procedures to all claims except interim relief, for which see 2c below). It would also be just to allow an extension where an employee reasonably believed that he / she was following an appropriate procedure.
e. Relevant Disciplinary Action
The DDP does not apply to disciplinary action short of dismissal, suspension on full pay and / or oral or written warnings.
Problem: There is no logical basis for excluding warnings. It is notable that at no stage in the pre-Bill consultation documents or during the Parliamentary stages did the Government indicate this was their intention. The result has been to complicate the application of the DDP and its interface with the GP (see g below).
Solution: Extend the DDP to all forms of disciplinary action.
f. Time limits
The 3-month time limit where the GP applies is triggered when the employee complies with Step 1 and this works well. But the 3-month time limit where the DDP applies is only available if, at the time the normal time limit expires, the employee has reasonable grounds for believing that any dismissal or disciplinary procedure is ongoing – reg 15(2).
Problem: This encourages bad employers to string out appeal procedures in an attempt to catch the employee out – some wait until very late in the day to hold & decide appeals. The employee is uncertain whether that delay breaches the employer’s duty not to delay and is also uncertain whether and if so when to lodge an ET1.
Solution: The employee should get the time limit extension in DDP cases only if and when he / she appeals i.e. it is triggered by Step 3 in the Standard DDP and by Step 2 in the Modified DDP (if the latter remains). If the employee does not appeal, he / she does not need and should not get the time limit extension. We cannot think of a situation in which an employee who does not appeal would need an extension in time.
g. Interface between DDP and GP
It is important for employers and employees to know which procedure applies. There are six scenarios:
- Complaints unconnected to any form of disciplinary action: GP only
- Complaints arising from oral/written warnings or suspension on full pay: GP only.
- Constructive dismissal: GP only
- Direct dismissal or non-renewal of expired fixed-term contract: DDP only, regardless of the reason for dismissal
- Relevant Disciplinary Action short of dismissal (RDA): DDP but
- if employee complains that taking RDA is discriminatory or not based on conduct or capability, GP as well as DDP; but
- if statement of grievance lodged before DDP appeal hearing, deemed compliance with remainder of GP.
- Complaints arising from operation of DDP (dismissal or RDA) but where 5. does not apply e.g. employee alleges a failure to make reasonable adjustment for disabled worker at a DDP meeting or complains of a discriminatory remark by management witness during hearing: GP in addition to DDP.
Problem: This is far too complicated and the price of a mistake far too high (especially when combined with the complication as to jurisdictions). Extending the application of the DDP to all forms of disciplinary action would help, but even if that step is not taken, there are more modest options for reform.
Solution 1: An employee should not have to follow the GP in respect of any complaint he / she might have arising from disciplinary procedures. The employer should accept full responsibility for getting those procedures right in a non-discriminatory way. In particular, why should an employee have to raise a grievance if disciplined purportedly on grounds of conduct or performance but actually on some other ground? This would require scenarios 5 and 6 to be abolished and RDA short of dismissal brought into line with dismissal (scenario 4 above).
Solution 2: Combine and simplify scenarios 5 and 6. If an employee has any complaint about the operation of a disciplinary procedure (short of dismissal), they should have the option of raising it in a one step GP. If they raise it before or at the appeal stage, the appeal hearing can deal with it, otherwise there would be one grievance hearing (but no obligation on the employer to offer an appeal stage).
h. Unfair dismissal
The “range of reasonable responses” test means that only the most perverse decision to dismiss will be subject to review, leaving only procedural protection. So the partial reversal of the Polkey principle (in exchange for compliance with the minimal standards of the DDP) depended on a sympathetic interpretation by the tribunals if it was not to mark a major further weakening of protection from unfair dismissal.
Problem: The EAT has interpreted the amended legislation as excusing non-compliance with any procedure, including informal unwritten practices and sources of the standards of a reasonable employer. This apparently includes even the provisions of the ACAS Code of Practice. As the editor of IRLR has commented, this goes well beyond what had been thought to be the effect of the 2002 Act, diminishes the force of the ACAS Code and is difficult to reconcile with authorities such as Devis v Atkins.
Solution: Revisit the amendments to unfair dismissal law to limit the partial reversal of Polkey to breaches of an employer’s own established procedure.
2. OTHER ISSUES
a. Contravention of duty or restriction
Regulation 4(1)(f) disapplies the DDP for dismissals on the grounds that continued employment in the position held would contravene a duty or restriction imposed by / under any enactment.
Problem: This exception was inserted at the insistence of construction employers in London, who argued that they risked criminal liability for breaching the Asylum and Immigration Act 1996 if they continued to employ someone whom they discovered to be an illegal immigrant. But the exclusion is much wider than necessary and catches, for example, cases of a driver who loses their driving licence.
Solution: Restrict the exclusion to any situation where continuing to employ the individual in any job would expose the employer to criminal liability.
b. Collective grievances
Regulation 4(1) disapplies the DDP where there are either collective dismissals and re-engagements or collective redundancies of 20 or more (so that s.188 of the 1992 Act applies). In contrast, Reg 9 requires employee representatives to name all employees on whose behalf they raise a collective grievance.
Problem: The lack of parity between collective dismissals and collective grievances is a mirror image of the false parity between Step 1 in the DDP and GP respectively (see 1A above). An employee risks section 32 exclusion or a reduction in compensation if their name is left off the list of employees on whose behalf a collective grievance is raised. In cases of very large numbers (such as equal pay claimants in the public sector) the individual names of the employees are of little interest to the employer – what they really want to know is the category of employee.
Solution: Bring Reg 9 into line with s.188 of the 1992 Act. There should be deemed compliance with the GP for all employees falling within the “description” notified by the employee representative.
c. Interim relief
Regulation 5(1) provides for deemed partial compliance with the DDP in interim relief cases. This is sensible in principle - interim relief applications must be lodged within seven days of dismissal and so there is often not time for an appeal stage to run its course.
Problem: The deemed partial compliance applies only to interim relief applications under section 128 of the 1996 Act, not to those under section 161 of the 1992 Act. So whereas the provision embraces an Interim Relief application by an employee who alleges dismissal because he / she supported a union’s recognition claim, it does not catch one by an employee dismissed for performing his/her trade union duties.
Solution: Extend reg 5(1) to embrace I.R. applications under the 1992 Act.
DISPUTE RESOLUTION JURISDICTIONS
TRIBUNAL CLAIMS FALLING WITHIN THE PROCEDURES
Equal Pay Act 1970
Section 2 Equality clause
Sex Discrimination Act 1975
Section 63 Tribunal jurisdiction
Race Relations Act 1976
Section 54 Tribunal jurisdiction
Section 145A Inducements relating to union membership or activities
Section 145B Inducements relating to collective bargaining
Section 146 Action short of dismissal, trade union grounds
Para. 156, Sch A1 Detriment in relation to union recognition
Disability Discrimination Act 1995
Section 17A Tribunal complaints
Employment Rights Act 1996
Section 23 Deductions from wages
Section 48 Detriment in employment1
Section 111 Unfair dismissal2
Section 163 Redundancy payments
National Minimum Wage Act 1998
Section 24 Detriment in relation to national minimum wage
The Employment Tribunal Extension of Jurisdiction (England and Wales) and (Scotland) Orders 1994
Breach of employment contract on termination of employment3
Working Time Regulations 1998
Regulation 30 Breach of regulations
Transnational Information and Consultation of Employees Regulations 1999
Regulation 32 Detriment relating to European Works Councils
Employment Equality (Sexual Orientation) Regulations 2003
Regulation 28 Discrimination in the employment field
Employment Equality (Religion or Belief) Regulations 2003
Regulation 28 Discrimination in the employment field
European Public Limited-Liability Company Regulations 2004
Reg 45 Detriment in Employment4
Information and Consultation of Employees Regulations 2004
Reg 33 Detriment in Employment4
Occupational and Personal Pension Schemes (Consultation by Employers etc) Regs 2006
Reg 17 & Sch Detriment in Employment4
Employment Equality (Age) Regulations 2006
Regulation 36 Discrimination in the employment field
TRIBUNAL CLAIMS FALLING OUTSIDE THE PROCEDURES
Section 68A Unauthorised check-off deduction
Section 137 Refusal of employment on TU (non) membership grounds
Sections 168-170 (Paid) time off for TU / Learning Rep duties/activities
Section 183 TU complaint of failure to disclose information for CB
Sections 189 & 192 Protective award & entitlement in collective redundancies
Pension Schemes Act 1993
Sections 124 SoS failure to pay contributions to insolvent scheme
Pensions Act 1995
Sections 62-64 Equality clause in pension schemes
Employment Rights Act 1996
Section 11 Failure to provide accurate written statements (written
particulars, changes or itemised pay)
Sections 34 Failure to pay guarantee payment
Sections 51 Time off for public duties
Sections 54 Paid TO to look for work during redundancy notice
Sections 57 Paid TO for ante-natal care
Sections 57B Paid TO for dependants
Section 60 Paid TO for pension scheme trustees
Section 63 Paid TO for TU / Employee representatives
Section 63B Paid TO for young person to study / train
Section 70 Remuneration if suspended on medical/maternity grounds
Section 80 Parental leave
Section 80H Flexible working & detriment
Section 93 Failure to provide written reasons for dismissal
Section 188 SoS failure to make a payment on employer’s insolvency
Employment Rights Act 1999
Section 11 Right to be accompanied
Safety Reps etc Regs 1977
Reg 11 Paid TO for safety rep
Health & Safety (Consultation etc) Regs 1996
Sch 2 Paid TO for training
Transnational Information & Consultation Regs 1999
Reg 27 Paid TO
Part-Time Workers etc Regs 2000
Reg 8 Less favourable treatment & detriment
Fixed-Term Employees etc Regs 2002
Reg 7 Less favourable treatment & detriment
Reg 9 Declaration of permanent status5
Flexible Working etc Regs 2002
Reg 15 Right to be accompanied & postpone a meeting
Reg 15 Failure to inform / consult6
Employment Equality (Age) Regulations 2006
Sch 5 Para 5 Void term of collective agreement or rule of undertaking
Sch 6 Para 11 Failure to inform employee re working beyond retirement
Sch 6 Para 12 Right to be accompanied
1 Covers wide range of detriment
2 Covers all categories of unfair dismissal, save where excluded by Reg 4 of the 2004 Regs e.g. collective redundancy dismissals, most industrial action dismissals, retirement dismissals. Direct dismissals attract the DDP; constructive dismissals the GP; but note the debate that reg. 4(9) TUPE 06 (resignation in face of substantial changes in working conditions) is treated “for any purpose” as dismissal by the employer – so which procedure?
3 Not mentioned in Schedule 4 so s.32 does not apply, but if you don’t grieve you get hit on compensation
4 With effect from 6 April 2007; transitional rules apply
5 But employee must first have requested written statement under Reg 9(1)
6 Formerly Reg 11 of TUPE 1981