If the holy Grail in unfair dismissal cases is a quick, cheap, informal and fair hearing where lawyers are unnecessary, then the search may be set to continue.

The talk of a different system to the employment tribunal route for unfair dismissal cases has spanned two decades and draft legislation has been in existence for five years. It has now resulted in the ACAS arbitration scheme which is an alternative to a tribunal hearing. Introduced with minimum fanfare and apparently little enthusiasm on 21 May 2001 the acid test will be whether the scheme delivers what it aims. The aims are, after all, broadly the same as currently apply in tribunals. Employment Tribunals themselves were created as an alternative to the Civil Courts with similar aims to that of the arbitration scheme.

Key features of the ACAS scheme

Instead of a panel of three (a lawyer, an employee representative and an employer representative) there is a single arbitrator appointed to the case under the ACAS scheme with experience in employment relations. It is not therefore an industrial jury that decides the case.

Another difference is that the hearing is held in private, unlike a tribunal hearing. The result of the arbitration as well as the hearing will be confidential to the parties.There will be no cross-examination of witnesses or the giving of evidence under oath. The taking of the oath, as Jeffrey Archer now knows, is the mechanism tribunals and courts use for ensuring that witnesses tell the truth. If a witness lies on oath they have to account not only to their conscience or religion, but also to the criminal law - it is a contempt of court to lie on oath and can also involve the crime of perverting the course of justice. None of this will be available in the ACAS arbitration scheme. In addition, questions cannot be put to the other side's witnesses - cross examination - but only by the arbitrator who is independent and neutral. It is essentially an investigative procedure.

But the reality of most unfair dismissal case is that there is bad feeling on both sides and applicants are entitled to view a tribunal case as Get Your Own Back Time. They have after all lost their job, feel wronged and disempowered. As the House of Lords described in Johnson v Unisys (see this issue of LELR) the obligation of trust and confidence does not survive dismissal. It is only if there is a genuine prospect of re-instatement that both parties will feel an obligation to maintain a workable relationship which can better be preserved through a non-adversarial adjudication system.

Given that it is generally accepted that the best remedy for having been unfairly dismissed is to be given the job back, what are the chances of this happening through the ACAS scheme? On paper, the same as in a tribunal - the awards are the same, the same principles and criteria will apply. In practice there is a possibility that reinstatement will be awarded more often if delays do not build up in the arbitration scheme as they have with the Tribunal. The delay from dismissal to hearing is a factor in both whether an ex-employee wants to return and whether it is practicable for them to do so.

So in two crucial respects - privacy and exclusion of cross examination - the ACAS scheme is not designed to give an applicant their day in court and the triumphalism and confrontation that can categorise tribunal cases should be absent.

Unlike tribunals, there will be no fixed hearing centre - hearings will be held at a neutral venue - an ACAS office or hotel convenient to the parties. It will not be at the former workplace unless the employer consents. ACAS bears any cost of room hire.

The parties are expected to co-operate in agreeing a date and venue with the arbitrator to take place within two months of the case being referred to the ACAS scheme. If that does not happen, the arbitrator can set the date and venue him or herself. Until the case load builds up cases are likely to be heard quicker under the arbitration scheme than the present delays in the Tribunal system.

The scheme's aim is for the cases to last no more than half a day although it is not at all clear how this can be ensured. Lawyers are not encouraged, but cannot be prevented. The scheme provides that they are given no special status - as is the case with tribunals.

The scheme aims to provide finality in cases and so there is no right of appeal from the arbitrator's decision except on a point of EC law or the Human Rights Act 1998 or to the validity of the arbitration and whether the dispute was within the scope of the scheme itself. The appeal route is to the High Court or Central London County Court.

The scheme only covers unfair dismissal claims - any other type of case, unpaid wages for example, discrimination, breach of contract cannot be dealt with by the arbitrator - even if the case is a mixed claim and contains unfair dismissal and other types of claim. Also the scheme does not cover any jurisdictional issues - for example whether an individual is an employee, has sufficient service to bring a claim, or lodged their tribunal claim within the time limits.

Entry into the scheme will be via the Tribunal - an applicant will have to complete an tribunal claim form (ET1) in the normal way and if both parties agree that the case should go to arbitration under the scheme, a formal compromise agreement will have to be completed. All the requirements of a compromise agreement must be complied with - independent advice from a qualified trade union official, ACAS officer or lawyer and the tribunal claim is then dismissed on the basis that the parties have agreed with the referral to an ACAS arbitrator.

What are my chances?

Of course, the unwritten consideration that both sides will assess before choosing the scheme is 'Am I more likely to win if the case goes to arbitration?'. The prospects of success in any case are largely determined by the yardstick by which fairness is judged. Tribunals consider the test of 'reasonableness' by reference to the Employment Rights Act 1996, the ACAS Code of Practice and case law - the range of reasonable responses and so on. Under the ACAS scheme the arbitrator must have regard to the general principles of fairness and good conduct in employment relations, including the ACAS Code. Neither the arbitrator nor the tribunal may substitute what they would have done for the actions taken by the employer.

So slightly different wording, but will the test of fairness be the same under the scheme as in the tribunal? The big question for which there is no certain answer. The lack of transparency and openness of the proceedings may mean that the precise formulation of the fairness test is never developed consistently across the panel of arbitrators or publicly articulated. The voluntary nature of the scheme however is likely to ensure that if the test of fairness departs significantly from the one adopted by the tribunals there will be one side of industry that will choose not to use the scheme and prefer to live with the existing system.

Some unions are already using the scheme and welcome its informality, finality and promise of speed. In the longer term it is hard to see how it will avoid replicating the tribunal system and its success may depend on how well it is resourced and the quality of the arbitrators.

  • Full copies of the scheme itself, a guidance note and introduction prepared by ACAS are available from the ACAS website - www.acas.org.uk.