Hazel Cottage Studio Weston-on-the-Green. Hazel Cottage Studio Weston-on-the-Green OX25 3QX OX25 3QX BRIEFING

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1 ! BRIEFING All Change Repeal of the Statutory Dispute Resolution Procedures in April 2009 Introduction This note examines the effect of the repeal of the statutory disciplinary and grievance procedures, outlines in more detail what will be replacing them, and explores the impact of these changes for employers. Summary of the New Approach! The changes take effect on 6 th April 2009, and are designed to provide a more efficient system for workplace dispute resolution.! The Employment Act 2002 (Dispute Resolution) Regulations 2004, and related provisions of the Employment Act 2002, are to be repealed. This does away with (apart from some transitional arrangements) the compulsory disciplinary and grievance procedures that were introduced in 2004.! At the same time, a new ACAS Code of Practice (the Code ) will be introduced.! The Code will not have legislative force, and a failure to comply with it will not, in itself, make a person or organisation liable to legal proceedings in the Employment Tribunal.! The Code will need to be complied with as Tribunals will take it into account when considering relevant cases. Tribunals will have powers to adjust compensation by up to 25% (either upwards or downwards if there is a failure to comply with the Code by the employer or employee).! The Code is brief (10 pages), and provides broad principles on discipline and grievance handling in the workplace, (none of which will come as a surprise to either employers or employees).! ACAS has also issued longer non-statutory guidance ( Guidance ) for dealing with disciplinary and grievance situations. This supplements the Code. Tribunals will not be required to have regard to the Guidance.! The Guidance is designed to help employers and employees to understand the Code and how to reflect it in their policies and behaviour. If you are interested in advice or training then please contact the firm

2 ! Employers and employees should have regard to both the Code and the Guidance under the new regime. More detail is provided in the note below. Employers will still need to have disciplinary and grievance procedures in order to be compliant with the Code.! The Code and the Guidance can be found at Questions and Answers Below we set out commonly asked questions and answers on the detail of the new regime: What situations are covered/not covered by the Code? (a) Disciplinary Situations The Code will apply to disciplinary situations. The term disciplinary situation is not defined, though the Code is clear that it includes misconduct and/or poor performance. The Code expressly states that it does not apply to redundancy dismissals or to the non-renewal of fixedterm contracts. Under the pre-6 th April regime these situations were covered by the statutory dismissal procedures. Their specific exclusion from the new regime means that employers will not be bound by the Code when dealing with these cases, but they will still need to ensure that such dismissals are fair in all of the circumstances. This will include adopting a fair process, which is likely to entail broadly the same steps anyway. There is room for argument over whether other dismissals (such as dismissals for retirement, reorganization and genuine sickness absence) would be covered by the Code. However, even if the Code does not apply, the requirements of general fairness will inevitably involve many of the basic steps included in the Code. In relation to capability, the introduction to the Code specifically states that employers who have a separate capability procedure may prefer to address performance issues under this procedure, though if so, the basic principles of fairness under the Code should still be followed and may need to be adapted. (b) Grievances The Code will apply to grievances, defined as concerns, problems or complaints that employers raise with their employers. The Code will not apply to collective grievances (i.e. grievances raised on behalf of two or more employees by a trade union representative or other workplace representative), which it states should be dealt with under an organisation s collective grievance process. It is not clear what should happen if an organisation does not have such a process. This is an area for potential litigation, and employers would be well advised to follow the Code in these circumstances to avoid criticism and a potential uplift in compensation. What alterations to policies will be necessary to implement the new rules? Drastic changes to disciplinary and grievance procedures are unlikely to be necessary, but it is advisable for businesses to review their dismissal and grievance policies to ensure that they are consistent with the Code and accompanying guidance. The Introduction to the Code does state that employees and, where appropriate, their representatives should be involved in the development of rules and procedures. It is

3 not clear from the Code what being involved means. It would be wise for employers to include at least some dialogue with employees if disciplinary and grievance procedures are being updated. What staff training will be necessary to implement the new rules? The Code specifically states that it is also important to help employees and managers understand what the rules and procedures are, where they can be found and how they can be used. Managers dealing with these situations should therefore be trained on the Company s procedures, as well as provided with copies of the Code and Guidance. What does the Code Say? The Code, which is quite brief (10 pages), contains four parts: (i) The Foreword. This is not part of the Statutory Code, and therefore does not have to be taken into account by Tribunals considering cases. (ii) A broad introduction which makes a number of general points about fairness. This emphasises that fairness and transparency are promoted by developing and using rules and procedures for handling disciplinary and grievance situations, and confirms that there are a number of elements to dealing with a situation fairly: - Employers and employees should raise and deal with issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions; - Parties should act consistently; - Employers should carry out necessary investigations to establish facts in a case; - Employers should inform employees of the basis of a problem and give them an opportunity to put their case in response before any decisions are made; - Employers should allow employees to be accompanied at any formal disciplinary or grievance meeting; and - Employers should allow an employee to appeal against any formal decision. The Introduction acknowledges that where formal action is needed what action is necessary will depend upon the circumstances. The size and resources of an employer will be taken into account when deciding relevant cases, and it may sometimes not be practicable for all employers to take all of the steps in the Code. (iii) (iv) A section on discipline - see below. A section on grievance see below What does the Code say specifically on discipline? The Code gives advice on how to handle disciplinary situations, and contains sections (with some detail on each) on establishing the facts of each case, informing the employee of the problem, holding a meeting with the employee to discuss the problem, allowing the employee to be accompanied at the meeting, deciding on appropriate action, and providing employees with an opportunity to appeal. One

4 point to note is that the right to appeal is not limited to dismissals, but to any disciplinary action, and employees should therefore be given an opportunity to appeal any formal warnings as well as dismissal findings. There is further guidance on specific special cases where disciplinary action is being considered against a trade union member, and where employees are charged with criminal offences. What does the Code say specifically on grievance? The Code gives advice on how to handle grievance situations, and contains sections (with some detail on each) on letting the employer know the nature of the grievance, holding a meeting with the employee to discuss the grievance, allowing the employee to be accompanied at the meeting, deciding on appropriate actions, and allowing the employee to take the grievance further if not resolved. What does the Code say on overlapping grievance and disciplinary issues? The Code provides that where an employee raises a grievance during a disciplinary process the disciplinary process may be temporarily suspended in order to deal with the grievance. Where the grievance and disciplinary cases are related it may be appropriate to deal with both issues concurrently. Will Employees have to raise a grievance before issuing a claim in the Employment Tribunal? No. Under the pre-6 th April 2009 regime, employees would have to raise a grievance before issuing proceedings. The admissibility of claims will no longer turn on whether a grievance is raised. However, if an employee fails to raise a grievance under the new regime it may count against them as being a failure to comply with the code, leading to a downward adjustment of up to 25% in any compensation they receive. Will employers have to hear grievances from former employees? Employers will no longer be forced to go through a formal grievance procedure in response to grievances raised by ex-employees. In practice however, it is still advisable to investigate an ex-employee s concerns especially as they may still bring proceedings. What are the potential problem areas in the Code? The Code generally sets out fair and sensible rules that should not be too controversial. There may be litigation over specific requirements where the wording of the Code is not precise or open to interpretation a number of these areas are highlighted in this note. A further example is that the Code states that employers should make a decision on the evidence available where an employee is persistently unable or unwilling to attend a disciplinary meeting without good cause. It is anticipated that the expressions persistently unable, and unwilling.without good cause may lead to debate, and if there is any doubt on what the Code requires advice should be sought. What Does the Guidance say? The Guidance runs to 74 pages and provides more detailed good practice advice for dealing with discipline and grievances in the workplace. It also contains some useful procedural flow diagrams and emphasizes the benefits of using a third party or mediator to help settle some disputes. Does the new regime signal an increased role for mediation? Earlier drafts of the Code stated that parties should attempt informal resolution, should do all they can to resolve issues in the workplace, and that recourse to a Tribunal should be a last resort. This has now

5 been diluted in the Code, so that only the Foreword (which does not attract a 25% adjustment to compensation) states that parties should attempt informal resolution, should seek to resolve issues in the workplace, and should consider using an independent third party. The Guidance does give more information about the potential role of mediation and sets out examples of cases where it may be appropriate or not. On balance there appears to be a slightly increased emphasis on mediation, though this is not enforced since it is not a part of the formal Code. What transitional provisions will apply and will the old procedures continue to have any relevance after 6 th April 2009? At 6 th April 2009 there will be disputes that have started but which are not yet the subject of a Tribunal claim, and others where proceedings have been commenced but the case has not yet been heard. There will therefore be a period of parallel regimes, where transitional arrangements apply, designed to clarify which regime will apply in any given case. These are contained in the Employment Act 2008 (Commencement No.1, Transitional Provisions and Savings ) Order A trigger event will determine whether the pre 6 th April 2009 regime, or the new arrangements, will apply to a particular case. The trigger in disciplinary situations will be the date when the employer has started disciplinary or dismissal action, the first stage of which will usually be the date on which a letter is sent to the employee by the employer. The trigger is grievance situations will be the date of the action about which the employee complains. The old regime will continue to apply in its entirety in cases where the trigger occurs before 6 th April The new regime will apply where the trigger occurs on or after this date. In grievance situations where the action about which the employee complains begins on or before 5 th April 2009 and continues beyond that date, the pre 6 th April 2009 regime will continue to apply, subject to final cut off dates. That regime will only continue to apply to such cases where the employee submits a written grievance or Tribunal Claim: (a) on or before 4 th July 2009 if it relates to a jurisdiction with a 3 month time limit (e.g. a discrimination or unfair dismissal claim); (b) on or before 4 th October 2009 if it relates to a jurisdiction with a 6 month time limit ( e.g. an equal pay claim). As the transitional provisions are not straightforward parties should take advice if the applicable regime is not clear. Concluding Comment It is obviously hoped that the new regime achieves the object of being a more efficient system for workplace dispute resolution, and does not give rise to the same volume of case law prompted by the current regime. The results will become apparent during the course of Julian Taylor Solicitors March 2009 This briefing contains a summary of various aspects of employment law. It is not intended to provide legal advice for specific cases. No liability is accepted for reliance on any of the information in this briefing. If advice is required please contact the firm.

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