In the news. ACAS Conciliation what every employer needs to know

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1 In the news April 2014 No Easter bunnies or chocolate eggs hiding in this edition, instead some interesting articles, including the hottest point for discussion the ACAS conciliation service which came into effect on 6 April ACAS Conciliation what every employer needs to know On 6 April 2014, Early Conciliation (EC) was introduced by the Enterprise and Regulatory Reform Act 2013, with the aim of making tribunal systems more efficient. This, along with the recent Employment Tribunal statistics, which showed a 79% reduction in the number of claims (see March s edition of ), demonstrates a potentially seismic shift from the employment litigation to Alternative Dispute Resolution (ADR) in the context of employment claims. The impact of EC is anticipated to be a widespread, as it will provide a highly useful tool for employers across the UK to settle employment claims without involving the Employment Tribunal. EC is essentially a four stage procedure: 1. The prospective Claimant must complete an Early Conciliation Form and send it to ACAS regardless of whether they want to settle a dispute by avoiding presenting an employment tribunal (ET) claim form, or not; 2. An ACAS Early Conciliation Support Officer (ESCO) will then make a reasonable attempt at contacting the Claimant; if this is successful and the Claimant does indicate that they wish to proceed with EC, and employer, when contacted also agrees to engage in EC, the names and addresses of the parties will be sent to a Conciliation Officer who contacts both sides to solicit any offers to put to the other side; 3. The Conciliation Officer must try to promote settlement between the parties within 1 month of receiving the Early Conciliation Form (the prescribed period); 4. If a settlement cannot be reached, because the Claimant or employer declines EC or because the Conciliation Officer considers that it is not possible, or because the prescribed period expires, he or she will issue an EC Certificate which will allow the parties to proceed to the Employment Tribunal. How will EC benefit you as an employer? Head Office 3 Lonsdale Gardens Tunbridge Wells Kent TN1 1NX T F Thames Gateway Corinthian House Galleon Boulevard Crossways Business Park Dartford Kent DA2 6QE T F ACAS have recently quoted the results of independent research which has found that the average cost to an employer resolving a case through Pre-Claim Conciliation (the predecessor to EC) is 475; compared to an average of 3,700 in an Employment Tribunal. Therefore, engaging with EC will most certainly save you, as an employer, valuable time and money; Using EC will maintain and strengthen relations within the workplace, as issues can potentially be resolved in a non-contentious environment; Conciliation Officers will serve as impartial observers to assist both parties in understanding the strengths and weaknesses of their case before the commencement of legal proceedings; 1

2 EC is a confidential process, and engaging with it could prevent sensitive information reaching the public domain. What are the disadvantages of EC in its current form? At the moment, EC is entirely voluntary. ESCO s are under a duty to make a reasonable attempt at contact with the parties. This duty is easily satisfied; if ACAS are unable to contact the potential Claimant or Respondent (employer), or have not been given permission to do so, they will simply conclude that settlement is not possible, and issue an EC Certificate. This means that a Claimant or Respondent is able to dis-engage with the process relatively easily merely by not playing ball. Whilst the parties are attempting to reach a settlement within the 1 month prescribed period, the clock for bringing a tribunal claim is effectively paused, and does not start ticking again until an EC Certificate is received. As a result, employees now have longer than 3 months to bring tribunal claims; possibly 3 months plus the prescribed period of 1 month plus a 2 week extension if both sides agree to attempt to reach settlement using EC. On the face of it, ACAS EC can potentially answer the prayers of employers who are tired of dealing with litigious employees. It is certainly the case that the scheme will encourage parties to settle issues out of ET, which is likely to save a great deal of time and money, not to mention stress. We recommend that all employers take the EC process seriously, as it is likely to feature heavily in employment claims in the foreseeable future. We also recommend taking legal advice on how to train staff in dealing with ACAS; as well as on how best to negotiate tactically when dealing with individual cases. Beware! The danger of using templates The recent case of Crime Reduction Initiatives (CRI) v Lawrence serves as a shrewd reminder to employers to take care when corresponding with employees, in particular, making sure that any letters or invitations are amended and worded appropriately In the case of Lawrence, the Claimant, due to a clumsy HR error, was invited to a disciplinary hearing rather than a capability meeting. As a result, Ms Lawrence, who was suffering from postnatal depression, did not attend the meeting and instructed that it should proceed in her absence. Ms Lawrence was dismissed on the grounds of ill-health. Ms Lawrence subsequently brought claims for unfair dismissal and discrimination arising from disability. The Employment Tribunal held that her dismissal was unfair because the incorrectly worded letter had intimidated and discouraged her from attending the meeting. The tribunal accepted that Ms Lawrence s dismissal was a legitimate aim, due to the need to manage the work force. However, the majority found that the dismissal was not objectively justified, because the letter deprived her of the opportunity to be consulted". Furthermore, the tribunal also stated that the failure to give the Claimant proper notice of the capability hearing amounted to indirect discrimination arising from disability which was not justified. 2

3 Under section 15 of the Equality Act 2010, "discrimination arising from disability" occurs where both: An employer treats an employee unfavourably because of something arising in consequence of the employee's disability; and The employer cannot show that the treatment is a proportionate means of achieving a legitimate aim. The second limb requires the application of an objective justification test, which is determined on the basis that the employer can prove it was pursuing a legitimate aim; and that the measures taken to achieve the aim were appropriate and proportionate. On appeal, the EAT stated that the tribunal had erred in taking the letter into account when deciding whether dismissal was a proportionate means of achieving a legitimate aim, as it is settled law that purely procedural questions are irrelevant to dealing with objective justification. The EAT considered the letter a procedural matter and did not go to the substantive decision to dismiss. The fact that the letter was incorrectly worded and discouraged Ms Lawrence from attending the meeting was irrelevant to a finding on objective justification. The EAT also criticised the tribunal s findings on indirect discrimination. The EAT allowed the employer (CRI s) appeal. Although the employer was ultimately successful in this case, it nevertheless serves as a reminder to all employers of the potentially wide reaching consequences of inappropriately worded documentation, or badly adapted templates. In this case, one ill-fitting word had extremely costly consequences. The Living Wage What is it and does it help employees working in the care industry lead vigorous, full human lives? The Living Wage is part of a campaign by the Living Wage Foundation to improve the lives of low-paid workers. It was launched in 2001 by parents in East London who were frustrated that working two minimum wage jobs left them no time for family life. Their basic aim was to provide workers high enough wages to enjoy vigorous, full human lives. What is the Living Wage today? Unlike the National Minimum Wage (NMW), the Living Wage is an informal benchmark, not a legally enforceable minimum level of pay; It is calculated for the UK by the Centre for Research in Social Policy at Loughborough University, and for London by the Greater London Authority; 3

4 It is currently set at 7.65 per hour outside the capital and at 8.80 for London; compared to the NMW which is set at The Living Wage in the Care Industry According to the Equality and Human Rights Commission report into home care, there was evidence of systematic failure across the UK, including cases of physical and financial abuse. The key reason for this, according to the watchdog was that carers neglected tasks because they were paid too little for their time. This is supported by a recent government report which estimated that more that 2,400 workers in the care sector were underpaid the NMW in the last two years. The investigations revealed that nearly 340,000 in arrears was owed to workers. The main question left unanswered is how the care industry can commit to paying workers the Living Wage, when they are already struggling to pay the NMW? This is a question, to which there is no easy answer. However, many commentators have highlighted that in order to address the failings in the care industry, the problem needs to be addressed at the root. In other words, workers within the care industry need higher wages to incentivise improvement. In October 2013, Citizens UK launched the Social Care Campaign with the aim of improving social care and achieving a better deal for care workers before the 2015 General Election. The campaign involves a wide range of players including care commissioners, care workers and the Government. Notably, the Charter envisages care workers are paid a Living Wage and are paid for their travel time. Citizens UK are encouraging care providers and commissioners to work towards these standards where possible, in order to improve the care industry across the UK. What are the benefits of becoming a Living Wage Employer? Supporters claim that the Living Wage improves productivity, recruitment and retention; It has the potential to improve the quality of life of workers and their families; happy workers make more efficient workers; The campaign has gained widespread and high-profile support. It is worth considering becoming involved in the scheme now, with the help of the Citizens UK Social Care Campaign; Accredited employers become part of a strategic network of employers that support and promote the Living Wage; Involvement in the scheme will assist in fixing the root of the problem that led to the systematic failure. The Living Wage certainly provides food for thought as its adoption may assist in remedying the care industry s core problems. However, simply paying higher wages is not as easy as it sounds, especially as the care industry has struggled with paying even the NMW. A possible option would be to consider phased implementation, and the Living Wage Foundation can work with employees to facilitate this within the business. 4

5 Our team For more information on anything mentioned in this newsletter please contact a member of the employment team. Nick Hobden Susanna Gilmartin Partner Partner nick.hobden@ts-p.co.uk susanna.gilmartin@ts-p.co.uk Ben Stepney Kerri Boorman Solicitor Paralegal ben.stepney@ts-p.co.uk kerri.boorman@ts-p.co.uk Peter Jones Senior Associate peter.jones@ts-p.co.uk Although this newsletter highlights some key issues relating to employment law, it should not be considered comprehensive and is not a substitute for seeking professional advice on a specific issue. 5