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June 2008: Has the opportunity to transform workplace disputes been lost?

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Has the opportunity to transform workplace disputes been lost?
The government’s failure to make any significant changes to the way employment law disputes are resolved is a real lost opportunity – and our prediction is that companies will be the ones to suffer.

Failure to implement Gibbons
This may seem a long time ago but in a wave of publicity and with significant support some 15 months ago, the Gibbons Review recommended a combination of clear, simple, non-prescriptive guidelines for employers on how to resolve disputes and the provision of an incentive for following the procedures. Michael Gibbons said there should be a voluntary approach to encourage and enable greater use of alternative dispute resolution techniques to settle cases early, including more mediation.

It is of little wonder.

Costs fall on companies
The complexity of the rules and the harsh penalties for failing to follow even the most minor part of the statutory processes has given employers more need than ever before to obtain legal advice.

Employment Tribunal claims rose by 15% between 2006 and 2007, with many related to the interpretation of the statutory procedures.

And it’s business that suffers – with the average cost of defending a claim for business around £9,000.

With mediation working in at least 80% of disputes it seemed like an excellent opportunity to reduce the number of tribunals, cut costs for businesses and improve the working environment too, with a less adversarial approach to dispute resolution.

Recent changes shun simplicity
Since the Gibbons Review we have had the publication of the Employment Bill in December 2007 and last month the publication of the Draft ACAS Code on Discipline & Grievance and the Government response to workplace disputes consultation which provide a clearer picture of the government thinking for resolving disputes. But it’s not good news for those who want a simpler and more effective route to sorting out employee disputes.

The Employment Bill gives no specific mention of mediation. Instead there is a new proposal to give tribunals the discretion to increase compensation awards by up to 25% if an employer unreasonably fails to comply with a new statutory code of practice.

The ACAS Draft Code whilst commendably brief, is hardly going to be an effective basis for governing the way that disputes are resolved.

Generally it simply mirrors the existing three-step statutory regime (allegations in writing, meeting, appeal, all within a reasonable timeframe), which is precisely the workplace regime which infuriates businesses, employees and lawyers.

Therefore there will be little change in the way employers will be required to handle disciplinary and grievance matters.

And the Code fails to make the extent of an employer’s obligations clear. It uses phrases such as “reasonable time” and “promptly”. How is a business supposed to understand what is a reasonable time? No doubt this will provide further opportunity for the lawyers to argue and the Employment Tribunals to sort this one out. There is no mention of mediation or use of ADR which was a key pillar of The Gibbons Review.

From a mediation perspective, the Government Consultation is hardly much better. Whilst the Government envisages ACAS having an increased role with mediation and to maintain a dialogue with mediation providers on how to promote their services, there is no specific legal incentive to use mediation. This contrasts to legal provisions within Civil Procedure Rules and its accompanying case law which provides specific incentives to mediate.

The current statutory procedures will not be repealed until at least April 2009, and the government's track record of introducing controversial legislation on time is not particularly impressive for example, the Transfer of Undertakings (Protection of Employment) Regulations 2006 were a number of years late.

Unless there is a significant change in government thinking, the result is that business will continue to miss out on the benefits of ADR and mediation.

The opportunity to mediate could be lost unless:
  • employers challenge the legal norm and consider ADR and mediation in each employment dispute case
  • managers in larger companies are trained to understand how mediation can work with employee disputes, from the very early stages
  • employers ask their lawyers to recommend a mediator, instead of heading for the court room
  • employment law professionals become more familiar with the workings of mediation
  • employment lawyers embrace mediation as part of the dispute management service they offer to clients
  • in-house lawyers familiarise themselves with the process of mediation and educate senior managers to use it instead of punitive measures to manage employee disputes
  • HR professionals improve their understanding of mediation and introduce it as a matter of course for employee disputes
  • mediators themselves explain the benefits clearly and convince company bosses that they can get a better or equal result, without the added cost and hassle of a tribunal

I suppose it’s too much to ask for a Government u-turn – a la 10p tax rate – but this is what we’d like to see – more sense in Government policy, and if that won’t come perhaps an enlightened approach by lawyers and companies, a realisation that battling out disputes in an adversarial manner isn’t the only way.

Guide to avoiding disputes landing in court
Human Law Mediation has published a new guide – Keeping Away from Employment Tribunals and Court Room Battles – tackling this topic in detail. It is essential reading for anyone using mediation in their organisation for the first time, for lawyers keen to understand what all the fuss is about and for HR professionals who want to understand this highly effective dispute resolution technique.

The guide is free and can be reprinted and distributed using Adobe Acrobat Reader. Justin is so evangelical about the power of mediation he is keen to see his message spread far and wide.

Items addressed in the guide include:
  • The cost of disputes to UK businesses
  • What causes disputes at work
  • Why the current system for settling disputes doesn’t work
  • The many alternatives available to Court room battles
  • Why mediation is the poor relation
  • A six point plan for mediation success
  • And a model for effective mediation
For a copy of the guide email Justin Patten here.
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