But employers need all potential claims to be revealed first
The first quarterly update on early conciliation released by Acas this month shows that over 17,000 people have used the new service since it was introduced in May this year. Coupled with recent statistics from the Ministry of Justice revealing a 71 per cent drop in tribunal claims during the first quarter of 2014 compared to the same period in 2013, these figures suggest that employees prefer to reach an early settlement with their employer rather than face a full tribunal. While this is good news for employers, the law of unintended consequences means that there are many pitfalls in the current scheme.
Principle
The early conciliation scheme is the final piece of the jigsaw designed by government to streamline the employment tribunal system by encouraging claimants to resolve issues without going to a tribunal. The scheme’s overarching principle is that a claim cannot be issued in the employment tribunal (apart from a few limited exceptions) unless the worker has received an early conciliation certificate from Acas confirming that they have attempted to resolve the matter.
It is possible for an employer to initiate conciliation but the process is usually started by the worker completing an early conciliation form. Workers are then contacted by Acas and are asked to indicate whether or not they are interested in conciliation.
Resolution
On the face of it, an early and relatively quick resolution to any problems that have arisen at work has obvious attractions. Both parties can move on without protracted and expensive litigation. In fact, only a small proportion of people do not attempt some sort of resolution at this stage, with Acas figures showing that of the 16,605 employee notifications received in the first quarter of the scheme’s operation, just 1,122 were from people unwilling to engage in conciliation.
However, workers may agree to conciliation without really knowing what their claim is worth. The chances are they have not taken legal advice at this stage, and may not be articulating their claim properly, or indeed appreciate whether it has any merit. It may well be that they settle a claim for less than it is worth. Conversely, unrealistic expectations may prevent an employee from reaching a settlement.
Incentive
Employers, for their part, may have little incentive to settle claims at this stage since potential claimants are not required to spell out precisely all the claims they are thinking of lodging before a tribunal. Even when they do, it may not be clear what legal claims they are making. For instance, if they say they are experiencing bullying and harassment, is this a claim under the Equality Act and, if so, what protected characteristic (race, sex, religion and so on) are they are relying on? Some large public sector employers have stated that they are not engaging in the conciliation process and will wait to see a fully detailed complaint. Others, having heard the allegation, may wait to see whether the worker is going to stump up fees for issuing a claim. The claim may then become clearer.
There is also a danger, from the employer’s perspective, that a settlement is reached in respect of some but not all the claims the worker wishes to bring. If the COT3 - the document formalising settlements achieved through Acas - is not properly drafted, an employer may still face a tribunal claim at a later date. Employers, therefore, need to ensure that claims for breach of contract and discrimination in particular are covered - even if these are not initially raised by the claimant.
Alternatives
Out of the 17,000 notifications received so far by Acas, only 540 have been made by employers. An employer wishing to dismiss an employee can use the ‘protected conversation’ mechanism, followed by a settlement agreement, which requires the claimant to get independent legal advice. Alternatively, the employer may go straight to a settlement agreement at the time of the dismissal. Where there is a clean break in the employment relationship this procedure may seem the logical route for employers, with early conciliation adding nothing to the process. However, where the relationship is ongoing and seemingly intractable, it may be worthwhile for the employer to consider whether approaching Acas as a neutral intermediary may assist in getting an employee back to work - or in demonstrating that all avenues to conciliation have been explored.
Susan Belgrave is an employment barrister at 7 Bedford Row
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