Data shows benefit of settling claims before tribunal as early conciliation replaces PCC
As Acas’ early conciliation (EC) service came into force on the 6th of April 2014, figures revealed that the new service’s predecessor, pre-claim conciliation (PCC), saved the taxpayer £18.6 million in 2010/11.
Research by Acas found that for every pound invested in its PCC service during the 2010/11 financial year, at least five pounds were contributed to the British economy, which translates to a net benefit of £18.6m.
Employers also made significant savings by settling disputes early, Acas chairman Sir Brendan Barber said.
“We know from previous independent research that PCC saves employers on average £3,200 in management time and legal costs compared to dealing with an employment tribunal case,” he explained.
With the launch of EC, any employee thinking of taking their boss to an employment tribunal will now be required to speak to Acas to discuss the option of settling their dispute at an earlier stage.
The new process announced earlier this year, is designed to reduce the number of disputes that go to tribunal.
There will be a transitional (voluntary) period between the 6th of April and the 5th of May, then the requirement to contact Acas will become mandatory.
Acas’ EC procedure builds on the success of the PCC service, which was also free and dealt with 20,000 disputes a year from its inception in 2009.
Employment relations minister, Jenny Willott, welcomed the new rules, calling EC “good news for employees and employers”.
“It will help them resolve their workplace disputes, avoiding the stress, time delays and excessive costs all too often associated with tribunals,” she said.
But employment law experts have warned that rules on time limits for bringing claims – which will see the EC period expire after one month – are likely to cause confusion.
“Confusion over time limits may result in an increased number of preliminary hearings by tribunals - which works against the government's aim,” said Helen Hall, legal director at law firm DLA Piper.
“It's also unclear as to whether the introduction of a mandatory process will provide incentives to employees who wish to avoid paying the claim fee, or further cause employers to test how serious an employee is by refusing conciliation and seeing if the employee goes ahead and pays the fee to bring the claim," she added.
Geoffrey Mead, partner at global law firm Eversheds advised employers to consider how they will respond to contact from Acas, under the law.
“One option might be to nominate a member of staff to whom Acas will refer all EC calls, for example someone in HR, so that they might conduct a brief risk analysis and seek advice, where the circumstances are more complex or sensitive. It will also be important for employers to be aware of the EC period so as to appreciate when tribunal time limits expire,” he said.
The new tax year (April 6, 2014) introduced a number of changes to UK employment law including employers facing fines of up to £5,000, plus back payments, if they lose a tribunal claim.
A rise in National Insurance allowances for employers and a fall in corporation tax to 21 per cent also came into force on the same day.