Dispute Resolution Regulations

October 1 is D-Day for new regulation, learn how to unpick the DRR with our feature.

Dispute regulations pose new tribunal threat

If you run a business, the latest employment law changes affect you. Derek Kemp of Liquid HR explains why and what you need to do to stay on the right side of the law.

The Dispute Resolution Regulations, updated on 1st October 2004, were the latest major changes to employment law come for business owners to contend with and they’re perhaps the most onerous yet.

Despite how it may initially appear, these regulations are not about dealing with strikes and industrial disputes – they are aimed at handling issues between individual employees and their employer and dramatic implications for all businesses.

It has long been the requirement for organisations to have a fair procedure for dealing with conduct and capability issues in the workplace. However, until now each case has been judged on its own merits. Case law and codes of practice such as the ACAS code have given organisations a good indication regarding what would be regarded as a fair process. All of this is now completely altered.

All businesses must now develop, publicise and implement mandatory procedures in all of these areas: Contracts of Employment, Discipline, Grievance, Temporary Employees, Redundancies.

If these are not applied in every circumstance employers are automatically guilty of unfair dismissal – whereby Employment Tribunals will award a minimum of four weeks pay and increase any award of compensation by up to 50%. The Tribunal will not have the flexibility to listen to any excuses about not following the minimum requirements of the law.

The minimum award of 4 weeks’ pay will apply even if the employer has a good and fair reason to dismiss, but has simply not followed the correct process, or written the correct letter.

As a result, all employers need to take action to review their policies and procedures now.

With the rapidly rising number of claims going to Employment Tribunals the government is introducing these regulations to encourage employers and employees to resolve their differences between themselves, with the tribunal system being used by an employee only as a last resort. The fear among employers is that, in reality, they will give another opportunity for claims to be made and cases to be won on a ‘technicality’.

Unfortunately these regulations are being added to those currently in place, thereby complicating this difficult area rather than simplifying the processes.

The statutory dismissal procedure does not only apply to disciplinary cases. It must be followed when an employer is contemplating the dismissal of an employee for any of the following reasons: Conduct, Capability, Redundancy, Non-renewal of a fixed term contract, Compulsory early retirement.

All your procedures relating to these actions need to be updated to reflect the new requirements. The statutory process also applies where employers take other disciplinary action such as demotion or unpaid suspension.

Two new procedures apply in this area. These are:

Standard Procedure

Step 1: A written statement dealing with the allegations or characteristics that led the employer to begin the process including an invitation to a meeting to discuss the matter.

Step 2: Before any action takes place the meeting must occur after the employee has had time to consider his or her response to Step 1. After the meeting the employer informs the employee of the decision and notifies him/her of their right to appeal.

Step 3: An appeal hearing must take place if requested by the employee after which the final decision is communicated.

Not too difficult, but what must be stated in the invitation, how it is delivered, whether a “companion” must be invited and the process during the hearing are all critical issues. The timing of hearings, even after dismissal, the actions taken upon the non-attendance of the employee and the number of times the procedure is followed before a dismissal occurs all determine the likelihood of success or failure if a case of Unfair Dismissal is brought.

The second procedure called the “Modified Procedure”. This could apply to a very small proportion of Gross Misconduct cases. However, this is even more confusing as it can only be used where a Tribunal will agree that it was reasonable for the employer to dismiss the employee before enquiring into the circumstances in which the conduct took place. Our advice is therefore to ignore this procedure entirely – as such circumstances are so rare as to make this procedure almost superfluous.

The second area of change is associated with grievances – where a new statutory grievance procedure is being introduced. This must be applied in relation to any grievance raised by an employee about any action by the employer that could form the basis of a tribunal claim.

This could be where an employee wishes to complain about the actions or omissions of other employees (e.g. bullying or harassment claims). It could also be used, for example, to complain about an investigatory suspension, or actions which employees believe could lead to a constructive dismissal claim.

Employers are required to apply a new three step grievance procedure in all cases where an employee is still employed by the organisation. In addition, a totally new provision applies to employees who have already left your employment. If they wish to raise a grievance and then possibly claim constructive dismissal or harassment they will be submitting a grievance (possibly written by their solicitor). Employers must also follow a new grievance procedure for ex-employees.

Two grievance procedures apply, but in this case both may realistically occur. The Standard Procedure almost mirrors the Standard Disciplinary Procedure, but in this case it is the employee who initiates the process.

The Modified Grievance Procedure will apply when the employee has already left your employment, but then raises a grievance. This must be raised, in writing and sent to the employer. The employer must then respond in writing within a fixed period. There is no appeal.

Employees are also able to benefit from an automatic extension of the time limit for the submission of tribunal claims, giving them up to 6 months rather than the current 3 month limit to enter their claim.

What do you need to do?

Your policies and practices should reflect the new requirements, but be aware – it’s not just your discipline and grievance policies, which are affected. It could be up to eight further policies that need revision. In addition, you need to communicate the changes to your employees.


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