02 May 2014 #Employment
You have probably heard already that from 6 May 2014, conciliation via ACAS becomes mandatory for claimants wishing to bring employment tribunal claims. If so, you may have heard of the new rules being referred to as “mandatory conciliation” or “early mandatory conciliation”. As an employer, you may be wondering how a conciliation process can be mandatory. Mandatory for whom you may ask and also, what happens if you do not like what is being proposed in the conciliation process?
Mandatory early conciliation is not arbitration
Conciliation is only mandatory from 6 May 2014 to the extent that a claimant must inform ACAS of his or her intention to bring a claim in the employment tribunal, allowing ACAS then to have the opportunity to explore the possibility of conciliation before any claim is then filed with the employment tribunal. The new rule is that no claim (subject to a few minor exceptions) will be accepted by an employment tribunal without a certificate from ACAS confirming that the claimant has given notice of the claim to ACAS and that conciliation has at least been considered.
However, that is the extent of the claimant’s obligation. The claimant does not have to attempt conciliation if he or she does not wish to. The new rules provide no powers upon ACAS to impose conciliation on a claimant or, having agreed to conciliation, any form of settlement, as may happen in an arbitration. The claimant may bring the conciliation to an end at any time, allowing the employment tribunal proceedings to get underway. The “mandatory” tag has only arisen because even under the old rules it was possible to opt for ACAS pre- claim conciliation. However, that was an entirely voluntary scheme which, although apparently recommended by those employers who used it, was only used in a small number of cases. Hence, early conciliation is not new, only the fact that it is “mandatory”.
As the employer, do I have to go to ACAS?
If the prospective claimant agrees to conciliation, ACAS will then contact the employer. As with the claimant, the employer only has to take part in the conciliation if he wishes to. If the employer agrees to conciliation, the conciliator will have a month to attempt to resolve the dispute (with the discretion to extend this for a further 14 days if the parties agree). However, if the ACAS conciliator concludes that it will not be possible to reach a settlement, he or she may bring the conciliation to an end and issue an early conciliation certificate.
The early conciliation process involves a "stop the clock" mechanism whereby the time limit for instituting tribunal proceedings is stayed by up to a month, and possibly an additional 14 days, in order to allow early conciliation to run its course. If a settlement is achieved, ACAS will record the terms of the settlement in a COT3 agreement.
If you refuse to agree to early conciliation, then the ACAS conciliator would issue an early conciliation certificate at that point, allowing the claimant to issue a tribunal claim, which you will then need to respond to and defend.
What happens if I say no to early conciliation?
There are no costs or other penalties for either party in refusing to agree to early conciliation. However, the usual employment rules on costs will apply if a claimant or employer proceed with bringing or defending claim without any reasonable prospect of a successful outcome. Hence, a refusal to take part in early conciliation in such circumstances would form part of the background evidence of unreasonable conduct of the proceedings and which could lead to a costs order being made by the employment tribunal.
If I say yes to conciliation, will I still have to go to an employment tribunal?
There is no guarantee of settlement in agreeing to early conciliation. The aim of the process is to concentrate the minds of the parties on achieving a settlement before proceedings are issued, rather than afterwards. However, if settlement is not reached within the one month conciliation period (or a further maximum two week period), then the chances are that a tribunal claim will have to be issued by the claimant, if he or she remains aggrieved. However, there is still always the prospect of further conciliation after the claim has been issued, as at present. It is not the case that employers have to chose between early conciliation or tribunal proceedings. In practice, many cases may be resolved following conciliation both pre and post issuing of a claim, or purely post issuing of a claim, as at present.
What about our dispute resolution procedures? Do we need to change them?
The new rules do not require claimants to exhaust internal grievance processes before notifying ACAS of a claim to then set the ball rolling in terms of employment tribunal proceedings. Equally, it is not possible for your internal procedures to prohibit early conciliation until such procedures have been completed. Hence, there is every chance that an employee may seek to commence early conciliation whilst there are still ongoing internal grievance of disciplinary processes.
It is open to employers to refuse to agree to conciliation until an internal grievance process has been completed. That may be the best way for an employer to proceed and employers should consider amending their grievance procedures, including collective disputes procedures to reserve the right to refuse to take part in conciliation until the procedure has been allowed to take its course. Collective grievance procedures frequently already build in ACAS conciliation into the procedure. Such an amendment could deter a claimant from seeking to embark upon conciliation too early.
Once early conciliation has commenced, the clock stops running on tribunal time limits during the conciliation period for up to a month (subject to a further two week extension) so that does afford a period of time in which to allow internal procedures to be completed. If the conciliation goes on for the maximum period that should allow the parties to build in early conciliation into the grievance process. If the conciliation period gets timed out, when the time limit clock starts to run again, if the normal limitation period ends within a period of one month after the date of the early conciliation certificate (or it has expired already) , there is a minimum period of one month from the date of the certificate for the claimant to put in his claim, thereby extending the time limit.
So, even if a claimant has left it to late in the day to commence early conciliation i.e. just before the normal limitation period, there should still be some time for internal procedures to be completed, if the parties are willing to keep the conciliation going for the maximum duration.
Am I better off just going to tribunal or waiting to see if a claim is brought?
Where a claimant wants early conciliation, there are tactical considerations for the employer to consider in deciding whether to agree to the conciliation. Simply because early conciliation is requested by a claimant or, does not mean that the claimant will definitely bring a claim. The claimant may not have any intention of actually bringing a claim but rather he or she may be seeking to put pressure on the employer in relation to a grievance. Now claimants are required to pay fees to bring tribunal claims, the employer could take the view that early conciliation is not worthwhile and wait, before considering conciliation, to see if the claimant is prepared to pay the fee and actually bring the claim.
Alternatively, early conciliation does afford the employer the opportunity to seek to resolve a dispute at an early stage before positions become entrenched in tribunal proceedings. It may prove particularly useful where the employer is carrying out a difficult dismissal, perhaps where agreement as to severance terms under settlement agreement cannot be reached.
Much will depend upon the employer’s assessment of the strength of the employee’s case and the likelihood of a claim being brought. Again, if the employee has left it quite late in the day to contact ACAS, with the time limit fast approaching, the employer could decide to refuse to take part in the conciliation, giving the claimant no further time to resolve matters and leaving him or her with the stark choice of paying the tribunal fee or abandoning their claim.
There may also be issues as to whether a claim is out of time in any event. It should be noted that all relevant claims must go via the ACAS early conciliation route, including those that may already be out of time.
Is early conciliation is free?
Yes. It seems likely that claimants, if advised well, will want to take maximum advantage of early conciliation which is a free, impartial service. It is also very informal. The evidence is that the new fee system is deterring many claimants. Hence, early conciliation may be the best way to seek to put pressure on their employer. However, if a claim is poorly put, it may incline the employer not to take the threat of tribunal proceedings seriously and refuse to take part in conciliation.
“I just don’t understand what his problem is!” Can I ask for more information?
The difficulty in resolving many disputes is understanding the nature of the employee’s grievance in the first place. There is no requirement under early conciliation to provide details of the claim. Often, claimants are not able to explain well what their complaint is or what exactly it is that they want out of their grievance in practical terms. That was a frequent complaint about claimants’ use of the tribunal system, certainly before the introduction of fees. The early conciliation process may therefore prove to be a useful way of “cutting to the chase” with the help of an ACAS conciliation officer.
As with tribunal claims, employers should press claimants for full details of their claim in agreeing to conciliation, including a schedule of loss and evidence of mitigation of loss.
Exactly who should ACAS speak to?
ACAS will only make contact with the respondent nominated by the claimant. This could lead to difficulty where claimants name their individual colleagues or managers as respondents. Moreover, given the difficult issues that arise in relation to whether the employer should agree to conciliation and on what terms, it is important that the appropriate senior managers and HR are promptly made aware of the conciliation request and assess the merits of the case. There is a risk that staff who are named as potential respondents engage in negotiations without being aware of the wider consequences. The employer should therefore have a clear policy on dealing with early conciliation requests.
What if there are other companies or claimants involved?
Potential claimants must commence early conciliation separately in respect of each potential respondent. This raises issues as to management of the conciliation process, especially if there are multiple respondents all dealing with ACAS separately, or where some agree to conciliate but others do not, or where some agree to settle but others do not. There may also be issues as to different limitation periods applying to different respondents, depending on when early conciliation certificates were issued.
Only one prospective claimant needs to commence early conciliation where there are multiple claimants in relation to the same claim which arises out of the same set of facts. This could lead to arguments at a preliminary stage about whether the claims do in fact relate to the same dispute.
There may also be issues as to whether the respondents named in the early conciliation certificate are the same as the ones named in any subsequent tribunal claim.
How do I stop the claimant bringing another claim?
As with any claim, you should be very careful about reaching a settlement unless you able to settle all potential claims. ACAS can put settlement terms together for you but settling all potential claims against the employer is not their concern, they are only concerned with the claim in hand. Tricky issues can arise as to the drafting of the settlement terms. Hence, you should take legal advice, especially where the settlement is high value.