Early conciliation of Employment Tribunal claims: an Employer's winning streak? - Goldenleaver
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The Government appears to be succeeding in its aim of unclogging the Employment Tribunal system and converting its activities from sclerotic to superfast.  Many people think that it is doing so by promoting targets at the expense of justice (an old fashioned, but still important concept).  Whether this will actually be so will take a while to come out in the wash.  In the meantime, the hurdles for Claimants have become higher and the consequences for Respondent employers easier to avoid.

Take one example:  from 29 July 2013 the Government has required a party (usually the Claimant, rather than the Respondent) to pay a fee of between £160 and £250 before starting an Employment Tribunal claim, plus a further fee of between £230 and £950 before certain types of hearing can go ahead.  These fees are greater when there is more than one Claimant.  This has had the effect, possibly singlehandedly, of reducing by 79% the number of new claims presented to the Employment Tribunals during the last 3 months of 2013.  Unless that reduction in the number of claims goes hand in hand with a comparable reduction in the public funding of Employment Tribunals, everyone should look forward to a better and quicker service from the Tribunal clerks and judges.

Take another example:  from April 2014, Employment Tribunals can impose costs sanctions against an employer Respondent who has acted unreasonably.  But the maximum award is £5,000 and that penalty goes into the Government’s coffers, not the Claimant’s pocket, so doesn’t encourage genuine claims to be brought and continued unless there is an insurer backing them in the  first place; and it isn’t a big disincentive for employers who want to see a Claimant put their money on the table.

And now:  from 6 May 2014 the Government will require Claimants to notify ACAS before even starting an Employment Tribunal claim.  The process is known as Early Conciliation (or “EC”).  As this comes hot on the heels of the introduction of fees, many employers are thinking:  “it gets better and better”.  The objective is to use the services of ACAS to try to resolve a potential claim without converting it into an actual Employment Tribunal claim; and to settle it more quickly with an ACAS COT3 form (which is binding and does not require independent legal advice to be given to the employee, so does not involve an employer paying for that advice).  And unless ACAS issues an EC Certificate (which will be along the lines of “we tried, but failed” and states why, with details of the participants and relevant dates for limitation period calculation purposes), a claim can’t go ahead.

At one level, it’s correct for employers to feel relieved that steps have been taken to minimise the considerable number of “mischief” claims that had little merit, but which clogged up the Employment Tribunal system.  But there are several stings in the tail.

One sting is that, whereas employers were able to be sanguine about assuming that nothing would come of any dismissal that had taken place more than 3 months ago (because that was – and is – the normal time limit period for bringing claims) they cannot do so any longer.  In fact the time for breathing a sigh of relief (and transferring a potentially large sum of money back from a contingency budget to general budget) is potentially much longer; and also means that some operational decisions – such as recruiting a replacement member of staff, or reorganising a department – must be postponed.  Why?  The reason is that EC stops the clock for time limit purposes.  In other words, the normal 3 month time limit gets frozen while conciliation is considered.  But for how long?

  • initially for 1 month (to let conciliation happen); then
  • by up to a further 14 days (if both sides consent and ACAS thinks there is a reasonable prospect of doing a deal); and
  • (if conciliation fails) by the actual number of days take up by conciliation (if the 3 month time limit hasn’t yet been reached when this happens); or
  • (if conciliation fails) by up to a further 1 month from the date of the EC Certificate (if the 3 month time limit would have expired during the conciliation period).

From this it’s clear that there is no advantage to a Claimant in starting EC early.  And from an employer’s perspective, this has the potential to (almost) double the time when employers have to remain engaged in trying to settle a dispute.  This is likely to be niggling, even though it may cost less than having to respond to an Employment Tribunal claim which, these days, is often “front-loaded” (and causes more up-front time and expenses to be incurred) by making parties prepare their positions in a way that a judge regards as appropriate for the Employment Tribunals Service (but which isn’t necessarily the same as what is strategic and convenient for Respondents).

The second sting is that employers will have to develop their conciliation skills or engage third parties to do so on their behalf.  It’s a myth that conciliations are easy and that Employment Tribunals claims are relatively straightforward.  The reason is that Employment Tribunals have rules that are known to lawyers and many HR professionals; whereas conciliations are less prescribed and involve a change of mind-set:  instead of fighting their respective corners, the parties have to concede that there is, perhaps, a way of looking at things other than than their own.  It will be interesting to see how this develops – while official data are not yet available, several enquiries about voluntary EC notifications have been made since it went live on 6 April 2014 (it doesn’t become compulsory until 7 May 2014).

As to the mechanics of EC, they’re by no means straightforward, but will operate broadly like this:

  1. Claimant phones ACAS, who complete a prescribed Form; or Claimant emails or posts the Form to ACAS, who check it contains the relevant information and may then either reject it for not being properly completed, or contact the Claimant in order to complete it properly.  The Form requires contact details and dates of employment and is at https://ec.acas.org.uk/Submission/Create
  2. Completed Form is passed to the EC Support Officer (the “ECSO” – a new acronym for those who like such things), who makes reasonable attempts to contact the Claimant.
  3. If the ECSO fails to contact the Claimant, the ECSO must conclude that settlement isn’t possible and issue an EC Certificate.  This will be sent to the Claimant, who may then bring a formal claim in the Employment Tribunals.
  4. If the ECSO does contact the Claimant and the Claimant does not wish to conciliate, the ECSO must conclude that settlement isn’t possible and issue an EC Certificate (see item 3).  But if the Claimant does wish to conciliate, the ECSO passes the file to a Conciliation Officer, who checks that the Claimant does wish to conciliate and is happy that ACAS contacts the Respondent.
  5. If the Conciliator fails to contact the Respondent, the Conciliator must conclude that settlement isn’t possible and issue an EC Certificate.  Not being able to contact the appropriate person is a risk, but ACAS now has a National Contacts List of nominated persons and employers can volunteer to be included on this by emailing ACAS at ECcontactslist@acas.org.uk.
  6. If the Conciliator does contact the Respondent and the Respondent does not wish to conciliate, the Conciliator must conclude that settlement isn’t possible and issue an EC Certificate.  But if the Respondent does wish to conciliate, there will be a period of conciliation for settlement purposes.
  7. If EC succeeds, there will be a COT3 agreement and no Employment Tribunal claim is necessary.
  8. If EC fails, ACAS will issue an EC Certificate and the Claimant can then bring a claim in the Employment Tribunals (stating the Certificate number on the Claim Form).

You will see that this process will involve at least 3 ACAS personnel, which is a nice job creation scheme and has the potential for a request to fall between several stools.  There’s also some doubt (given our experience of the lack of speed with which some ACAS officers have handled matters in the past) about how long will it take for an ECSO or a Conciliation Officer to contact a party, because although this is expected to be within 2 working days, nobody knows how this will work in practice.

On the other hand, there is a potential silver lining, given that Respondents can also use this system to their own advantage, because a Respondent can apply for EC as well, which will not extend the 3 month time limit during which a Claimant must bring a claim.  This may wrong-foot a Claimant who fails to notice this, who (if the normal 3 month time limit has passed without a deal having struck) will then have to fall back on old case law that determines whether they can still go ahead by reference to whether it was reasonably practicable to have done so during the 3 month time limit and/or whether it would be just and equitable to extend that limit anyway.

By the way:  the voluntary Pre-Claim Conciliation that had been available from 2009 ceased to be available as at 6 April 2014.

Welcome to the new world of conciliating, facilitating, mediating and other dialogue-focused employee relations.  Of course we’re here already, so can help you.  Happy conciliating!

Wyn Lewis