Dispute resolution: ACAS's role
This week Rachael Wright, associate at Osborne Clarke, considers the role that ACAS plays in settling workplace disputes.
Last week's article looked at how parties can settle employment disputes using compromise agreements. We now look at the role of the Advisory, Conciliation and Arbitration Service (ACAS) in the settlement of employment disputes.
ACAS is a statutory body set up on 1 January 1976 and funded through the Department of Trade and Industry. Its functions and duties include:
providing conciliation officers to conciliate in complaints made by individuals;
advising employers, workers, unions and businesses on employment-related matters;
drafting Codes of Practice relating to good employment practice; and
arranging independent arbitration and mediation.
ACAS's over-arching duty is to promote the improvement of employment relations in Great Britain by promoting equality and good relations between different racial groups and eliminating discrimination.
To achieve these objectives, ACAS offers:
dispute resolution;
tailor-made workplace training sessions;
e-learning programmes;
a website containing useful information;
a helpline; and
an extensive range of publications on employment relations issues.
According to ACAS Resource Accounts 2003/2004, 797,000 calls were handled by ACAS's nationwide network of telephone helplines during 2003/2004. In the same period it dealt with 1245 industrial disputes, while 105,000 new employment tribunal applications were handled by its individual conciliators, who achieved a 70% clearance rate of cases that did not proceed to a full hearing.
How does ACAS help to resolve disputes?
Where a dispute cannot be resolved informally and a claimant has presented a claim to an employment tribunal, the Secretary of the Tribunals is under a duty to send copies of all documents to an ACAS conciliation officer. The conciliation officer's duties are to try to promote a settlement between the parties and, if a settlement is reached, to ensure that both parties understand its effect. On a practical level, conciliation officers should be involved in promoting a settlement, rather than merely approving an agreement already reached between the parties. Interestingly, however, there is no obligation placed on a conciliation officer to ensure that such a settlement is fair.
Once a settlement is reached, it will usually take the form of a written agreement between the parties, in the form of a COT3 agreement. A COT3 agreement is similar to a compromise agreement in that it will usually address issues such as payment provisions for the compensation payment due on the termination of employment, tax considerations in relation to such a payment, and confidentiality restrictions. In practice, however, COT3 agreements are usually briefer than compromise agreements.
Once the COT3 agreement has been signed by both parties, it needs to be registered by the conciliation officer with the employment tribunal. This has the effect of withdrawing the claimant's claim.
Fixed periods for ACAS conciliation
Historically, ACAS conciliation officers have been able to settle disputes right up to the day of the trial. However, on 1 October 2004, the Government introduced fixed periods of time for ACAS conciliation for certain types of claim. This is to encourage the early resolution of disputes and to reduce the number of cases reaching a tribunal hearing.
There are three categories of claims:
Cases where no fixed period of conciliation applies. This covers discrimination, equal pay and whistleblowing claims.
A seven-week fixed period (the short conciliation period). This covers 'fast track' jurisdictions, namely unauthorised deduction of wages, breach of contract, redundancy payments, unpaid guarantee pay and unpaid medical suspension pay. These seven-week fixed periods are generally non-negotiable and it is only when a settlement is regarded as very likely that there will be some limited discretion for the period to be extended by up to two weeks. Claims will be listed for hearing only once there has been a notification submitted by ACAS that the period for conciliation has ended, or that it is clear that a settlement is not possible.
A thirteen-week fixed period (the standard conciliation period). This applies to all other claims.
As, before the new rules were introduced, most cases settled close to the date of the tribunal hearing, these fixed periods for conciliation are intended to put pressure on both parties to resolve their dispute at an early stage. As a result there is concern that ACAS's unavailability after an initial period of time will mean that fewer cases will settle. Clearly, it is too early in the day to evaluate the practical effect of these new fixed periods of conciliation, but no doubt the issue will be revisited in due course.
ACAS arbitration scheme
In May 2001, ACAS introduced a new arbitration scheme as an alternative to the employment tribunal process, designed to be confidential, informal, flexible, non-legalistic, cost effective and speedy. The scheme initially covered only cases of unfair dismissal relating to conduct or capability, but was extended more recently to complaints in relation to the right to request flexible working.
The scheme is voluntary and if it is used the parties must enter into an arbitration agreement setting out the terms of the process. In entering into the scheme, the parties must accept that the arbitrator's decision is final and binding and that the claimant can no longer pursue his or her claim in an employment tribunal.
An arbitrator's decision cannot be made on written evidence alone, so a hearing will always be necessary. Documents can be exchanged prior to the hearing and witnesses may be called, although the arbitrator cannot order anyone to attend the hearing. The arbitrator must take account of each party's submissions, and have regard to general principles of fairness and good conduct in employment relations when making his or her award.
Notably, the arbitrator has similar powers to an employment tribunal when deciding how much compensation to award, and the award can be enforced in the civil courts.
It is not possible to appeal against the arbitrator's decision, except in relation to the validity of the arbitration agreement or the appointment of the arbitrator.
Although the ACAS scheme was introduced over three years ago, its uptake has been well below that which was expected. Perhaps the introduction of the ACAS fixed conciliation periods will encourage more people to consider it as an option.
Next week's article will take the form of a case study demonstrating settlement through a compromise agreement.
Rachael Wright is an associate at Osborne Clarke (Rachael.Wright@osborneclarke.com)
Further information on Osborne Clarke can be accessed at www.osborneclarke.com
