Statutory dispute resolution procedures: the grievance procedures

Rachael Wright, of Osborne Clarke, analyses the new statutory grievance procedures, which come into effect on 1 October 2004.

Introduction

From 1 October 2004, all employers and employees will be required to follow new minimum grievance procedures.

These new grievance procedures - together with new disciplinary procedures (see last week's topic of the week article) - are coming into force in order to encourage parties to resolve disputes internally within the workplace, rather than in the employment tribunal. It is hoped that they will reduce the number of tribunal claims and save on litigation costs for all concerned.

The new procedures

There are two types of grievance procedure: the standard three-step one and a modified two-step one.

The standard grievance procedure should be used in most cases where an employee is aggrieved about action that the employer has taken, or not taken, or is contemplating taking, or not taking, in relation to him or her.

The modified procedure should be used where the employment has already ended and the parties have agreed in writing that it should apply. In addition, the employer must have been unaware of the grievance before the employment ceased, or aware of the grievance but in circumstances where the standard grievance procedure was not commenced or completed before the employment ended.

Neither grievance procedure need be followed where:

  • the grievance concerns a dismissal or contemplated dismissal;

  • to do so would be contrary to the interests of national security;

  • either party has reasonable grounds to believe that commencing or continuing the relevant procedure would result in a significant threat to him- or herself, his or her property, any other person, or the property of any other person;

  • harassment has occurred and either party has reasonable grounds to believe that commencing or continuing the relevant procedure would result in further harassment;

  • it is not practicable for the procedure to be commenced or continued within a reasonable period;

  • the employment has terminated, neither grievance procedure has been started and it is not reasonably practicable for the employee to send the employer a statement of grievance;

  • the grievance concerns action short of dismissal taken by reason of the employee's conduct or capability, unless the grievance concerns a warning or suspension on full pay, by reason of the employee's conduct or capability; or a claim that the action is or would be unlawful discrimination; or a claim that the actual grounds for the employer's actions are not the grounds cited by the employer.

    The standard procedure

    Standard (three-step) grievance procedure

    Step one: statement of grievance

    The employee must set out in writing the particulars of the grievance and send the statement or a copy of it to the employer.

    Step two: meeting

    The employer must invite the employee to attend a meeting to discuss the grievance, which the employee must take all reasonable steps to attend. By the time of the meeting the employer must have been informed of the basis for the grievance in the step-one statement and have had reasonable opportunity to consider its response. Following the meeting, the employer must give the employee its response to the grievance and notify him or her of the right of appeal.

    Step three: appeal

    If the employee wishes to appeal he or she must inform the employer. The employer must then invite the employee to attend a further meeting to determine the appeal, which the employee should take all reasonable steps to attend. After the appeal hearing the final decision must be communicated to the employee.

    The modified procedure

    Modified (two-step) grievance procedure

    Step one: statement of grievance

    The employee must set out in writing the particulars of the grievance and send the statement or a copy of it to the employer.

    Step two: response

    The employer must set out its response in writing and send the statement or a copy of it to the employee.

    All steps in the relevant procedure must be taken without unreasonable delay. The timing and location of meetings must be reasonable and they must be conducted to ensure a fair hearing to both parties. If he or she wishes, the employee can be accompanied to the meeting and/or the appeal by a colleague or a trade union representative.

    Circumstances in which the parties are treated as having complied with the procedures

    In some circumstances, the parties are treated as having complied with the grievance procedures, even where they have not. These situations include the following:

  • Where the employee follows a grievance procedure in a collective agreement.

  • Where a trade union representative or employee representative writes to the employer setting out the grievance and specifies in writing the names of at least two employees, of whom one is the employee with the grievance, as being the employees on behalf of whom he or she is raising the grievance.

  • Where the grievance is that disciplinary action short of dismissal is, or would be, unlawful discrimination or that the actual grounds for the employer's actions are not the grounds cited by the employer, and the employee sends a written statement of the grievance to the employer before any disciplinary appeal hearing takes place or employment tribunal claim is lodged.

  • Where the standard grievance procedure applies, an employee who is no longer employed has sent a written statement of the grievance and since the end of his or her employment it has ceased to be reasonably practicable for the parties to comply with the requirements in relation to the step-two meeting or the step-three appeal. If the parties have had a meeting to discuss the grievance the employer must still inform the employee of its response to the grievance or it will be treated as having failed to comply.

    Consequences of failure to follow the relevant grievance procedure

    There are two main consequences of failure to follow the relevant grievance procedure. The first concerns access to the employment tribunal and the second the level of any compensation that may be awarded.

    First consequence

    There is usually a three-month time limit from the date of the act complained of in which to submit an employment tribunal application. Where an employee has submitted a tribunal application without initiating the applicable grievance procedure (by sending a step-one statement) and waiting for 28 days, the tribunal will refuse to register the application. Instead, it will grant a three-month extension to the time limit in order to allow the parties to follow the grievance procedure. In such a case, the employee must send a step-one letter within 28 days.

    In instances where an employee has sent a step-one letter and then lodged a tribunal claim inside the three-month time limit, but without waiting 28 days for the employer's response, a three-month time extension will be given automatically.

    Second consequence

    Where the grievance procedure was not completed before the proceedings were initiated, due to the failure of the employer, the tribunal is obliged to increase any compensation that it awards by at least 10% and by up to 50%.

    Where the grievance procedure was not followed due to a failure on the part of the employee, the tribunal is obliged to reduce any award of compensation that it might make by at least 10% and by up to 50%.

    In exceptional cases, where it would be just and equitable, the reduction or increase in compensation may be less than 10%.

    Code of practice

    Employers should know that tribunals will pay close attention to the guidance set out in the revised ACAS Code of Practice on Disciplinary and Grievance Procedures (PDF format), which is currently set out in draft form on the ACAS website.

    Next week's article will consist of a case study on the new statutory procedures.

    Rachael Wright, senior associate at Osborne Clarke (rachaelwright@osborneclarke.com)

    Further information on Osborne Clarke can be accessed at www.osborneclarke.com