In 2014, the Enterprise and Regulatory Reform Act 2013 (ERRA 2013) introduces compulsory Early Conciliation (EC) to be conducted by Acas. Makbool Javaid, Partner at Simons, Muirhead & Burton, takes a look at how the new scheme will operate and considers a number of areas of concern.
Government’s intention in introducing the raft of new rules governing every aspect of Tribunal proceedings, including the EC process, has been to frontload the litigation process in an effort to reduce the number of claims early on and to reduce costs for employers. But what other consequences, intended or otherwise will this bring?
The new regime has to be viewed in the context of the Government’s objective to reduce the cost of operating the Employment Tribunal system, which has already seen the introduction of fees for Claimants, effective from 29 July this year. In addition, there have been changes to the rules governing the Tribunal process which require parties to set out their case clearly from the outset and which allow for issues to be dealt with at an early stage in proceedings. In respect to the EC process, there has already been debate about whether the changes will be successful in achieving timely settlement of disputes and whether Acas will be able to cope with a significantly increased workload.
One particular concern is the impact of the changes on union representation and what strategies unions may employ to cope with the pressures placed on them by the new provisions. From April 2014, anyone who wants to make a Tribunal claim will have to contact Acas first. In all but a very few types of claim, Claimants will not be able to issue in the Tribunal without having received an Acas Certificate which confirms compliance with the steps required under the EC process. Acas will take steps to resolve the dispute before a claim is submitted. The Employment Tribunals Act 1996 as amended by ERRA 2013, establishes the two-stage (four-step) procedure under which conciliation must take place.
Stage 1: Conducted by an Early Conciliation Support Officer (ECSO). Step 1: The Prospective Claimant must complete and submit a short form, the EC Form, to Acas, setting out basic details relating to them and their employer. There is no requirement to give details of the acts or incidents complained of. The matter will then be allocated to an ECSO. Step 2: The ECSO must make ‘initial contact’ with the Prospective Claimant and it is envisaged that this should take place by close of business on the day following receipt of the EC Form. This initial contact is to allow the ECSO to confirm details such as length of employment, incident(s) complained of, whether the Prospective Claimant wishes to proceed and whether they have legal representation. ECSOs must make ‘reasonable attempts’ to contact the Prospective Claimant and, only with their express consent, to then contact the Prospective Respondent. If the ECSO is unable to contact either the Prospective Claimant or Respondent after making reasonable attempts they may conclude that settlement is not possible. In these circumstances or if the Prospective Claimant does not want to participate in conciliation, a Certificate must be issued. The Prospective Claimant may then, using that Certificate, issue a claim in the Tribunal. If, having made initial contact, settlement is considered a possibility, the ECSO will forward the EC Form to a Conciliation Officer (CO).
Stage 2: Conducted by a Conciliation Officer. Step 3: The CO must try to promote a settlement and will have one calendar month to do so calculated from the date Acas received the completed EC Form. The conciliation period may be extended for up to two weeks where the CO considers that there is a reasonable prospect of achieving a settlement by the end of the extended period and if both parties agree to the extension. Step 4: If a settlement is not reached, either because the CO considers that settlement is not possible, or because the prescribed period expires, the CO must issue a Certificate to that effect. The Early Conciliation process is then concluded.
Submission of the EC Form will ‘stop the clock’ on the time period allowed for a Prospective Claimant to submit their claim. The limitation clock stops the day after the EC Form is submitted to Acas (Day A) and resumes the day after the day when the EC Certificate is deemed to be received by the Prospective Claimant (Day B). What amounts to ‘deemed received’ is set down in the Early Conciliation Regulations 2013. Time only starts to run again when the Certificate is issued. This means the time limit for most claims will be three months plus a further unfixed period which is linked to the EC process. The time limit extension provisions are complex, many would argue unnecessarily so, and will certainly hinder Claimants. Claimants are going to have to take special care to ensure that they do not let the limitation period expire without having issued a claim. Equally Respondents will want to check dates very carefully to ensure that claims have been issued in time. A useful rule of thumb is to remember that, no matter what, Claimants will have one month after Day B in which to issue their claim(s).
The Certificate is a crucial document for two key reasons. First, the Certificate is the key for the Claimant to unlock the door to further litigation. Without it, (most) claims cannot be issued and Claimants will need to include the Certificate number on the Claim Form; failing that it will be rejected. Second, the deemed receipt of the Certificate is the factor which will start the clock running again and therefore has a significant impact on the limitation period and its expiry date. Given there are so many variables as to how and when the Certificate is issued, this would appear to create fertile ground for disputes about issue and receipt of the Certificate and thus of course when the particular limitation period actually ended. It is not surprising that the proposals are being treated by those who work in the employment law field with some degree of wariness. Concerns include an increase in satellite litigation. Some readers will remember the last time Government intervention involved the promotion of alternative dispute resolution; it was not a success. The 2004 Dispute Resolution Regulations were intended to reduce Tribunal claims by bringing the focus of dispute resolution into the workplace.
Complex provisions extending time limits were introduced. The outcome was that there was a huge increase in Tribunal litigation mostly focussed on calculating time limits rather than the substantive issues. It appears likely that there will be similar litigation arising from the EC time limits as Respondents seek to argue claims are out of time, either because the Claimant has not referred to a particular issue in the conciliation process or simply because there has been a miscalculation of dates. Claimants in seeking to bring any late claims within the limitation period may raise issues about whether EC was in fact completed, whether ‘reasonable’ attempts were made by conciliators or whether the EC Form was received. So how compulsory is compulsory: the Claimant’s ‘day in court’? Whilst the requirement for Prospective Claimants to contact Acas before they bring Tribunal proceedings is mandatory, the decision whether to accept the offer of conciliation is voluntary. Acas must only make reasonable attempts to contact Prospective Claimants before issuing a Certificate. Even if contact is made, either party can decline to conciliate. For those who want their day in court, the requirement to participate in the EC process is unlikely to present a significant barrier. Concerns have been expressed about unnecessary paperwork and effectively the requirement to use two separate forms in the same set of proceedings, one to start the conciliation process and a second to start the Tribunal claim. This will give the unsophisticated Claimant room for confusion if they believe they have issued a claim at the EC stage. It has long been noted that whilst conciliation and mediation can be successfully utilised in commercial disputes, the same cannot be said for areas of law where emotions run high such as employment law. Alternative dispute resolution methods are known to work best when participation is consensual and therefore making participation compulsory could be counterintuitive. It is unclear how trade unions will adapt to the impact of the EC process. It has already been noted that following the introduction of Tribunal fees, unions are likely to be a lot more selective about which cases they support, which may be good news for employers. The imposition of fees may therefore lead to union representatives using the Acas EC process quite robustly, to press for a settlement in those cases which may not in fact be sufficiently meritorious to warrant continued union support including the payment of fees. The issue then becomes how far the union is prepared to support a claim, and unions will be thinking about EC is approached to ensure it is productive.
Strategies could include: During the initial EC process, focussing on setting out a compelling legal basis and detailed factual arguments as to merits. Whilst the intention may be to pressure employers to settle at an early stage, approaching the process in this way may be considered litigious and not consistent with attempts to conciliate. Using preliminary hearings to obtain early judgment in strong cases (by use of strike out applications). This will be attractive as there are no fees required for the conduct of preliminary hearings. Respondents must be wary and be sufficiently aware of the merits of their defence and the relevant issues so that they are ready to dispute where possible the use of a preliminary hearing to effectively try the case. If a strong case is not settled during EC, whilst there is no penalty for refusing to participate in the EC process, it is open to the successful party to seek costs and to strengthen their application by pointing to a failure by the other side to conciliate. Whilst both parties can benefit from this strategy, it is envisaged that unions will have a pressing need and may be quite aggressive in their attempts to recover their costs incurred in pursuing the case from the point at which the EC failed. We are yet to see what the impact of the introduction of fees will have on the number of claims. However it is clear that the EC process itself could in fact increase costs for employers.
