Most businesses would agree that good employment relations help to reduce disputes, unnecessary employee turnover and absenteeism, so underpinning productivity. They can also help to build employee commitment and trust.
Inevitably there are times when employers and employees disagree and disputes arise. Handled properly these can be dealt with swiftly and within the workplace. In many cases that is what happens, but there is evidence that employees are increasingly resorting to employment tribunals to resolve conflict without having tried to fix them internally first.
Disputes at work are expensive, stressful and disruptive for all concerned. Recent research tells us three-quarters of employers worry about the financial implications of being taken to an employment tribunal and more than two-thirds are concerned about the damage it could do to their business reputation. In addition, 74% of managers admit they are worried about the effect a tribunal would have on their own stress levels.
On average, employment tribunals can cost a business up to £2,000, and this is quite apart from the additional cost of any award and the replacement of staff.
The introduction of the new dispute resolution legislation means that, from October, the law will require all businesses to have in place minimum dismissal, disciplinary and grievance procedures. This will offer guidance for employers and employees to attempt to resolve the problem directly with each other, through effective communication and partnership working.
It will also reduce the number of applications to tribunals, thus saving time and money for the employer, reducing the cost of running the employment tribunal system and ultimately offering savings to the taxpayer.
There are implications for all businesses. But with recent statistics from the DTI suggesting that accountants – together with solicitors, government departments and trade associations – are regarded by employers as one of the primary sources of information on employment relations, business advisers will play an important role in communicating this law to your clients. This could involve either disseminating information or being available to answer questions, to ensure your individual and corporate clients are aware of the new process.
Under the new legislation employers and employees must follow a simple three-stage process to ensure disputes are discussed within the workplace before further action is taken. Some businesses may already have this kind of process in place, but may not be using it.
Firstly, a letter should be submitted informing the employer or employee of the reasons behind the disciplinary action, dismissal or grievance.
Secondly, a face-to-face meeting between the parties should be arranged, allowing them time to consider the other’s complaint beforehand. After this, the employer must inform the employee of her decision, together with details of the employee’s right to appeal.
Lastly, if the situation has not been resolved, an appeal meeting is set up. In dismissal or disciplinary procedures, this can happen after sanctions have been imposed. In either procedure, the employer must inform the employee of the outcome of the appeal.
Provided the minimum standard is in place, firms are free to personalise the procedures to suit their own business needs.
However, if the grievance ends up at an employment tribunal and the minimum procedure has not been followed, penalties will be imposed.
Last year, tribunals dealt with 115,000 claims based on work disputes, ranging from problems over pay and conditions, to racial and sexual harassment.
Yet research shows that in more than a third of cases, the individual and the manager hadn’t discussed the problem at all.
Good dispute handling across all industries together with greater focus on conciliation ahead of litigation will enable employment tribunals to take their proper place as the backstop to enforce individual employment rights, rather than the first port of call.
The regulation should provide the opportunity for problems to be raised and discussed in the workplace, implying significant benefits to employers, employees and the taxpayer.
The DTI has produced tailored guidance to help employers and employees understand and follow these changes. The department worked closely with business and employee organisations to make sure the guidance was written in a user-friendly and accessible way.
Gerry Sutcliffe is minister for employment relations. Guidance is available from www.dti.gov.uk/resolvingdisputes,the Citizens Advice Bureau, or call the free Acas helpline on 0845 474747. WHAT YOU SHOULD KNOW ABOUT THE LEGISLATION
The new law for resolving disputes in the workplace comes into effect on 1 October.
It introduces new minimum procedures – a three-step process – for handling most dismissal, disciplinary and grievance issues. Of course the advice remains companies should try to sort their workplace problems out informally.
However, if that’s not enough to resolve them, the new procedures then kick in.
Bear in mind, if the new law makes it necessary for you to make changes to your current procedures for handling dismissal, disciplinary and grievance procedures at work, you are bound by law to inform your staff.
THE THREE-STEP PROCESS
Step one – put it in writing
If dismissal or disciplinary action is considered, an employer must put in writing why that action is being considered. Similarly, if an employee has a grievance, then you must put the reasons for your grievance in writing too.
Step two – meet and discuss
In either case, after allowing time to consider the issues raised, both must meet to discuss those issues. The employer must then inform you of their decision and of your right of appeal.
Step three – appeal (if required)
If the employee considers the grievance has not been satisfactorily resolved, he/she must inform the employer that he/she wishes to appeal.
After the meeting, the employer should communicate their decision to the employee, who should be accompanied by a colleague or trade official.
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