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ACAS Fringe Meeting on Dispute Resolution at TUC Conference

Pat McFadden MP,  Minister for Business, Innovation and Skills
London,  10 September 2007

I want to thank ACAS for organising this meeting on dispute resolution. It could be said that this is a dry subject but it matters because it is about rights at work, about how those rights are accessed and also about the operation of the system in a way that is not over burdensome or costly.

(I have been working a lot on this in recent months. Dancing with social partners. Getting to know a person called Polkey and listening to a group called the band of reasonable responses, and all of it geared to producing, hopefully, a better system than the one we have now.)

I should say at the outset that having consulted on these issues I hope you understand that I can’t announce all our conclusions today but I do want to give you some idea about the problems we have looked at and the thinking behind our approach.

You could say that since the foundation of ACAS over thirty years ago there have been attempts to strike a balance between ensuring that people have access to the rights that Parliament has intended but also doing so in a way which is not overly legalistic and expensive – both for employees and employers.

We all have an interest in this because we all want to see workplaces which are successful, productive and harmonious. Disputes will always arise, but when they do, our view as a government is that they should be resolved as early on and as informally as possible. That was a key objective of the Dispute Resolution Review, which the Government launched last year.

History of the System

There’s nothing new about dispute resolution of course. Industrial tribunals (as they were known then) started life in 1964 hearing appeals against industrial training levies. Over the years their remit has expanded to take in the much wider body of employment rights which now exist in the workplace – many brought in since 1997.

From ACAS’s initial focus on collective disputes it has expanded and developed its role over the years and has moved much more into the field of individual disputes. Acas has a statutory remit to conciliate in individual disputes, and this has become an increasingly significant part of its work. Of the 160,000 employment tribunal claims lodged in 2004/05, 26% were settled by Acas, and a further 34% withdrawn mainly through their influence. This is a real benefit to all concerned.

Acas also has a key role in providing advice and guidance, not least in its statutory Codes. The first such Code on dismissal and discipline was published in 1977, and it has of course developed over the years to cover grievances and other areas.

As I said, a key theme over the years has been the attempt to strike the right balance between:

• the ability of workers to protect their rights in the tribunals on the one hand;
• and the benefit to all concerned of resolving disputes early, in the workplace and without undue complexity on the other.

We have not always got it quite right but the intention of the Dispute Resolution Review is to learn from experience and to get the right balance this time.

The Government’s Routes to Resolution consultation in 2001 made a commitment to build on the principles in the Acas Code by introducing minimum standards for resolving workplace disputes. This led to the 2004 statutory “three step procedures”.

These were widely supported on their introduction and the Gibbons Review found that their intention had been good and indeed that they had produced some benefits such as encouraging some businesses to think about dispute resolution where there may have been little thought or planning before.

However it also became clear that they had downsides too and were causing problems in some areas. Specifically the procedures were tending to lead to disputes becoming formalised – and lawyers becoming involved – at an early stage.

Michael Gibbons Review

So Alistair Darling, as Secretary of State for Trade and Industry, appointed Michael Gibbons as independent reviewer. Michael met all the key players and wrote a wide-ranging report on the whole system of dispute resolution in Great Britain.

His key conclusions were:

• firstly that the statutory dispute procedures had brought benefits – in particular by laying down clearly the steps to be followed when a dispute arises. But this came at a high price: it forced people to apply complicated rules, with stiff penalties if they got it wrong;
• The one size fits all approach did not fit the circumstances of all companies, specifically all sizes of company and the emphasis on the written approach sometimes formalised disputes early on rather than leading to their resolution.
• he did not think that the system put enough emphasis on early dispute resolution and alternatives to tribunals. Acas is highly-regarded, but some of its services could be better targeted and resourced;
• and also, he concluded that employment tribunals themselves are too costly and complex for users, could target their resources better, and need to be more consistent.

Government Consultation

Michael’s report was published in March this year and alongside it we issued a consultation document on how to take his proposals forward.

We carried out an active consultation with events around the country to establish a real exchange with practitioners on the ground. I’m very grateful for the help we received from Acas, the TUC and other organisations, in setting up a number of those meetings, and for their invaluable contributions.

The consultation sought views on the repeal of the statutory dispute procedures. But also – crucially – it asked about measures to maintain good practice in workplace disputes if the statutory procedures were
repealed. It sought views on enhanced guidance, and on incentives to ensure people follow that guidance.

The consultation also asked for views on ways to improve the early resolution of disputes beyond the workplace, such as:

• introducing a new advice service on dispute resolution
• developing a “fast-track” for simple monetary claims, without the need for a hearing;
• providing more Acas conciliation before a claim is made;
• and removing the fixed periods for Acas conciliation once the claim has been put in.

Lastly, the consultation sought views on various ways of improving users’ experience of tribunals, including:

• simplifying employment tribunal forms; and
• improvements to tribunal procedures and case management.

The consultation closed on 20 June. Over 400 responses were received, and these are being fully analysed before the Government takes final decisions on the way forward. You’ll understand that I can’t pre-empt those conclusions today, but I hope to be able to announce them in the next couple of months.

Conclusion

What I can say today is that any changes we introduce will learn from the past. I’ve heard it said that the statutory procedures may have had negative effects, but that the principle behind them, of having clarity about the steps to be followed to resolve disputes, was absolutely right - I agree with this.

I also agree with the message we’ve heard from many quarters that any additional role for Acas in a reformed system will need to be funded, (and no doubt we will have some interesting discussions with ACAS on this issue).

The Prime Minister has announced that there is likely to be an Employment Simplification Bill in the legislative programme for the next session of parliament. I look forward to announcing a package of measures, legislative and non-legislative, drawing on Michael Gibbons’ review and the response to the consultation.

Those measures will be designed:

• to ensure access to justice;
• to build on the reputation and strengths of Acas;
• to get value for money from the system we operate and not make it overly costly for those involved;
• and to create a better climate for resolving workplaces disputes quickly and effectively.

I look forward to the continuing support of Acas, the TUC and its member unions, employer bodies, CIPD and others in developing these proposals and hopefully producing a system which better meets that balance that I mentioned earlier which has been a central part of ACAS’s work and a central aim of the dispute resolution system in this country.