As we covered in our blog last week, on Tuesday 6th May, the latest attempt to reduce the number of claims that proceed to the employment tribunal through promoting early resolution came into force. The introduction of the ACAS Early Conciliation (EC) scheme now means that it is mandatory (the scheme operated on a voluntary basis from 6th April) for any claimant who wishes to pursue a claim before the employment tribunal to first contact ACAS, who will then have an obligation to explore the possibility of settling the claim.
The rationale behind the scheme is that if claimants are required to make efforts to try and resolve their claim in the first instance, then this will reduce costs for businesses and the court and tribunal system. While that is to be welcomed, the way in which the scheme will operate in practice means that there are potential barriers to achieving that outcome.
The main points that are likely to be of most interest to employers are:
1. The EC process will apply to all ET claims being lodged on or after 6th May, no matter when the events giving rise to the claim(s) occurred.
2. There is no prescribed or detailed process that needs to be followed. Once EC commences, this will proceed in the usual way of any efforts on ACAS’s part to conciliate in a dispute, whether (presently) this arises once a claim has been raised or under pre-claim conciliation.
3. If a claimant does not register for EC then any subsequent employment tribunal application will be rejected by the tribunal. There are only minor exceptions to the need to go through the EC process which will not apply in 99.9% of disputes. At the end of the EC process (where settlement has not been achieved), the Conciliation Officer dealing with matters will issue an EC Certificate to the Claimant which contains a unique reference number. It will be mandatory for an ET1 tribunal application to include this reference number, failing which the tribunal application will be rejected.
4. It is open to a respondent to request EC from ACAS.
5. As at present, parties can nominate their solicitor to deal with EC negotiations on their behalf.
6. While registering for the EC scheme is mandatory, perhaps surprisingly, there is absolutely no positive requirement on parties to engage in meaningful settlement discussions. Upon receipt of the EC form, ACAS will contact the claimant to ask if they wish to explore settlement. It is open to the claimant to state they do not wish to try and conciliate on their claim and, where this happens, ACAS will automatically proceed to issue the EC certificate. If a claimant confirms they do wish to try and settle the claim, the named respondent is equally at liberty not to participate in any negotiations and can simply state that they have no interest in settling matters. This will lead to the Conciliation Officer issuing the EC Certificate to the Claimant.
7. If the ACAS Conciliation Officer is unable to contact either claimant or respondent, they must conclude that EC will not be possible and the EC certificate will be issued to the Claimant. How far the Conciliation Officer is required to go to make contact is not set down and will inevitably be dependent on the individual officer’s efforts.
8. Another surprising aspect of EC is that, when submitting the originating form, the claimant does not need to provide any details of the claim(s) they intend to pursue. This is a deliberate omission on the Department of BIS’s part as they felt having a claimant include such detail may lead to satellite litigation on the issue of whether the EC process dealt with the same substantive claims subsequently raised before the employment tribunal. Details of particular complaints will require to be provided to the Conciliation Officer later in the EC process. Whether such preliminary issues will still arise where a claimant does introduce a complaint not specifically raised as part of the EC process will remain to be seen.
9. Claimants will need to submit an EC form in respect of each and every respondent they may wish to pursue before the employment tribunal; it is not enough to simply submit a form for EC against the “lead respondent”. A failure to do submit a form for each respondent will result in the claimant being limited as to which respondents can be named in an ET claim.
10. Once the EC form has been submitted (and assuming parties wish to try and explore settlement), there will be a one month period in which to conclude the EC process. This period can be extended on one occasion only by 14 days if:
- Parties agree to the extension; and
- The Conciliation Officer believes there is a reasonable prospect of achieving settlement.
11. If EC succeeds, matters will be formalised by way of the usual ACAS COT3 agreement, setting out all settlement terms.
12. EC will fail (and the EC certificate will be issued) where:
- Either party cannot be contacted;
- Either party refuses to take part;
- The time period expires; or
- The Conciliation Officer decides it will not be possible to resolve the complaints in whole or in part. This is a point worthwhile noting. For example, if a claimant asserts they have claims for unfair dismissal and discrimination, and the respondent indicates that they are prepared to discuss settlement but only in respect of the unfair dismissal claim, the Conciliation Officer would be required to end the EC process as it will not be possible to resolve all complaints.
13. EC will have consequences for the applicable time limits for lodging claims:
- If a claim would already be out of time, EC cannot remedy this and provides no extension of time of itself.
- Once the EC form has been sent to ACAS, the clock on the applicable time limit will stop. The clock will recommence on the date the EC certificate is deemed to be received by the claimant.
- A clamant will have a minimum period of 1 month after the EC process to lodge a claim with the employment tribunal. If they had a longer period of time at the start of the EC process, then they will have that period after EC to lodge a claim.
Importantly, there will be no extension of time where EC takes place at the respondent’s request (albeit a claimant can still request EC after a respondent has done so to benefit from the time extension.
The time limit for lodging a claim will only be extended once: a claimant cannot re-register for EC to obtain a further extension.
ACAS have released statistics on the uptake of EC and its success during its voluntary operation in April. Over 4000 enquiries were made, with 98% of claimants agreeing to EC. However, whether the scheme produces resolution of claims is not yet clear and there are factors that may point away from claims settling on a regular basis.
Firstly, there is a tension between EC and the requirement introduced in July 2013 for claimants to have to pay a fee to be able to pursue a claim in the employment tribunal. Many employers may take the view that they will wait and see if the claimant will be prepared to pay the required fee and put matters before a tribunal before they elect to consider settlement.
Where parties do agree to participate in EC, there may be barriers to settlement being reached such as the claimant not being required to fully set out their claim, information not being available to allow the respondent to allow them to consider in detail the complaint made against them and respondents only offering low settlement sums on the basis of, again, tribunal fees having to be paid by the claimant if settlement is not achieved and a reliance on (n many cases) a claimant’s resources being stretched due to their being out of work.
However, there may be advantages to respondents in embracing EC. Resolving matters by way of EC would allow claims to be resolved without the need for employees to obtain independent legal advice (as is required for a binding settlement agreement) or without the need to make any contribution to the employee’s legal fees (again, a common term of a settlement agreement).
The success of EC will become clear in the coming months. It is to be hoped that, unlike the last measure intended to promote early conciliation, the dreaded Statutory Dispute Resolution Procedures, we do get more answers than questions under the new scheme.
As always, if any of the above raises any issues for you or your business, we would be happy to assist.
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