bulletin
No let up on redundancies
25 March 2009
As we move further into 2009, the Government’s initial strategy
to stimulate the economy is yet to show any signs of redressing the
balance. This year is likely to see an increase in the number of
redundancies across all sectors, with the public sector now also
being hit.
We have put together some general guidance on dealing with
redundancies. Click here to read our
guidance. Advice on specific individual cases should be sought
before taking any action and we would be happy to talk to you about
any of the issues raised in this bulletin.
However, it is not all bad news!
Discipline and grievances
To the absolute delight of employers and advisors alike, a
significant event will take place on 6 April 2009, namely the
repeal of the statutory dismissal and disciplinary procedures.
Features of the current regulations which have frustrated all
concerned include:
- A relentless rise in the overall number of claims (despite the
intention of the regulations to reduce claims), together with an
extraordinary amount of satellite litigation over the issue of what
a ‘grievance’ is
- The ‘one size fits all’ approach, setting out a mandatory
minimum standard to follow in all situations. The exemptions are
too limited to be meaningful. Failing to follow the stipulated
processes in dismissal cases gives rise to an automatic unfair
dismissal, together with an uplift of 10%-50% in compensation,
which has resulted in some unjust results for employers
- All other attempts at simplifying tribunal practice and
procedure by the regulations has in fact had the opposite effect,
making employment law unduly inflexible at times for both employers
and employees
What happens in April?
Essentially, the existing rules will be abolished. New rules
will be implemented in their place. But what are they?
First of all, the mantra of ‘three steps’ will no longer be
heard. Employers will no longer face automatic unfair dismissal
claims for not following the three step dismissals procedure.
Instead, the ACAS
Code of Practice has been revised, and it sets out the
principles of what is reasonable when dealing with dismissals and
grievances. It should be studied carefully. It is still currently
reproduced as a draft document, but this is the version which will
be implemented.
Grievance and dismissal procedures will still be as important as
ever, and good employment practice will still be expected.
Tribunals, however, instead of awarding the mandatory 10%-50%
increase in compensation for not following the ‘three steps’
procedures, will look instead at what procedure was adopted. If it
was reasonable, taking the ACAS guidance into account, an employer
is unlikely to face a successful unfair dismissal claim.
However, failing to study the code is dangerous. A tribunal will
be able to put awards up (or down) by up to 25% in the event of
inexcusable default on the part of the employer or the employee
when dismissing or raising a grievance.
In addition, employees will no longer have to raise a written
grievance (and thereby engage in arguments as to whether a
grievance has been raised in the first place!) before bringing an
employment tribunal claim. However, if they do not allow their
employer to deal with the grievance appropriately, and attempt to
resolve matters by having recourse to litigation, then they may
suffer reductions of up to 25% in their compensation, even if they
ultimately succeed in tribunal.
What happens in the run up to April?
Dismissal and grievance procedures take time, and many of them
will be ongoing, come 6 April 2009. There are therefore
‘transitional provisions’ which will apply.
Generally speaking, if an employer has started disciplinary or
dismissal action before 6 April 2009, then they will have to comply
with the protocol which is currently in force.
In cases where the action about which the employee has
complained, took place before 6 April 2009, and continues beyond
that date, the pre-6 April 2009 rules will apply, subject to final
‘cut off’ dates as below:
- Where the employee sends in a grievance or employment tribunal
claim on or before 4 July 2009, if it relates to claims with a
three month time limit (such as a discrimination or wages claim);
or
- On or before 4 October 2009 if it relates to a claim with a 6
month time limit (such as equal pay claims)
In all other cases, the new ACAS Code of Practice will be taken
into account, and the current rules will not apply.
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The content of this bulletin is provided for the purposes of
general interest and information. It contains only brief summaries
of aspects of the subject matter and does not provide comprehensive
statements of the law. It does not constitute legal advice and does
not provide a substitute for it.