For T.S Eliot, April was the cruellest month. For employment lawyers it can be the busiest because of the plethora of new legislation and statutory instruments being introduced. This year is no different and today sees The Employment Act 2008 come into force, replacing the discredited Employment Act 2002 (Dispute Resolution) Regulations 2004. In The Wasteland, TS Eliot wrote “what are the roots that clutch, what branches grow out of this stony rubbish?”. Admittedly Eliot was talking about the human condition and the moral and spiritual bankruptcy of modern society, rather than the 2004 regulations, but there is even so great resonance in those words for employment lawyers. Few people have had anything good to say about the rules and today they are abolished, replaced by a set of rules that are much less rigid but will give rise to other problems in the future.
The main change in the new regulations is that an ACAS Code of Practice has been introduced and it has statutory force. It is brief, only ten pages long, but it sweeps the old system aside. The Code is supplemented by an ACAS Guidance booklet of approximately 80 pages long and which is advisory rather than legally binding. The main changes are these;
1. It replaces the old system of extensions of time for issuing proceedings if disciplinary processes are still ongoing, or where a grievance has been raised. There is no longer a 28 day stay on proceedings before an ET being issued after the grievance has been raised. Now ET proceedings can be issued even if a grievance hasn’t been issued.
2. There will no longer be an automatically unfair dismissal where there has been a failure (any failure) to follow the rules. There will be no consequential 10 – 50% increase/decrease in the amount of compensation following failure by one party to abide by the rules. Instead an ET will have a discretion, where it is just and equitable to do so, to increase/reduce an award of compensation by up to 25% where (1) a relevant code of practice applies, and (2) there was a failure to follow the code and (3) that failure was unreasonable. In my view although this is more flexible than the old rules, it will lead to uncertainty because different ETs will take different views on what constitutes an unreasonable failure.
3. The “modified” procedures in both disciplinary and grievance procedures is swept away, meaning there is no duty on an employer to hold these procedures for ex-employees. This is welcome.
4. The new rules do not apply to redundancy processes and it is debatable whether they apply to ill-health/incapacity dismissals. Also they don’t apply to dismissals upon expiry of fixed term contracts. In my view ETs will probably look to the Code of Practice when considering the fairness of the procedure used by employers in these situations, so it would be a rash employer that decided to ignore them in redundancy/expiry of fixed term and ill health situations. In the case of collective redundancies (ie more than 20 persons selected in a three month period) employers are required to consult with employees anyway, but the issue may arise in small scale redundancies of less than 20 people.
In judging whether an employer has acted unreasonably, an ET will have regard to the size and resources of the employer. In other words, more will be expected of bigger employers than smaller outfits when considering if they have acted reasonably.
However, it is not goodbye to the old rules just yet. A complex system of transitional provisions exist and close regard has to be had to them when deciding whether the old rules apply at the moment, or the new. Basically, if the “trigger” event (being the disciplinary issue or grievance) occurred before the 6th April then the old rules will apply. If the trigger event occurs on or after the 6th then the new rules apply. Where matters get complicated is where (in grievance cases) the act complained of started before the 6th but continues after that date. If that situation applies to you, seek legal advice.
I’ll deal with more aspects of the new rules in later posts. In the meantime if you have any queries please do not hesitate to contact me on 0207 464 8433 or email at email@example.com
A slightly different version of this post will appear in the Docklands and Peninsula newspapers week commencing April 14th