ADR in Employment Law

Stephen Hardy, Jerry Gibson, Chris Chapman

• Editorial: Routledge-Cavendish
• Año: 2013
• ISBN:
  9781135336011
• Edición: 1
• Categoría: Droit
• Categoría: Théorie et pratique du droit

The 1998 Employment Rights (Dispute Resolution) Act and the 2002 Employment Act seek to change the existing face of UK employment law dispute resolution. Conciliation via in-house disciplinary and appeal procedures must now be followed before resorting to a tribunal hearing. Alternatively, in dismissal cases, employers and employees can both agree to go to arbitration. This book will assist the parties involved to equip themselves with knowledge of these new procedures and processes.

CHAPTER 1
RESOLVING EMPLOYMENT DISPUTES AND ADR

Considering the 1889 Arbitration Act, Scrutton LJ commented that: ‘The courts do not allow the agreement of parties to oust the jurisdiction of the courts. Arbitrators, unless expressly authorised, have to apply the laws of England’¹ In 2001, the Advisory, Conciliation and Arbitration Service (Acas) scheme for unfair dismissal came into force across England and Wales,² despite delay caused by the need to consider the implications of the Human Rights Act 1998. Such an advent marks the arrival of alternative dispute resolution (ADR) in employment law. In attempting to explain the impact of ADR on employment law, and in order to identify some of the potential problems which arise when new policy conflicts with well-established practice and procedure, this text discusses the following points:

• the underlying policy aims of the government's new laws on dispute resolution;
• the Acas scheme for unfair dismissal;
• the employment tribunal reforms; and
• the impact of the Woolf civil justice rules in the movement towards encouraging ADR methods of working.³

This examination concentrates particularly on the impact of ADR upon current employment law practice, raising questions on human rights, the notion of ‘fairness’, the available remedies and the future of employment relations. With a review of this new ‘third way’ in employment dispute resolution, this text will draw some interim conclusions on the future of ADR in modern employment law.

1.1 THE BACKGROUND—THE CURRENT LEGAL FRAMEWORK

Both the Industrial Tribunals Act 1996 and the later Employment Rights (Dispute Resolution) Act (ER(DR) A) 1998 made several changes to employment tribunal procedure but, more significantly, the 1998 Act proposed a scheme for Acas arbitration of unfair dismissal claims. The origins of the legislation date back to the growing concern in the mid-1990s, on the part of the then Conservative government, that the delays caused by the dramatic increase in the caseload of industrial (now ‘employment’) tribunals and the growing complexity of the law meant that the original objectives of the tribunal system were no longer being met. Consequently, a Department of Employment (DE) Green Paper⁴ reviewed its operation and considered various options which would relieve pressure on the system, reduce the delays in cases being heard and contain demands on public expenditure.⁵ Some proposals, such as the introduction of a statutory requirement for employees to pursue grievances with their employer before a tribunal complaint could be made, were subsequently dropped. However, the suggested voluntary arbitration scheme as an alternative to a tribunal hearing has finally become a reality.

The need for an alternative to employment tribunals was, in fact, first considered by labour lawyers in the early 1980s.⁶ Since then, and due in part to the 1990s Woolf reforms, its impetus has gathered pace. For instance, Doyle attributes recent ADR developments, including the unfair dismissal arbitral route, to Lord Woolf's Civil Justice Review of 1996: ‘Lord Woolf envisaged a new landscape in civil justice, in which people will be encouraged to start court proceedings to resolve disputes only as a last resort, and after using more appropriate means when these are available.’⁷

With the Civil Justice Council devoting much of its discussion to ADR, such a view is reinforced by the Civil Procedure Rules 1998, which empower judges to order the parties to attempt mediation or another form of ADR, as well as by the Access to Justice Act 1999, which has placed a greater emphasis on ADR. The Labour government, having inherited a Conservative policy initiative, has given the green light for the new arbitration scheme to go ahead. Such a movement towards ADR was furthered by the provisions contained in the Employment Act (EA) 2002.

In 1999, the Lord Chancellor's Department (LCD) Discussion Paper on ADR⁸ set out 76 questions about ADR and inquired about what role the government should play in its development. A disappointing total of 133 responses was received, the majority being from lawyers and ADR practitioners. According to its post-consultation report (2000), the LCD remarked that ‘[the] proponents of ADR far outnumbered detractors’. However, most respondents commented that they did not class arbitration as a form of ADR, although 51% of the respondents had found benefits from using ADR, particularly in terms of time, cost, confidentiality/privacy and convenience. Nevertheless, some lawyer scepticism was noted, suggesting that ADR was amateurish and could be used as a ‘delaying tactic’. Above all, the report acknowledged that:

• arbitration was suitable in cases involving complex or technical issues;
• expert determination was deemed to be the most suitable ADR process to be applied in purely technical or complex disputes or, alternatively, where a speedy award is important;
• mediation suited cases where a significant element is the claimant's sense of grievance and the feeling that the other side has not acknowledged their distress, as well as multi-party disputes;
• Med-Arb (mediation-arbitration) was suitable for cases where the parties are likely to agree on some but not all of the issues involved.

As for the role of government, it was noted that it should be limited to the provision of information, education and quality control. Following this ADR consultation, the number of cases before tribunals continued to spiral and, consequently, the government announced the Leggatt Review of Tribunals in 2001.⁹ The Leggatt Inquiry's remit was ‘to review the delivery of justice through tribunals other than ordinary law’ and to ‘seek to lay down recommendations to ensure there are fair, timely, proportionate and effective arrangements for handling disputes’. Leggatt concluded that employment tribunals operated effectively, but that their increasing workload was a matter of concern. As a result, a further review was commissioned to focus solely upon the operation of employment tribunals. This Employment Tribunal Task Force was headed by leading employment lawyer Janet Gaymer. The Task Force investigated potential reforms to resolve the government's concerns about the rising caseload and the ‘need for reform and modernisation’¹⁰ in the employment tribunal system.

As the Lord Chancellor put it: The work of the Task Force is consistent with the modernising agenda of the Leggatt Report.’ The Task Force was to make recommendations to the Secretary of State for Trade and Industry and the Lord Chancellor on how services could be made more efficient and cost-effective for users. The Task Force's overall objective, according to its remit, was ‘to ensure that the employment tribunal system reflects the needs of its users and the changing environment in which it operates’. The Task Force's Report was published on 30 July 2002. In Chapter 7, discussion of this report's recommendations will be considered.

Despite all of these reviews, task forces and consultations, Genn reports that The legal profession is still very cautious about using ADR outside commercial practice’.¹¹ In this latest LCD report, Genn evaluated the Commercial Court's practice of issuing ADR orders and reviewed the 38 cases to date under the Court of Appeal's mediation scheme, which has been in operation since 1996. On a more optimistic note was the fact that since 1996, there have been over 233 ADR orders made by the Commercial Court, of which 52% were settled and only 5% went on to trial, having failed at ADR. Consequently, Genn commented that ‘a modest level of voluntary take-up of the ADR scheme continued…and…positive experience of ADR does not appear to be producing armies of converts’.

1.2 ADR—ITS MEANING

ADR collectively refers to mediation, conciliation and arbitration, as well as a combination such as Med-Arb. ADR describes the situation where a third party is involved to assist the parties in a settlement of their dispute. Arbitration provides for the provision of the final determination of a dispute by a private tribunal. According to the Community Legal Service's Guide to Alternatives to Court,¹² ‘There are many different types of alternative dispute resolution scheme. The one (or ones) you choose to use will depend on: how you want your problem dealt with; and what sort of problem you have’.¹³

The evidence presented so far suggests that the application of ADR to employment law is questionable. An ADR scheme operated by Acas for alternative resolution of unfair dismissal claims exists. However, such a scheme was born out of a concern about the substantial rise in the caseload of tribunals although, ironically, unfair dismissal claims themselves had increased only marginally over the previous decade. For instance, in the 1980s, the maximum volume of cases in any year was 35,000, as opposed to the maximum volume of 71,000 cases in the 1990s.¹⁴ In 2001, 98,000 IT1 applications were recorded.¹⁵ Shortly after the new scheme was suggested, the number of claims reaching tribunals rose (temporarily) to the point where, in some regions, there was anecdotal evidence of representatives seeking adjournments because there was insufficient time for the preparation of cases.

The view that somehow ADR, namely arbitration, will restore the Donovan ideals ‘lost’ by employment tribunals also appears to be open to question, either because there is insufficient evidence to show that, for example, tribunals are no longer speedy, cheap or accessible, or because it is not clear to many at present how arbitration will have any greater success in achieving those ideals. Paradoxically, it is often unfair dismissal cases which are less complex, less time-consuming and more easily brought by unrepresented applicants than, for example, claims of discrimination, especially disability discrimination. In Chapter 2, the 1998 enabling Act and its policy aims will be considered, as well as the new emerging force of change being brought in under the EA 2002.

One aim of this book is to help advisers to examine more closely the components of the Acas scheme and to identify those unfair dismissal situations and cases where its very differences from the employment tribunal process make it a preferred route for advisers and their clients.

1.3 ARBITRATION ACTS FROM 1697 TO 1996

According to Marshall, ‘An arbitration is the reference of a dispute or difference between not less than two persons for determination after hearing both sides in a judicial manner by another person or persons, other than a court of competent jurisdiction’.¹⁶ The first Arbitration Act was enacted in 1697 and was first consolidated in 1889 following the initial codification under the Common Law Procedure Act 1854. The later 1950 consolidation became more famous. The 1950 Arbitration Act established international arbitrations under the Geneva Convention. This latter initiative was furthered to include the New York Convention in 1975.

However, the watershed for arbitration came in 1996, following the recommendation of the Mustill Committee, with the enactment of an extensive, newly reformed Arbitration Act. Introducing the 1996 Act, Lord Fraser of Carmyllie observed that: ‘The Act follows a logical sequence. The language is clear and simple. Above all it is based on the proposition that arbitration is a valid alternative to litigation as a means of resolving those disputes which inevitably arise in business… The principle of party autonomy is central to the [Act]. The parties who are in dispute are able to decide how the arbitration should be conducted… What potential users want is a system which is speedy and cost-effective, is final and fair.’¹⁷ As Marshall puts it, ‘[th...

Índice

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• FOREWORD
• PREFACE
• TABLE OF CASES
• TABLE OF ABBREVIATIONS
• CHAPTER 1: RESOLVING EMPLOYMENT DISPUTES AND ADR
• CHAPTER 2: UNDERSTANDING THE EMPLOYMENT RIGHTS (DISPUTE RESOLUTION) ACT 1998 AND THE EMPLOYMENT ACT 2002
• CHAPTER 3: BACKGROUND TO THE ACAS SCHEME
• CHAPTER 4: RIGHTS AND WRONGS IN EMPLOYMENT ARBITRATION
• CHAPTER 5: SKILLS AND TECHNIQUES
• CHAPTER 6: ENFORCING REMEDIES AND CHALLENGING THE AWARD
• CHAPTER 7: FUTURE STRATEGIES IN EMPLOYMENT DISPUTE RESOLUTION
• APPENDIX 1: A GUIDE TO THE ACAS ARBITRATION SCHEME
• APPENDIX 2: ACAS ARBITRATION SCHEME
• APPENDIX 3: ARBITRATION ACT 1996 (OF ENGLAND)CHAPTER 23 (17 JUNE 1996)
• APPENDIX 4: EMPLOYMENT ACT 2002
• BIBLIOGRAPHY