Duncan Bain, senior associate at the Oxford office of Penningtons Manches, explains how new legislation is aimed at cutting the number of employment tribunal claims

 

Employment tribunal claims are falling and this pattern is likely to continue. Statistics released by the Government in March show 79 per cent fewer claims were received between October and December last year when compared to the same period in 2012.
The most likely explanation for this drop is the introduction in July 2013 of fees for bringing claims to the Employment Tribunal — for example, an ‘issue fee’ of £250 and a ‘hearing fee’ of £950 in order to bring an unfair dismissal claim.
The Government has now introduced an early conciliation scheme which is intended to reduce the numbers of claims even further.
As from last week, an employee will not be able to bring a claim to a tribunal unless they have followed an ‘early conciliation’ process. Claimants will have to provide a ‘conciliation certificate’ with their claim in order to show they have done this.
The process is compulsory for the claimant, but only to a limited extent, since either party can withdraw from it once it has started.
The objective of the scheme is to allow the parties the opportunity of agreeing to settle potential claims, saving the need for a tribunal claim.
It starts by the claimant contacting the Advisory Conciliation and Arbitration Service (ACAS). They will provide contact details for their employer.
An ACAS conciliation officer will be allocated to the case and will then contact both the claimant and the employer to find out what the dispute is about and invite them to participate in settlement discussions.
Neither the claimant nor the employer is under any compulsion to agree to participate. If either party wishes to decline to take part then the process will finish.
The claimant will then receive a conciliation certificate and be free to lodge a tribunal claim. But if the parties see there is some potential benefit in taking part in the discussions, then ACAS will act as an intermediary and seek to facilitate agreement.
ACAS say the process is “the free, fast and less stressful alternative to tribunal proceedings.”
The default duration is one month but may be extended, if the parties both agree, by a further 14 days.
Discussions will usually take place via telephone. ACAS will use one of these calls to convey what the claimant’s case is about and what they are seeking to receive by way of settlement.
Representatives may do the talking for the parties if they prefer. ACAS will convey only what the parties ask them to convey. They will not advise either party on the merits of a case and should be impartial. However they will give guidance on general principles relating to tribunal claims.
The discussions will be “without prejudice.” This means the parties will not be allowed to refer to anything said during the settlement discussions in any later tribunal hearing.
This should encourage the parties to make comments and financial proposals without the fear that they will be undermining their own case.
If settlement is reached then ACAS can formalise an ACAS settlement agreement known as a COT3 which will bind the parties.
The terms of these settlement agreements are flexible. They potentially may settle several different claims at the same time and may include a range of obligations relating, for example, to payment terms, confidentiality, tax and non-financial arrangements, such as the provision of an agreed reference.
If settlement is not reached ACAS will confirm that early conciliation has failed and issue a conciliation certificate.
The claimant may then have to act quickly to bring a claim. There are strict time limits — three months in most cases.
During any period of early conciliation the time limit will be paused, as long as the employee starts the conciliation process while the time limit is still continuing. In this case, if conciliation fails, the claimant will automatically receive a short extension to the time limit.
Early conciliation is likely to be helpful for employers. Whilst some commentators think the change is not a major one, this view is probably too simplistic.
It has always been possible for parties to contact ACAS before a claim begins but it has never been common in practice. Parties may have been anxious about appearing weak through making the first move and many claimants would not have known that this option was available to them.
Before this legislation came in, most tribunal claims settled through ACAS but only after a claim is started and often after substantial legal costs have been incurred by the employer.
This option of late settlement will still be available to the parties if early conciliation fails but the introduction of fees means that even an unrepresented claimant has an incentive to settle early where possible.      ib