The Employment Act 2008 received the Royal Assent on 6 December 2008. It was originally introduced into Parliament as the Employment Simplification Bill on 11 July 2008. As that name implied, it was intended to remove the horrendous complications of the technicalities surrounding the dispute resolution procedures introduced by the Employment Act 2002 and the 2004 disciplinary, dismissal and grievance procedures. The Employment Act 2008 repeals the legislation which introduced these procedures.

The indications were that mediation would play a significant part in the new legislation and Codes of Practice. Those indications were: the Gibbons Report which recommended reform; the many pronouncements in favour of mediation at the highest judicial level and the apparent successes of pilot schemes at several Tribunal centres.

In March 2007, Michael Gibbons wrote his report Better Dispute Resolution: A Review of Employment Dispute Resolution in Great Britain. In his foreword letter to the Secretary of State for the DTI, he stated that 'the headline recommendation is the complete repeal of the statutory dispute resolution procedures set out in the 2004 Dispute Resolution Regulations. I also present a suite of complementary recommendations which, in aggregate, are genuinely deregulatory, and simplifying.' Importantly, he also stated:

'I would like to comment on how employment disputes not solved in the workplace should be resolved in the future. My vision is of a greatly increased role for mediation; my attitude is based, as you know, on my knowledge of the use of mediation in resolving difficult family disputes, and also with some involvement in alternative dispute resolution through the civil courts. Encouraged by signs of success in the context of employment disputes elsewhere in the world, I commend increased use of mediation to employers, employees and practitioners in Great Britain'.

This vision was further expounded on in his Executive Summary. Mediation and other ADR techniques were seen as effective means of achieving early resolution with positive experience from New Zealand, the US and in the civil courts. Although the Gibbons Report did not recommend a ‘near mandatory’ approach to ADR, it did recommend that the Government should offer a free early dispute resolution procedure and there should be incentives to use early resolution techniques. It envisaged giving employment tribunals discretion to take into account the parties’ efforts to settle the dispute when making awards and costs offers. It also recommended that the fixed periods for ACAS to conciliate should be abolished.

Some would say that the Gibbons Report echoed Judges’ views in the civil courts for a number of years. In Frank Cowl & Ors v Plymouth City Council [2002] 1 WLR 803, Lord Woolf stated that there is a 'paramount importance of avoiding litigation whenever this is possible'. This means that litigants 'must by now be acutely conscious of the contribution alternative dispute resolution can make to resolving disputes in a manner which both meets the needs of the parties and the public and saves time, expense and stress... The courts should...make appropriate use of their ample powers under the CPR to ensure that the parties try to resolve the dispute with the minimum involvement of the courts. The legal aid authorities should co-operate in support of this approach' and that 'Today sufficient should be known about ADR to make the failure to adopt it, in particular when public money is involved, indefensible'. Brooke LJ stated in Dunnett v Railtrack plc [2002] 2 ALL ER 850 that ‘Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve'. . In Halsey v Milton Keynes NHS Trust [2004] 1 WLR 3002, the Court of Appeal decided that all lawyers conducting litigation should now routinely consider with their clients whether their disputes are suitable for ADR. Parties could not be ordered against their wishes to mediate but successful parties at trial or appeal could be the subject of adverse costs orders if they had unreasonably refused to agree to mediation.

In many Employment Tribunal cases, the costs may be out of proportion to the claim, but, in general terms, costs orders will not be made. Costs order may however be made in circumstances where the paying party has, in bringing or conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or where the bringing or conducting of the proceedings by the paying party has been misconceived. There is, of course, no reason why refusal to consider mediation could not have been brought within the parameters of the costs rules.

In July 2006, it was announced that a trial judicial mediation scheme was to be run in Birmingham, London Central and Newcastle Employment Tribunals. These pilot schemes have been encouraging. However, as in the civil courts, mediation must be voluntary so judicial mediation will only be contemplated with the consent of both sides; and, even then, the Tribunal Regional Judge has to be satisfied that mediation is appropriate to the case. Moreover, there are not, as yet, sufficient statistics to gauge the schemes’ success. The evidence is perhaps anecdotal but certainly, in the authors’ experiences, Tribunal hearings of many days have been obviated by settlements at judicial mediations. The fact that the parties do not have to pay for these mediations is a considerable attraction but nevertheless the mediations do not appear to be as effective as private mediations.

 

 

Nevertheless, the Employment Act 2008 and the ACAS Code have not adopted any form of compulsion for mediation in the Tribunals and the references to mediation are not as positive as some had expected.

As to the Employment Act 2008, section 3 inserts a new s.207A to the Trade Union and Labour Relations (Consolidation) Act 1992 which provides that an Employment Tribunal may increase or decrease any award it makes by no more than 25% if the employer or employee has unreasonably failed to comply with any Code of Practice issued under the Act. Also, sections 5 and 6 of the 2008 Act remove the fixed time limits for conciliation and ACAS has been given a power to free resources for pre-claim conciliation.

As to codes, the new ACAS Code of Practice on Disciplinary and Grievance Procedures (CoP 1) introduces a new 9 page, 45 paragraph Code which will come into force on 6th April 2009 when the 2008 Act comes into force. The brevity of the Code compares with the 81 page ACAS Guidance, Discipline and Grievances at Work, which will not have statutory effect. The only reference to mediation in the Code is in the non-binding foreword which states that, if the employer and employee cannot resolve their differences: ' ...employers and employees should consider using an independent third party to help resolve the problem. The third party need not come from outside the organisation but could be an internal mediator, so long as they are not involved in the disciplinary or grievance issue. In some cases, an external mediator might be appropriate.' The Guidance (also non-binding) refers in two short pages to mediation (pages 7 and 8).

ACAS continues to champion mediation, for example through its recent publication ACAS/CIPD - Mediation: An Employer's Guide of 17th September 2008. That identifies the significant advantages of mediating employment disputes: 'It is a cheaper alternative to employment tribunal claims, which carry immediate financial costs to the organisation and the individual claimant as well as non-financial burdens. Mediation is also a speedier option and can nip potentially damaging disputes in the bud…Moreover employment tribunals do not resolve systemic problems at work that may underly an individual dispute. Mediation is more likely to enable the employer to get beneath the problem and make changes to working practices that can benefit employees and the organisation more generally in the long term.'

We hope these significant advantages will lead to a greater increase in mediating employment disputes and greater encouragement of mediation by the tribunals. We hope, too, that the provision for increasing or decreasing awards for failure to comply with codes of practice will be interpreted by the tribunals so that a failure to mediate will produce such a result. However, it is regrettable that the legislation was not explicit that an unreasonable failure to agree to mediation would have such a result. It is also regrettable that the legislation contains no formal costs compunction against parties who unreasonably refuse to agree to mediate employment disputes. It seems that the recent reforms have been a ‘missed opportunity’.