All you ever wanted to ask about early conciliation

Early conciliation is arriving next April, and there has been much discussion about its effectiveness and the design of the scheme. Here the scheme is questioned and debated from different perspectives.

This article was written for and first featured in the ELA Briefing – December 2013

The participants were: Stephen Levinson, Keystone Law, who acted as sceptical interlocutor; Jenny Eady QC, Old Square Chambers, a specialist in employment law of more than 20 years‘ standing and an independent member of the Acas Council; and John Wiggins, an experienced law centre adviser.

Levinson: EC is expected to come in next April. Will Acas be ready in time?

Wiggins: The extra funding and recruitment of Early Conciliation Support Officers are welcome but there may well be difficulties because further regulations and guidance are still due to be released and will be needed in good time for Acas and practitioners to be up to speed. Also, Acas will be dealing with far more litigants in person and will now be conciliating before receipt of an ET1, which will add to the time they will need to take clarifying disputes with litigants in person.

Eady: Yes: Acas will be ready to deliver in April 2014. It has funding to recruit and train additional conciliators as well as the existing team and to redevelop its electronic case management system – the basic design work has already been completed and is being tested. It has also developed a flexible resourcing model so that it is in the best place to have the right number of conciliators and ECSOs for early conciliation.

The concerns John raises are entirely fair but it must be remembered that Acas conciliators are already very used to working with litigants in person and are astute to avoid getting embroiled in the dispute between the parties themselves.

Levinson: Do you think the design of the scheme is right; for example, is it right that claimants do not have to mention all of the claims they might bring?

Eady: The design of EC has drawn heavily on the success of Acas Pre-Claim Conciliation. A calendar month has generally proved to be sufficient for PCC and a two-week extension is available if needed. About 50% of all PCC requests are settled on an Acas COT3 and about 75% in total don’t go on to become tribunal claims. It’s also the case that Acas retains its statutory duty to offer conciliation on the presentation of an ET1 claim.

Wiggins: I think the approach of Acas and the Government (confirmed in the response to the consultation in July 2013) of avoiding excessive formality in EC is right, although many respondents’ representatives believe it will create uncertainty.

Requiring detailed particularisation of claims in advance would certainly have created a huge potential for satellite litigation, similar to that which arose in relation to mandatory statutory disciplinary and grievance procedures. Problems may still arise when a second or third respondent has to be added after the claim has been lodged. This can often be the case when claimants are uncertain about the correct identity of respondents when they start the claim.

Eady: Where more than one employer is party to a claim then the prospective claimant might present a separate EC request for each, but I don’t think they would be obliged to do so. As I understand it, all claimants have to demonstrate is that they have fulfilled their obligation to notify Acas of their intention to make a claim. The EC certificate can then state that it covers the claimant’s claim, irrespective of how many respondents are cited on it.

Levinson: Is EC really appropriate for every type of claim? Only a third of respondents to the consultation thought it was.

Wiggins: This has also been recognised to some extent in the Government’s response to the consultation paper, published in July 2013. Claims for interim relief are to be left out of EC, as are claims for protective awards. The Government has also made concessions on insolvency claims when Acas establishes that the employer is insolvent. I think whistleblowing claims remain problematic as some employees may prefer to raise issues first in the tribunal because of potential risks of additional harassment or victimisation. More complex claims such as TUPE or difficult discrimination cases may also not be appropriate for EC, given the time it takes to clarify such claims and the risk of claimants giving up valid claims before they have been properly explored.

Eady: If either party feels that EC isn’t appropriate to the claim, they are not obliged to participate. However, it’s difficult to see how an early, informal, Acas-brokered exploration of settlement will hinder rather than help. EC can be regarded as just the start of the process – albeit an earlier start than before – in complex cases.

Levinson: Will it work for multiple claims?

Wiggins: The consultation paper recognised that there were likely to be issues with multiple claims and provided for a lead claimant’s claim to initiate the process. It doesn’t seem to make much sense to have EC for multiple claims. Most multiple claims are likely to involve represented parties, yet the procedure requires the initial contact to be with the claimant personally.

Eady: I understand that attempts will be made at the outset – through the ECSO – to identify multiple claims so contact can simply be made with the representative/s for the various would-be claimants. We should not write off the idea that early conciliation could be just as effective in multiple cases as the individual claim. It is certainly true that multiple cases have accounted for much of the rise in employment tribunal claims in the last ten years but the Acas Pre-Claim Conciliation service resolves over 62% of multiple cases where conciliation has been requested, so this is certainly not a lost cause.

Levinson: Many employers’ advisers are saying that having to pay to bring a claim will cut across the aims of the scheme because employers will want to wait and see if the claimant really has the will to pay up, so they will refuse to conciliate. What do you both think?

Eady: Well it is possible that employers will want to wait and see. That tactic may backfire, and, of course, will be misconceived in cases where the claimant is entitled to fee remission. So far Acas has not seen evidence that employers are refusing to engage with PCC since the introduction of fees.

Wiggins: I think this is inevitable, indeed I have seen articles suggesting to employers that they may wish to consider waiting to see whether or not claimants actually will be prepared to incur a fee. I suspect that the fee regime will operate to stop many claims being resolved early. Those cases that are resolved early are likely to be those that are less complex.

Levinson: Does our experience not teach us that settling at this stage is about as difficult as it gets? Would the Government not be better off investing in a mediation project to be available during employment?

Wiggins: I agree. The reality is that many disputes are already resolved long before they get near the tribunal stage. By the time a claimant is considering an ET1, the chances of a simple resolution have usually diminished. I think it would have been better perhaps to have a more generalised consultation first to generate ideas from practitioners and others, as to how disputes could be resolved at a much earlier stage. Mediation is one option. Another is to see claimants have proper advice before considering a claim.

Eady: Acas certainly recognises that resolution earlier in the process is beneficial and has long supported the use of mediation in the workplace but this isn’t always successful and EC offers a final opportunity to resolve the matter before lodging a claim. The Government is supporting some pilots to promote mediation in the workplace and the results of these should throw further light on this issue.

Levinson: Many commentators are saying that the process will be used cynically by either side to extract information helpful to their claims. Do you think this likely and, if it happens, how can this be discouraged?

Eady: In theory, there is already plenty of scope for this in either PCC or tribunal-based conciliation. In practice, the experience of Acas suggests that both parties are usually willing to enter into constructive discussions rather than fishing trips, and about three quarters of claims never get as far as a hearing as a result.

Wiggins: I think this is less likely now the degree of detail and formality required in a referral to EC has been limited.

Levinson: Are the ‘stop-the-clock’ rules far too complicated and will they lead to satellite litigation? Is a month long enough even with the possible two-week extension?

Eady: The basic application of the stop-the-clock rules should be very simple. There will be an initial pause of up to a calendar month and a two-week extension if more time is needed, and it is Acas’s intention to encourage the parties to take full advantage of the pause to focus on the prospects of settlement. After the pause the claimant should have at least a further calendar month in which to submit their claim. Acas will be able to explain the basics but will not be able to calculate precise dates for people. It will remain the responsibility of the claimant (and/or their representative) to refer to available guidance and ensure their claim is submitted on time. As for whether a month is long enough, it is informed by Acas’s experience of PCC. The median duration of all PCC cases completed between April and December 2010 was 23 days.

Wiggins: Yes, there definitely will be satellite litigation in my view. There were considerable issues over limitation periods from the mandatory statutory and disciplinary procedures, and I think these will be repeated. Acas may find itself in a more complex position than it currently is, given its role as certifier of the process. A month is a short period if the facts of the claim cannot easily be clarified in terms of facts and quantum and ‘the stop-the-clock’ rules remain complicated.

Levinson: Is it really possible for this scheme to work if the conciliators can’t give any advice to claimants or respondents? How can they manage expectations without doing that?

Wiggins: Acas has always provided advice to some claimants through its advice line, usually pre-ET1. Acas will advise on time limits and other matters but is careful not to exceed its remit which prevents it advising on merits. I think this will continue, but its position is more complex now given the ending of much funding for advice from the voluntary sector and others and the increase in numbers of litigants in person.

Eady: Acas will provide information to parties as it does in conciliation now. It will also explore strengths and weaknesses of the case. The issue of avoiding overstepping the line into advice but at the same time avoiding unrealistic expectations is not new – Acas conciliators have had to cope with this since the very introduction of the duty to offer conciliation in individual employment tribunal cases.

Levinson: The Government claims that its analysis is that EC has the potential to reduce claims to employment tribunals by 25%. That is hugely optimistic isn’t it?

Wiggins: I think tribunal fees, changes such as the new two-year limit for unfair dismissal and the removal of 20,000 employment cases per annum from legal aid will themselves cut the number of claims considerably. The figure of 25% does seem optimistic, but it may be too early to say.

Eady: PCC is already a highly effective way of resolving disputes before they reach an employment tribunal. In 2012 the service helped resolve more than 22,000 disputes between employers and employees, thus avoiding the stress, cost and anxiety of an employment tribunal; less than 25% went on to lodge an ET1. EC builds on the success of this voluntary process but the percentage of cases resolved may very well differ as EC will handle a greater variety of cases than the current PCC service.

Levinson:Does it make the slightest difference to the parties whether Acas has a duty or a power to provide EC?

Eady: Making it a duty rather than a power sends an important signal regarding the importance which legislators place on EC but for parties it is less of an issue.

Wiggins: It will make some difference, as a duty will concentrate minds to some extent on the need to resolve matters. I think this may have less effect when claimants are represented rather than litigants in person.

Levinson: Are there any circumstances where you think a refusal to conciliate ought to be a factor a tribunal may take into account when awarding costs?

Wiggins: No I don’t think that would be appropriate, given that EC is operating at a very preliminary stage.

Eady: No, conciliation has to be voluntary and confidential if it is to work properly. The parties need to be able to open up and discuss issues honestly, rather than being guarded about what they say in case a tribunal takes it into account when making its award.

This article was written for and first featured in Employment Law Briefing – December 2013