ACAS early conciliation and penalties for employers

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ACAS early conciliation and financial penalties for employers

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The Government has now published Regulations setting out the new Early Conciliation Rules of Procedure. The Rules set out the process to be adopted by most prospective claimants before they can present a claim to an employment tribunal (ET). The Regulations (and the Rules) will come into force on 6 April 2014,as will the new discretionary power for ETs to impose a financial penalty, in addition to any compensation, on employers who lose a claim. These changes represent further significant reform of the ET system and are part of the package of measures included within the Enterprise and Regulatory Reform Act 2013 (ERRA).

Early conciliation

ERRA introduced a requirement as a result of which most prospective claimants will have to contact ACAS before they can present an ET claim. However, a claimant can present a claim without complying with the EC process if:

the claimant is presenting a claim on the same claim form as other claimants or joining a claim which has already been presented to an ET by another claimant. In these circumstances, the prospective claimant can rely on the fact that another claimant has complied with the requirement for EC and has a certificate from ACAS (see below);
the claim appears on the same claim form as proceedings which do not require EC;
the prospective respondent has already contacted ACAS in relation to the dispute; or
an unfair dismissal claim is accompanied by an interim relief application.

Commencing EC

To commence EC, an EC form must be completed. A prospective claimant must either present a completed EC form to ACAS online or by post or telephone ACAS, in which case ACAS will insert the relevant details into an EC form. As anticipated, the Regulations confirm that there will be no obligation on prospective claimants to provide information about the nature of their claim at this stage; the form will ask for basic information only, namely the prospective parties’ names and addresses. The form may be rejected if it does not contain this basic information, or ACAS may contact the prospective claimant to seek to obtain it.

Once the form is completed, ACAS is under a duty to make reasonable attempts to contact a prospective claimant. If he or she consents, ACAS must then make reasonable attempts to contact a prospective respondent. If ACAS is unable to contact either, it will conclude that settlement is not possible and issue an EC certificate. Individual ACAS officers will have discretion over what attempts they make to contact the parties and the point at which they determine the process should be terminated.

Conciliation

Once contact is established, the conciliation officer allocated to the case will be under a duty to promote settlement for one calendar month. This period can be extended by the conciliation officer if he or she believes there is a reasonable prospect of achieving a settlement within the additional 14 days permitted by way of extension and the parties consent.

Following various questions over the role of the ACAS officers, the Government’s Response to Consultation clarified that their primary role will be to provide prospective claimants with information on what the law says, to enable them to decide how to proceed. It is not their role to offer an opinion on the merits of any prospective claim, other than to point out issues such as qualifying periods or time limits. Even so, the better informed claimants are about what ET proceedings entail –including now, issues such as fees – the better placed they will be to consider their options.

EC certificate

If, during the conciliation period, the conciliator concludes that settlement of the dispute (or part) is not possible, or once the conciliation period comes to an end, ACAS will issue an EC certificate with a unique reference number given by ACAS. The certificate will be dated and will also specify the date ACAS received the EC form. The parties with whom ACAS has been in contact will be sent a copy of the certificate by email – in which case it is deemed received on the day sent- or by post – in which case it is deemed received on the day it would be delivered in the ordinary course of the post.

Time limits

The period starting the day after a claimant contacts ACAS and ending the day they receive an EC certificate will be ignored for the purposes of calculating an ET time limit

Transitional provisions

The new duty on ACAS to provide EC applies from 6th April 2014, so any new requests for conciliation from that date will be treated as EC.

The EC requirement will, however, apply only in relation to claims presented to an ET on or after 6th May 2014. However, if between 6th April 2014 and 5th May 2014, prospective claimants contact ACAS for conciliation, they will need an EC certificate when they present their claim and will benefit from the time limit changes made by Schedule 2 ERRA.

Financial penalties for employers

ETs will, from 6 April, have the power to order an employer who loses at an ET, to pay a penalty to the Secretary of State if it considers that the employer’s breach of the rights to which the claim relates has one or more aggravating feature. The value of such a penalty will be 50% of any financial award, with a minimum threshold of £100 and a maximum cap of £5,000, but will be reduced by 50% if paid within 21 days. Further, where a Tribunal orders a non-financial award, it will be able to ascribe a monetary value to it. The ability to order payment of such a penalty will only apply to claims presented on or after 6 April 2014.

Comment

The intention of EC is to increase the number of cases where parties reach an agreed settlement; to ensure the claimant and respondent benefit from contact with ACAS in terms of information and understanding, even where they do end up in ET; and to improve overall satisfaction with the employment dispute resolution system. Importantly for employers, issues identified during the EC System process will not restrict or bind claimants in terms of future allegations, if they go on to commence proceedings. The process will accordingly give employers an indication of the issues in dispute but may not be comprehensive.