New rules could help employers avoid costly industrial tribunals.
The Government is pushing through legislation, the Employment Rights (Dispute Resolution) Bill, which will allow parties to opt out of the industrial tribunal system in straightforward unfair dismissal cases.
This is superficially attractive, particularly for SMEs. The reason is that the proceedings will be informal (no cross-examination of formal oaths); heard in private (possibly at the employer's premises); and will have a 'legalised common sense' fairness test applied by an ACAS-appointed arbitrator. Although there will be a right to legal representation, employers may feel encouraged to deal with more cases themselves, which may make the process cheaper. In addition, provided ACAS has sufficient resources to be able to progress applications promptly, cases may be heard more quickly than through the over-burdened tribunal system.
However, there can only be an opt-out where the employee agrees, and many employees may be wary about waiving their rights to a public, formal hearing. Even if employees agree to opt out, employers should note that there are also some potential downsides, including the following:
Decisions will be unpredictable, depending on the view of the arbitrator.
Even for one firm dealing with two separate cases where the facts are similar, there may be different outcomes if the arbitrator is different in each case.
There is unlikely to be any right of appeal.
The absence of cross-examination may leave employers frustrated at being unable to demonstrate that their former employee may be lying.
Further details of the proposed ACAS scheme are awaited. The opt-out may be possible sometime next year so it will pay you to keep an eye out for developments.
Nikki Duncan is an employment law partner at Bond Pearce, 01752 266633.