Government reforms (1): ACAS early conciliation

early conciliation - alarm clock and gavelWhat do we already know?

The Government announced in November 2011 that it intended to introduce ‘Early Conciliation’ (EC) as the first step towards its stated aim of simplifying and streamlining the Employment Tribunal process. It then consulted on the detail of how Early Conciliation would work in practice. We set out the Government’s response to this consultation in our July Newsletter Government reforms: ACAS early conciliation.

As a reminder, the proposed process is broadly as follows:

  • All prospective claimants (with some limited exceptions) will be required to contact ACAS to discuss EC before they can start a claim at the Tribunal.
  • When prospective claimants contact ACAS, they will need to complete and submit an ‘Early Conciliation Form’;
  • An ‘Early Conciliation Support Officer’ (ESCO) will then make ‘reasonable attempts’ to contact the claimant to obtain basic information and outline the conciliation process;
  • If the ESCO is able to contact the claimant and she or he wishes to conciliate, the ECSO will pass the matter to a conciliator. If the respondent is agreeable, the conciliator will have up to one calendar month to facilitate a settlement. This conciliation period can be extended by a further two weeks with the parties’ agreement if there is a reasonable prospect of achieving settlement. If EC is successful, a legally binding settlement agreement would be signed by the parties; and
  • Where the ECSO is unable to contact the claimant, or if either of the parties refuses to conciliate, or should the conciliation fail or the conciliation period expires without settlement having been reached, ACAS will issue a certificate to confirm that the claimant has complied with their duty. The claimant will then be able to present a Tribunal claim, including a unique EC reference number in their ET1 to confirm compliance.

Early Conciliation by ACAS will be entirely voluntary and prospective claimants who do not want to settle the matter before the Tribunal will be able to decline it and move on to the Tribunal to submit their claim.

In addition the Government’s Response to Consultation confirmed:

  • Early Conciliation form and certificate: there will be no obligation upon a claimant to provide information about the nature of their claim at this stage, the form will ask for basic information only, such as claimant and employer contact details and employment details. Where a form is received, ACAS will issue an Early Conciliation Certificate, confirming to the Tribunal that a claimant has complied with the pre-claim requirements; and
  • ACAS officers:  the primary role of ECSOs will be to provide prospective claimants with information on what the law says, to enable them to decide how to proceed. It is not the role of the ECSO or Conciliator 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 Tribunal proceedings entail – including issues such as fees – the better placed they will be to consider their options. 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.

What is the news? 

The Government has now published Regulations and Rules setting out the new Early Conciliation Rules of Procedure. The Rules set out the process to be adopted by potential claimants before bringing a Tribunal claim. The Regulations and Rules will come into force on 6 April 2014.  Any new requests for conciliation from that date will be treated as EC.  However, the EC process will only be mandatory for claims presented to a Tribunal on or after 6 May 2014.

Changes since the initial consultation include that, as an alternative to submitting a completed EC form online or by post, prospective claimants will be able to telephone ACAS who will fill in the form.  It will not be possible to deliver an EC form by hand. The mandatory required information (omission of which risks rejection of the EC form) is now limited to the name and address of both the prospective claimant and respondent.

How this affects the usual three-month time limit to bring claims is complex:

  1. the time limit for bringing a Tribunal claim will be put on hold while EC is attempted – effectively “stopping the clock”; and
  1. if EC starts within a month of the expiry of the time limit, a further month is added after the end of EC for the worker to bring a claim.

This means, for example, that if EC is initiated on the day before the time limit expires, an employee could potentially have up to 5 or 5 and a half months within which to bring a claim.

It is worth noting that 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 a Tribunal 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.

What do we think?

The large majority of Tribunal claims from April 2014 onwards are going to involve more engagement with an ACAS officer than we have seen up until now. The opportunity will also come far earlier than previously. For employers this means that, whereas previously you may have waited to see if a dispute with you would result in a Tribunal claim, you may well now have to take a view much earlier as to whether you are willing to negotiate a settlement. You may also want to take into account Tribunal fees and weigh these in the balance to encourage earlier settlement for a lower price in order for the employee to avoid the Tribunal fees. If an employee continues to hold out for a higher settlement amount, you may wish to hold off from negotiations to see if the employee is committed enough to his/her claim to be prepared to stump up the Tribunal fee.

Importantly for employers, issues identified during the EC 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.

Overall, the Government’s hope is that this will help head off unmeritorious claims and prevent such claims from wasting time and money by progressing through the Tribunal system. This is because the Government believes that ACAS will be able to offer helpful guidance to claimants on the merits of their claim and dissuade claimants with no prospect of success from presenting any claims.

However, whether an already overstretched ACAS will be able to fully meet this aim remains to be seen. Also, as many employers will be aware from experience, there are some claimants that will continue to pursue their claim in spite of all attempts, ACAS included, to persuade them otherwise!