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Early conciliation to become mandatory step in Tribunal proceedings

Early Conciliation will become an important stage in the Tribunal process from 6 May 2014 as provided by the Enterprise and Regulatory Reform Act 2013.

The rule change means that prospective claimants wanting to issue proceedings with Tribunals will not be allowed to proceed without first contacting ACAS and obtaining an Early Conciliation certificate (EC certificate).

The scheme was launched on 6 April 2014 on a voluntary basis but will be mandatory as from 6 May 2014 with all claims being brought on or after this date needing an EC certificate to proceed.

How will it work?
The onus will be on the prospective claimant to comply with the new procedure by contacting ACAS and filling in an Early Conciliation Form (EC Form). This can be done online, by phone or by post.

Unhelpfully, the EC Form does not require any details of the dispute but will instead focus on obtaining contact details for the relevant parties.

An Early Conciliation Support Officer will then contact the prospective claimant within one working day to inform them about how the process will work and to gain some basic information about the dispute.

This information, along with the EC Form, is then passed onto an ACAS Conciliator.

The Conciliator will attempt to contact both parties within two working days of receiving the case and will try and encourage settlement.

The Government has confirmed that the Conciliator’s role is not to advise on the merits of the claim but to give some guidance on the law to enable the prospective claimant to decide how to proceed.

The Conciliator will set aside one calendar month to promote settlement, extendable by 14 days if settlement appears likely and the parties agree.

If the period ends without settlement, or the parties are non-contactable, the Conciliator will issue an EC certificate to the parties.

The certificate contains a unique number which the prospective claimant must enter on a new Tribunal claim (ET1) form to prove that they have been through the process.

There are only very limited circumstances where a prospective claimant would not be required to comply the procedure.

It appears that claims in respect of TUPE and the right to be accompanied have been accidentally omitted from the scheme although this is not overly clear.

In addition, where ACAS have already been contacted by one of the parties in respect of the matter, where the matter requires interim relief, or where the claim includes a matter which is excluded by the legislation, Early Conciliation will not apply.

These exemptions are few and limited. Therefore the majority of prospective claimants will need to comply.

Time limits
Claimants will benefit from suspended limitation periods while they comply with the new procedure.

Time will stop from the day after ACAS are contacted to the day the EC certificate is delivered.

The way other provisions have been drafted means claimants will always have one month from the date of the EC Certificate to issue their claim.

Therefore a claimant does not have to worry about being out of time as a result of complying with the procedure.

Delivery of the certificate will be deemed to be the day the certificate is sent if by email or, if by post, the day it would be delivered in the ordinary post.

The Government hopes the new procedure will significantly reduce the number of claims that proceed to Tribunal by encouraging parties to settle at a very early stage.

It is also hoped to answer the concerns of businesses worried about the prospect of having to defend a Tribunal claim and the costs associated with this, which businesses have highlighted as affecting their decision to take on staff.

Only time will tell as to whether the scheme is a success or merely seen as a stage which must be completed in the ultimate Tribunal process.

There is also the potential for extensive satellite litigation as parties seek to prevent claims from proceeding on the basis of non-compliance with the Early Conciliation scheme.

For example, if a Claimant submits an ET1 form in respect of a claim that did not actually form the basis of the Early Conciliation discussions.

Unfortunately, neither the EC Certificate, nor the new ET1 forms, will require any details of the matter to be recorded.

This will undoubtedly cause some uncertainty and we will have to wait and see how the Tribunals resolve this.

What this means for you
Employers will need to be prepared for the new procedure and devise a strategy to deal with early settlement attempts.

Prospective claimants will be obliged to provide ACAS with the name and the address of the Respondent.

The name of the Respondent given by prospective claimants to ACAS may not be the person who would ordinarily deal with such matters.

Further, if the allegation was one of discrimination, the named individual may prefer not to pass on the details.

Therefore, it is important to have a system in place so that employees know what to do and to whom they should refer if they are contacted by ACAS.

As always, ensuring that information and documents concerning employees are properly maintained and retained so that the relevant details are to hand should you be contacted by ACAS will also be helpful in deciding what approach to take to early conciliation.

As ever, the exit interview process may enable the business to flush out issues and anticipate when there may be a potential claim and therefore contact from ACAS.

Given the impact on time limits, employers may have longer to wait before they receive any claim, prolonging the anticipation and uncertainty as to whether the employee will issue proceedings or not.

An employer’s involvement in the process is voluntary and you can refuse to participate in early conciliation.

There may also be some difficulty in making decisions if only basic information about the dispute is available. In addition, there may be difficulties if the prospective claimant’s expectations in terms of settlement are unrealistic.

Some employers may take the commercial decision of not settling the matter and waiting to see whether the prospective claimant pays the fee to issue the claim.

The impact of the Tribunal fee system on claims has been dramatic with claims falling by 79%.

In other cases, depending on the circumstances, an employer may decide that there is some benefit in settling a claim early, such as saving the costs associated with defending a Tribunal hearing.

Furthermore, conciliation can produce settlements that are not just focused on money, such as the provision of a reference or the introduction of restrictive covenants, which may benefit the parties more.

The decision whether or not to participate in Early Conciliation needs to be considered carefully and should be taken on a case by case basis.

It is worth bearing in mind that even if Early Conciliation is unsuccessful, the services of ACAS will still be available in the usual way.

How we can help 
If you are contacted by ACAS in respect of Early Conciliation, please do not hesitate to contact a member of the team who will be able to discuss the case with you, advise on prospects, help you decide whether to participate in Early Conciliation and guide you through the process.