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Tribunals tribulations; IAIN ATACK, of the Law Society of Scotland's Employment Law Committee and Senior Partner with Kidstons & Co, answers a question which will have a significant effect on all small businesses.


Q I'VE heard new grievance procedures came into force recently. How will these affect my business?

A THE Employment Act 2002 introduced many key changes to modern employment practice.

One core element of the new law, which came into force on October 1 this year, introduced statutory disciplinary and grievance procedures.

This means that if an employee does not invoke the mandatory grievance procedure he or she is prevented from making a claim at the employment tribunal.

Employers must also be aware that if the correct disciplinary procedure is not followed, the tribunal will make a finding of automatic unfair dismissal, even if the reasons for the dismissal are justified.

The new standard disciplinary procedure involves three steps.

Firstly, the employer must set down their concerns which form the basis of the complaint against the employee in writing and give the employee a copy.

Secondly, a meeting must be held to discuss these points, during which the employee is allowed to state his/her defence.

Finally, the employee must be informed that he/she has the right to appeal.

The same procedures apply to an employee seeking to make a formal grievance.

This three-step procedure is the minimum statutory procedure to which no employer or employee can be contracted out. Employers and employees can agree a more detailed disciplinary procedure.

Employers can only add to what the statute provides - they cannot change or alter the minimum statutory procedures. An employer may have existing disciplinary procedures that provide extra support and information for the employee. If, however, these miss out a fundamental stage, for instance offering an appeal, the disciplinary procedure is not compatible with the regulations and a finding of automatic unfair dismissal will result.

It is important to highlight certain aspects of these procedures.

Firstly, where a timetable has been set down, each step and action under the procedure must be taken without unreasonable delay. The tribunals still have to define 'unreasonable delay', but in the meantime a common-sense approach should prevail.

Secondly, employers should make sure that the timing and location of meetings are reasonable - for instance the reasonable time of a meeting for a nightshift worker may not coincide with that of an HR professional.

Thirdly, meetings must also be conducted in a manner that allows both employer and employee to fully explain their position. Finally, where an appeal meeting is to be held, the employer should be represented by a more senior manager than attended the first meeting, as is reasonably practicable. Where an employer fails to follow the disciplinary procedures, two consequences may follow.

The first is the dismissal is held to be automatically unfair. The tribunal will not look at the issue of reasonableness if the procedures have not been followed correctly.

The second is that compensation is increased. The tribunal must increase any award that it makes to the employee by 10 per cent and may, if it considers it just and equitable, increase it by a further amount up to 50 per cent. The statutory limit on the compensatory award, however, remains at pounds 55,000.

An employee who has not followed the statutory grievance procedures will also suffer repercussions.

First, the employee may be debarred from bringing an employment tribunal claim. This is probably the most important aspect of the changes to grievance procedures.

The second impact may be that any compensation awarded to an employee is reduced. Again, compensation can be reduced by between 10 and 50 per cent.

In limited circumstances, the parties will not be penalised for non-compliance with the disciplinary or grievance procedures, if, for example, there has been violent, abusive or otherwise unacceptable behaviour of one party, long-term illness, cessation of the employer's business or issues of national security.

Overall, the procedures have been introduced to reduce the burden on the employment tribunal system, forcing problems to be dealt with more efficiently in the workplace by both employees and employers. Ultimately, it is prudent to seek legal advice at an early stage as it is certainly likely to be less expensive than a finding of automatic unfair dismissal at a tribunal.

# John Downie of the Federation of Small Businesses adds: 'These changes were designed to reduce the number of industrial tribunals. We are concerned, however, that many employers will end up being found guilty of unfair dismissal simply because they are unaware of the new regulations.

'These are arguably the most significant changes to employment legislation in the past decade. Moreover, they apply from day one of employment and not just to conduct and capability dismissal, but also to redundancies, long-term incapacity dismissals, expiry of fixed-term contracts and retirement.'
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Title Annotation:Features
Publication:Daily Record (Glasgow, Scotland)
Date:Nov 18, 2004
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