Why Your Business Needs a Dispute Resolution Procedure

New employment regulations came into force in the UK in October 2004 in the form of the Employment Act 2002. This article explains the impact of these new rules on your business. It also examines how, as an employer, you can turn the new employment legislation to the advantage of your business.

In order to understand how to use the new employment regulations to your advantage, we first need to look at how the new laws differ from the old employment legislation.

In the old days, an employee might be dismissed without an appeal and the first sign of trouble for the employer wouldn't come until the employee put in a claim for unfair dismissal.

Or an employee might have been unhappy and so decided to resign. Sometime afterwards, you as the employer could suddenly find the employee putting in a claim for constructive dismissal.

For the employer, written procedures provided a good defence but employment tribunals still made their own decisions and defending your business could cost a lot of time and money.

With all this in mind, the Government decided to do something to reduce the number of employment tribunal claims. In doing so, they ended up introducing thirteen new ways that an employee can claim against an employer at an employment tribunal!

All these new ways of claiming at an employment tribunal are based on documentation. For example, the tribunal will look at whether certain letters were written and why, or they will ask for proof of whether a meeting was held at a sensible time and place.

The new employment laws mean that if the paperwork is not right, then the employment tribunal can class the employer as guilty – without the need for a hearing!

In exchange for this, the new legislation gives employers new ways of protecting themselves against tribunal proceedings. To understand how you can protect your business, we need to take a look at the new employment regulations in more detail.

The new employment regulations state that employees can no longer claim constructive dismissal unless they can show that they have tried, and failed, to resolve the problem with their employer.

Employees can no longer claim against their employer for unfair dismissal unless they can show that they have exhausted every appeal procedure offered by their employers and still failed to resolve their differences.

However, if an employer does not have a written dispute resolution procedure then the employee can go straight to an employment tribunal and obtain an automatic award!

On that basis, it should be obvious that all employers need to issue a dispute resolution procedure to all their employees in order to avoid the risk of automatically losing at an employment tribunal.

The good news is that a dispute resolution procedure needn't be that difficult to implement.

The most basic dispute resolution procedure is simply a structure by which an employee can register a complaint against you. This need be nothing more than a statement from you, the employer, saying “If you have a grievance or feel you have been wrongly disciplined, then put any appeal or grievance in writing to me.�

However, what if it was you who had carried out the disciplinary in the first place – and, let's face it, in a small company this is quite likely to be the case. Would an employment tribunal consider this to be fair?

Possibly not. But all that the law actually says is that the dispute resolution procedure should be “as fair as possible�.

So, as an employer, can you make better use of the employment legislation than this? Is there an easy way to ensure that you have a dispute resolution procedure and that it will be considered fair by an employment tribunal?

The answer, fortunately, is yes. All you need to do is to arrange for an outside person or organisation to be the point of contact to whom grievances can be directed. Then just state this in your dispute resolution procedure.

Once you have done that, you are almost there. All that remains is to make sure you use all the right bits of paperwork that are required by the new employment legislation whenever you are dealing with a disciplinary matter.

This includes ensuring that any disciplinary meetings are notified to your employees in writing and that you give them at least 48 hours notice of the meeting. You also have to make sure you explain the reason for calling the disciplinary meeting and give the employee copies of any documentation that will be discussed during the meeting.

One of the easiest ways to achieve all this is to use a good quality online personnel system. Such a system will allow you to generate employment contracts for your staff online. It will include in these contracts all the details of your disciplinary procedure, along with details of a third party organisation to whom employees should address any grievances.

In the event that you need to discipline an employee, a fully-featured online personnel system will allow you to generate all the necessary letters and documents automatically, thus ensuring your business complies with the new employment legislation.

The costs of such a system are surprisingly low, especially when you compare them against the costs of having a full-time personnel department within your own organisation – something which is usually prohibitively expensive for most small businesses.

The Employee Contracts website at www.employee-contracts.co.uk gives more information on how online personnel systems work and can help you find a professional employment law consultant to offer advice on protecting your business with one of these systems.

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David Miles is the editor of the Employee Contracts website which provides information on HR and personnel issues such as: contracts of employment, disciplinary procedures, and staff dispute resolution.

Copyright 2005 David Miles. You are welcome to reproduce this article on your website, so long as it is published "as is" (unedited) and with the author's bio paragraph (resource box) and copyright information included. In addition, all links to external websites must be left in place.