New workplace dispute rules to ‘cut costs’

4 November 2008

Changes to the way that workplace disputes are handled could save businesses up to £175 million a year, the government has said.

The reform of the dispute system is included in the Employment Bill, which has reached its third reading in Parliament.

The purpose of the changes is to reduce the administrative burden on employers by encouraging the earlier and less formal resolution of disputes at work.

The new system, which is set to come into force in April 2009, will give employers greater flexibility in developing policies that better suit their workplace.

Acas, the conciliation service, is putting together a statutory code to set out best practice guidelines for employers and will be able to mediate in disputes at an earlier stage.

Specifically, the Bill provides for a revised Acas Code, drafted to be concise and principles-based.

There will be an improved Acas helpline to provide clear advice on options.

Tribunals will enjoy more discretion in adjusting awards, either up or down, if the parties involved fail unreasonably to comply with the revised Acas Code.

Acas will also offer more pre-claim conciliation, and the time limits on post-claim conciliation will be removed.

Other parts of the Bill will toughen up penalties for those who break the law on the minimum wage, increasing the maximum penalty for underpayments or employment agency offences from a £5,000 fine to an unlimited fine. The most serious cases of non-compliance will be tried in a Crown Court.

A fairer method for dealing with national minimum wage arrears will be introduced so that workers do not lose out. And the Employment Agency Standards Inspectorate will get greater powers to investigate complaints about the underpayment of the minimum wage.

Pat McFadden, the Minister for Employment Relations, said: “In the current economic climate, regulations can be a big concern for business and we want to help simplify them where we can. These changes will save employers valuable time and money.

“It’s clear the business community wants to see streamlined, straightforward and effective procedures to deal with disputes and workers want to have good safeguards in place to protect them.”

The minister added: “We’re moving away from the current, rigid legal process for resolving disputes. Instead we’re encouraging employers and employees to come together and resolve their issues earlier and informally.”