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New ACAS Arbitration Scheme

From Summer 20001, a new voluntary arbitration scheme comes into effect, designed to be an alternative to tribunal proceedings for resolving unfair dismissal cases.

The scheme is voluntary, so no-one can be required to use it. it only applies to unfair dismissal cases, so where there is a claim that covers other matters as well as unfair dismissal (e.g. discrimination, underpayment of wages, claim for notice pay), only the unfair dismissal element can go to arbitration and the rest must still go to tribunal.

The scheme avoids the use of formal pleadings, formal witness statements and documentary procedures. Strict rules of evidence will not apply. Instead of applying legal precedent, general principles of fairness will be taken into account. For this reason, we would urge caution in agreeing to go to arbitration - the tribunals at least are applying case law precedent, whereas arbitration is to be decided "on general principles of fairness and good conduct in employment relations" - whatever the arbitrator thinks that means.

The arbitrator can award compensation and/or reinstatement or re-engagement in the same way as a tribunal. But awards are final, with very limited opportunities for a part of appeal or otherwise challenge the result.

By agreeing to go to arbitration, parties are taken to agree that there are no jurisdictional issues in dispute. if, therefore an employer is challenging whether the worker was an 'employee', whether the worker had the necessary continuous service for the claim, whether there was a dismissal, or whether the claim was made in time, the employer should not agree to go to arbitration.

Cross-examination of parties and witnesses is not allowed, so unless the facts are undisputed, we would not recommend using arbitration. It appears there will be no effective procedure for challenging an opponent or witness who is thought not to be telling the truth.

In most cases, the key uncertainties arise because of difficulty in predicting the findings of fact that will be made by the tribunal. In arbitration, the arbitrator is responsible for asking the questions so as to determine the facts. But all proceedings and decisions of arbitrators are confidential, so we will never build up a body of information about how they decided on cases. It therefore seems that the 'lottery' of arbitration will be substantially greater than that of tribunal.

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Employment Tribunal Changes

With effect from 18 April 2001, new rules of procedure for employment tribunals give greater powers to the tribunal on case management and to weed out unmeritorious cases. Key element are:

• where an opponent's case appears hopeless, a party can apply for a pre-hearing review, and if the tribunal agree that the case does not have reasonable prospects, can require the opponent to pay a deposit. The amount of deposit that can be ordered has been increased from £150 to £500.
• the unreasonable behaviour of a representative can now be taken into account when awarding costs against a party
• the tribunal itself can award costs of up to £10,000 (p from a maximum of £500).
  The pre-hearing review is a powerful tool to weed out hopeless cases, but not evidence can be heard by the tribunal at the review. So a thorough and complete paperwork trial through the investigation, disciplinary and appeal process is essential to getting an order for a deposit against an applicant. Good paperwork habits can really cut the costs of tribunals and help to get cases thrown out at an early stage.

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