ACAS and early conciliation

The ACAS Early Conciliation Rules (the Rules) come into force on 6 April 2014 – they are optional for the first month and become mandatory on 6 May.

The Rules will theoretically mean ACAS being more involved in Employment Tribunal proceedings.


The current role of ACAS

ACAS (which stands for the Advisory, Conciliation and Arbitration Service) was founded in 1975 and is largely funded by the Department for Business, Innovation and Skills (BIS) but is a non-departmental body, governed by an independent council.

At the moment ACAS provides a variety of HR related services, including an advice line for employers and employees, training and workplace mediation. It is probably best known for its conciliation service, which is used to settle employment claims through a ‘COT3 Agreement’ which is similar to a settlement agreement (formerly known as a compromise agreement).


What claims can currently be settled through ACAS?

A large number of potential employment-related claims can be settled through a settlement agreement or through ACAS using a COT3 agreement, including claims for unfair dismissal, discrimination, statutory redundancy payments, and claims in relation to the national minimum wage.

Some employment-related claims can only be settled through ACAS and not under a settlement agreement. These are claims for:

  • a failure to inform and consult with representatives on collective redundancies;
  • a failure to inform and consult or to pay compensation equivalent to a protective award in relation to a TUPE transfer; and a contravention of certain rights under the Agency Workers Regulations 2010.

Some claims do not appear to be capable of being settled. These are:

  • unpaid statutory maternity pay, paternity pay and adoption pay as it is not possible to contract out of these payments; and
  • the failure to notify the right to request working beyond retirement, and breach of the right to be accompanied at a meeting to discuss retirement.


The future role of ACAS

Although ACAS is often involved in employment disputes its role to date has been entirely at the discretion of the parties involved. From 6 May 2014 (and on an optional basis during the trial period from 6 April to 5 May), the parties will go through early conciliation (EC) with ACAS before proceeding to a formal claim in the Tribunal. After the trial period ends, claimants will not be able to file a claim with the Tribunal unless they have an EC certificate number from ACAS.

A couple of points to consider before starting EC:

  • the claim must be for relevant proceedings – this basically means those claims which are capable of being settled or are not ‘exempt’;
  • the claim cannot be against the Security Service, Secret Intelligence Service or GCHQ;
  • if the claimant is applying for interim relief they do not need to go through the EC procedure; and
  • the claimant must ensure the claim is against the right employer - we can see there being issues in practice on this point where, for example, claimants give ACAS details of administrators of their employer, a previous employer after a TUPE transfer, or incorrect group companies.

ACAS will also be able to conciliate in either of the following two cases:

  • A request by a potential respondent for a conciliation officer to conciliate in respect of a matter which is likely to give rise to relevant proceedings; or
  • A claimant can request EC in relation to exempt proceedings (i.e. where early conciliation is not required).

Exempt proceedings include those where another claimant with the same claim against the same employer has already complied with the EC requirement or where ‘relevant proceedings’ are submitted on the same ET1 as claims that are not ‘relevant proceedings’.


How will it work in practice?

As a first step, the prospective claimant will need to complete a short form and send it to ACAS. This form will just ask for the name, address, and telephone numbers of the claimant and respondent(s) – no description of the dispute itself. If the form doesn’t contain the correct information, ACAS will either reject and return it, or will contact the claimant and complete it over the telephone.

The form will be available on the ACAS website and can be submitted online or by post, but claimants will also be able to telephone ACAS on a dedicated early conciliation telephone number and have the details taken over the telephone.


What happens after the claimant submits the initial form?

ACAS will contact the claimant within two days of receipt of the initial form to obtain further details and to see if the claimant is willing to enter into early conciliation. If so, ACAS will complete an early conciliation form and if the claimant is willing to conciliate, will allocate a conciliation officer to the case. This officer will, with the claimant’s consent, approach the respondent to see if it is can conciliate to try and reach settlement.

The two possible outcomes are then either to settle the claim or to be issued a certificate with an EC number. No claim (unless it is exempt) can proceed to the Tribunal without this number.

On the issue of incorrect respondents, we will be interested to see what will happen where the officer contacts the potential respondent and is told that it is not the Claimant’s employer. ACAS cannot give legal advice to claimants but presumably ACAS will repeat to the claimant what the potential respondent has said, issue a certificate and the claim will then proceed to the Tribunal where the respondent can then submit a response detailing why it is not the correct respondent. Otherwise ACAS will run the risk of giving legal advice to claimants. It will be interesting to see whether a certificate is still issued where an employer denies knowledge of an employee, or tells ACAS that another company is the employer. In the latter case, in our opinion ACAS should give the claimant an EC certificate in relation to the first potential respondent so as not to prevent the claimant from filing a claim against that respondent but should encourage the claimant to complete another initial form with a different employer and start the process again.

Tribunals have the power to add and substitute parties on their own initiative. We wonder whether parties being added to the litigation will also go through a conciliation period. There are various scenarios involving incorrect respondents and parties being added or substituted which may present problems or case management decisions for the Tribunal, which has no direct power to order a conciliation period but could arguably use its ‘overriding objective’ to deal with cases fairly and justly to order that a conciliation period be put in place with a new respondent which was not previously aware of the claim.


When is a certificate issued?

Although even the ACAS website states that this will be a work-in-progress and is not entirely clear upon how the procedure will work in practice, it seems to us that a certificate will be issued in the following situations:

  •  The ACAS officer cannot get in touch with the claimant or the respondent (currently there is no guidance upon how many attempts at contact they should make);
  • Either the claimant or the respondent states that they don’t want to conciliate;
  • The ACAS officer concludes that the parties’ positions are so far apart that they cannot reach agreement; or
  • Settlement is not reached by the date that the prescribed period expires (this is the period of one month from the day after the claimant’s submission of the initial form, but may be extended if both parties consent and the ACAS officer considers there to be a reasonable chance of settling).


What about limitation periods?

The limitation period (three months) is effectively paused during the prescribed period. If the limitation period would expire during the prescribed period, then it is extended by one month from the date of receipt of the EC certificate.


What does it all mean?

The EC procedure is part of the Government’s drive to reduce the number of claims being brought in the Tribunal. Other initiatives have included extending the period of service required to bring most claims to two years, and charging claimants fees to bring claims in the Tribunal.

The fees have proved the largest deterrent to claims being brought, with a 75% drop in claims brought in October-December 2013 (the quarter after fees were put in place) compared to October-December 2012. Given this existing decline in claims we are not sure whether, realistically, the EC procedure will actually entail any further decrease in claims.

As respondents know that claimants will have to pay a fee to bring a claim after the EC procedure has been followed we are a little dubious about how many respondents will engage in the conciliation procedure especially as they will still be able to settle at any time before the hearing. Respondents will also know that claimants (and in particular unrepresented claimants) will doubtless be keener to settle for a lower figure later on in the process, having seen witness statements and with a hearing fee of potentially £950 looming.

It seems to us that the EC procedure is actually an ineffective balm being offered by the Government to disgruntled employees as a way to pursue employment-related complaints externally for no charge now that they cannot pursue a tribunal claim without paying a fee. We foresee there being a lot of satellite litigation about limitation periods, the identity of the respondent, and the procedure, and not necessarily any great effect upon the number of claims brought and defended.

For more details or advice upon early conciliation or any aspect of employment law please email or call us on 0113 203 1269


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