The 2004 statutory dismissal and grievance procedures are to be repealed and replaced with a revised Acas Code of Practice, breach of which may lead to an adjustment of up to 25% to the compensation awarded by a tribunal.

Although the Government has still to publish its response to the Gibbons Review of the statutory procedures, its approach is indicated by the first draft of the Employment Bill introduced to the House of Lords in December. The Bill will repeal all of the current provisions relating to the procedures, ie those giving claimants an additional three months to lodge an ET1 in certain circumstances, rendering dismissal automatically unfair for breach of the dismissal procedure, barring claims where a grievance has not been properly raised, and adjusting compensation by up to 50% for breach of the procedures. Instead, the tribunal will have discretion to increase compensation for most tribunal claims by up to 25% if an employer has unreasonably failed to comply with a substantially revised Acas Code of Practice on disciplinary and grievance procedures; similarly a reduction of 25% can be made if the employee has unreasonably failed to comply with the Code. The content of the revised Code is therefore going to be important; a draft of the revised Code should be published for consultation prior to laying it before Parliament, hopefully in the early part of 2008.

The Bill also removes the current provision whereby a dismissal is not unfair simply because of a procedural failing (other than breach of the statutory procedures) provided the employer can show that following the procedure would have made no difference to the decision to dismiss. The law is to revert to the pre-2004 position, such that a procedural failing will render the dismissal unfair but the tribunal can reduce compensation to reflect the likelihood that the employer would have dismissed anyway.

The new regime is unlikely to come into force before April 2009, so employers will need to comply with the existing rules until then.

The Bill also includes provisions to:

  • enable a tribunal to resolve a case without a hearing only if the parties have consented or if each party has the right to request a hearing; the Explanatory Notes state that a new fast track is to be instituted for certain monetary disputes to be decided on paper amend Acas's conciliation duties, so that it has a discretion whether to conciliate pre-claim and a duty to do so from issue of the claim through to its conclusion, ie
  • the current fixed conciliation periods for certain claims are to be removed
  • enable tribunals to compensate workers for additional financial loss suffered due to an employer's unauthorised deduction from wages or failure to pay statutory redundancy pay, eg bank charges and interest
  • strengthen the enforcement regime for the national minimum wage and provide greater compensation to affected workers to take into account the length of time arrears have been owing
  • make changes to the employment agency standards enforcement regime
  • amend trade union membership law to allow unions to expel members for being members of a political party.

The Bill and Explanatory notes are available here.