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Dispute resolution procedures are failing, says DTI

'Well intentioned, but flawed'

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Workplace dispute resolution procedures are flawed and have caused poor results, according to a review (pdf) commissioned by the Department of Trade and Industry (DTI). The review has called for the complete repeal of the current procedures.

Though Michael Gibbons, who conducted the review commissioned by DTI minister Alistair Darling, said the 2004 Dispute Resolution Regulations were well intentioned, he said they had failed.

"In conducting the review I was struck by the overwhelming consensus that the intentions of the 2004 regulations were sound and that there had been a genuine attempt to keep them simple, and yet there is the same near unanimity that as formal legislation they have failed to produce the desired policy outcome," said Gibbons in his report. "This is perhaps a classic case of good policy, but inappropriately inflexible and prescriptive regulation.

"The key message from this review is that inflexible, prescriptive regulation has been unsuccessful in this context and it follows that the measures to be used in future should be much simpler and more flexible – and therefore will offer rather less certainty and predictability in their operation," he said.

The review has recommended that a free system of resolution and mediation be made available in cases where early resolution may be possible. "Government should increase the quality of advice to potential claimants and respondents through an adequately resourced helpline and the internet; and offer a free early dispute resolution service, including where appropriate mediation," he said.

"My vision is of a greatly increased role for mediation. Encouraged by signs of success in the context of employment disputes elsewhere in the world, I commend increased use of mediation to employers, employees and practitioners in Great Britain," said Gibbons.

Gibbons' attack on the mediation service comes just weeks after a report (pdf) by the Chartered Institute of Professional Development revealed that many more employers think the statutory procedures make formal disciplinary hearings and grievances more likely than the number that think them less likely.

According to a survey conducted by the body, 28 per cent of employers think the procedures have led to an increase in the number of grievances, while only one per cent think they have led to a decrease. It found that 18 per cent think they have led to an increase in the number of formal disciplinary cases, while only three per cent think they have led to a decrease in those cases.

The survey also found that 29 per cent of employers believed disputes that do arise are less likely to be resolved informally than they were before the statutory procedures were put in place.

Disputes can be expensive for employers. The CIPD says that they eat up 350 days of management time a year and that employers spend £20,000 a year on employment tribunals, costs which rise to £210,000 a year for those employing more that 10,000 people.

Report author and CIPD employee relations adviser Ben Willmott recommended similar measures to Gibbons when the report was published. "The Department for Trade and Industry should consider going back to the drawing board," he said. "They have failed to reduce the burden on the employment tribunal system, adding to the complexity of tribunal hearings, as well as creating additional problems for employers by making managing conflict at work more bureaucratic."

The DTI said it will change the way dispute resolution works, and has launched a consultation with industry on the issue. "Workplace disputes are expensive and wasteful for employers and stressful for employees," DTI minister Alistair Darling said. "We want to find the best way to reduce the numbers, get them solved earlier, and keep the system fair for everybody."

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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