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Early conciliation: our experiences

The ACAS Early Conciliation regime is now 6 months old. The scheme was introduced in April 2014 but only became compulsory on 5 May 2014.

The ACAS Early Conciliation regime is now 6 months old. The scheme was introduced under the Enterprise and Regulatory Reform Act 2014 on 6 April 2014 but only became compulsory for anyone considering making an employment tribunal claim on 5 May 2014.

The scheme promised to fundamentally re-shape how we think about litigation in employment claims, pushing alternative dispute resolution to the forefront of the process. So how are things going? We take a look at the statistics and pause to reflect on our own experiences of the early conciliation since its inception back in the spring.

The statistics

ACAS has very recently released its first figures on the operation of the early conciliation scheme. The figures released cover the first quarter of the scheme’s operation; 6 April 2014 to 30 June 2014. Whilst acknowledging that the scheme is in its early days, ACAS have hailed the figures as a 'promising start'.

What is clear from the statistics is that uptake has been good. ACAS states that it received approximately 1,000 notifications a week during the month of April (when the scheme was voluntary) rising to 1,600 per week once notification became mandatory in May. This is apparently in line with the numbers of notifications ACAS expected to receive. Given that the scheme is now a compulsory precursor to a claim however, it is hardly surprising that engagement has been high.

While it is mandatory for a prospective Claimant to notify ACAS that they intend to bring a claim, neither party to the dispute is obliged to use the service. However, ACAS is encouraged that only 7% of employees and 9% of employers rejected the offer of early conciliation outright. The vast majority were willing to engage in at least preliminary discussions to determine whether early conciliation was appropriate.

The parties have a maximum of one month to conciliate under the scheme, extendable by 14 days if there is a real prospect of settlement when that initial period expires. The statistics show that, during the first quarter of the scheme 11,355 cases reached the end of their conciliation period. Of these, 16.5 per cent resulted in settlement.

However, the ACAS report really fails to put this figure into any kind of context. Is it encouraging or disappointing? Above or below what was anticipated? It may well be too early to extrapolate the rate at which the scheme is able to turn requests for early conciliation into settlements.

Interestingly, of those cases that did not settle, 19 per cent told ACAS that they did not intend to take further action. This suggests that almost a fifth of cases that fail to settle at early conciliation ‘fade away’ before they reach tribunal. However, ACAS are keen to stress that this is an informal indication only and some may change their minds.

Furthermore, in some cases, negotiations may continue once the early conciliation period has ended, either resulting in informal settlement or settlement via COT3 at a later date. The recent statistics are of course unable to account for these.

Also, the statistics do not tell us anything about the nature or quality of the settlements achieved. Many potential claimants will not have received any legal advice on making first contact with ACAS. Many employee organisations have commented that while reaching a settlement is good in principle, some employees may feel rushed by the system into striking a 'bad deal'.

Our experiences

Since the early conciliation scheme came into effect in April we have handled and advised upon countless early conciliation requests on behalf of clients of all sizes. Below we share the lessons we’ve learned from navigating the system so far.

Claimants are taking the process seriously

Before the scheme came into effect, early conciliation was dismissed by many as simply an additional 'hurdle' to be cynically leapt before making a claim. Many felt it would do little to bring about real cultural change. However, our experiences suggest that employees are entering into the process open to the prospect of settlement and with a real will to negotiate (although expectations are not always realistic). The cost of making a claim is obviously a significant driver behind this engagement. However, there is a feeling that many prospective claimants are simply keen to get issues 'off their chests' pre-claim. Others are seeking guidance as they simply don’t understand what to do next.

You are engaging – but not initiating

In our experience, very few employers have chosen to initiate the early conciliation process, instead preferring to adopt a 'wait and see approach'. This is born out by the ACAS statistic that of over 16,000 enquiries to the service just 540 came from potential respondent employers.

However, when a request is received, we have found that respondents usually choose to get 'stuck in' at least to the extent of gathering basic details of the potential claim and hearing what the claimant has to say. Our team reports that many potential respondents value the chance to give managers a 'steer' on tricky cases and to intervene at an early stage before an issue escalates. You have also told us that you've found early conciliation to be a useful method of resolving 'simple' claims (for example where a payment is unambiguously owed to an employee) at the earliest possible stage.

That said, many of you have told us that you have sometimes found it difficult to extract from ACAS or the prospective claimant sufficient detail to determine whether conciliation is appropriate, meaning that negotiations have often stalled before they have really had chance to get going.

Obviously, every case is different and there is no ‘one size fits all’ approach to early conciliation. Seek specific advice about the circumstances of each case. If you are thinking of initiating early conciliation with an employee please do not hesitate to contact us to discuss your options.

ACAS is coping – most of the time

We are pleased to report that fears that ACAS machinery would creak under the pressure of a large volume of early conciliation requests has proved unfounded so far. It is generally fairly easy to contact the assigned ACAS conciliator and to progress matters if appropriate. Only in a very small minority of cases have we found it difficult to move forward negotiations when necessary. Although one of our litigators has come across a case where the early conciliation process was closed without contact being received from ACAS, despite the respondent's wish to participate, this appears to have been an isolated incident.

Some cases are 'slipping through the net'

Under the early conciliation scheme, the claimant must include on their employment tribunal claim form a unique reference number to evidence that contact has been made with ACAS. However, we have come across cases of Tribunals accepting claim forms without a reference number, even where it is clear the mandatory scheme applies. This is surprising given that the new procedural rules give Tribunals an express power to reject a claim that does not carry this basic minimum information. Often it has been necessary to request a costly and inconvenient preliminary hearing to determine whether the claim should be accepted. Only time will tell whether this is simply 'teething trouble' or a fundamental flaw in the operation of the system.

Limitation frustration

As anticipated, calculating limitation under the new early conciliation scheme is fraught with difficulty. Our litigators have reported that is often difficult to get their hands on the information they need (primarily the early conciliation certificate from ACAS) to work out exactly when a claim falls due. Again, it has often proved necessary to request a preliminary hearing to get to the bottom of the crucial issue of whether a claim is ‘out of time’.

There is still confusion over 'unusual' cases

Whilst the wheels of early conciliation are generally turning smoothly in respect of ‘standard’ Tribunal claims such as unfair dismissal and discrimination we have found that ACAS are occasionally coming unstuck when dealing with claims that involve more unusual elements. For example, one of our Liverpool team reported a protracted and confusing exchange with both ACAS and the Tribunal to determine whether early conciliation was in fact mandatory in a particularly complicated matter.

What does the future hold?

We have not yet seen any employment tribunal cases on the finer points of the scheme’s operation, for example where a dispute arises about time limits or whether an employee’s notification to ACAS properly 'covers off' any subsequent claim brought. It is inevitable that some satellite litigation will arise from a scheme that is so procedurally complex and so pivotal to access to justice.

In the coming months and years it will be interesting to see what proportion of employees who seek early conciliation go on to submit employment tribunal claims. This will be a crucial statistic in judging the impact of early conciliation. Broadly speaking, the lower this number the more emphatically it can be said that the scheme has achieved the Government’s aim of reducing Tribunal traffic. It is as yet too early for ACAS to provide sound data on this as, for many cases which went through early conciliation in the first quarter of the scheme, there is still time for a claim to be submitted.

Measuring the ongoing impact of Early Conciliation is likely to be very difficult. Before the scheme was introduced its potential impact was discussed largely in terms of a reduction in claims rather than, more positively, in terms of settlements achieved. The introduction of fees in the employment tribunal just over a year ago has, by itself, driven down claim volumes by as much as 80%. Any additional impact early conciliation may have in reducing use of the system will be difficult to quantify.

It may ultimately prove impossible to definitively pronounce whether the scheme has proved a 'success' as there are so many variables at play.

If you have any queries about early conciliation or how we can help please speak to your usual Weightmans contact.