ACAS, the employment Advisory and Conciliation Service, last month issued its report on the first quarter’s figures for the new Early Conciliation procedure.

Why was Early Conciliation Introduced?

Early Conciliation was introduced on 6 April 2014. Its aim was increase the number of potential claims settled without being the need for a formal claim to be issued in the Tribunal, thus reducing the workload of the Employment Tribunal Service. This process replaced the previous system of “Pre Claim Conciliation,” which was offered to all employees and employers on a voluntary basis.

The commencement of Early Conciliation was intended to compliment the introduction of Tribunal fees for Claimants, another measure with the same objective of reducing the number of claims. While ostensibly the latter measure aimed to weed out weak claims, the inevitable effect has been that it has vastly reduced the number of low-value claims (largely irrespective of their potential merit) where the potential reward cannot justify the initial outlay in fees. High value claims have, understandably, continued to be issued.

How does it work? 

Under the new Early Conciliation system, it is compulsory in almost every type of claim for the prospective claimant to make an Early Conciliation notification to ACAS prior to bringing the claim. This triggers a one month pause in the legal time limit for bringing the claim. ACAS will then offer conciliation to both parties. Although neither party is under an obligation to accept the offer of conciliation, the first quarter’s figures indicate that the offer of conciliation has been accepted by both parties in 85% of cases. The conciliation period continues until the parties reach agreement, or it becomes clear that the parties are not willing to settle, or after a maximum of six weeks (the standard one month plus a discretionary two weeks).

What do the figures show?

ACAS reports that 16,605 notifications were made by employees during the first quarter. Of those cases where the conciliation deadline expired during the quarter, approximately 16% achieved settlement through ACAS. It is therefore clear that the introduction of Tribunal fees has been a far more significant factor in the reduction of the number of Tribunal claims being issued – a reported 70% drop overall. The figure is also an interesting contrast to figures issued in 2011 – 2012, which suggested that 80% of matters conciliated by ACAS reached resolution through their auspices. It is probable, however, that this figure resulted from the tendency of litigants to contact ACAS only once they had privately reached agreement, in order to benefit from the free and quick “COT3” method of documenting a settlement instead of the more lengthy and expensive settlement agreement.

What does the scheme offer employers? 

Interestingly, the figures released by ACAS state that a further 540 Early Conciliation notifications were made by employers during the period. This is a surprisingly high figure, given the small number of claims that an employer can issue against an employee in the Tribunal, and the infrequency with which they do so.

It is likely, therefore, that this figure does not in fact represent prospective claims by employers. Rather, it is likely to be take-up of a little known aspect of ACAS’s services; the right of a prospective respondent to contact ACAS and request the services of a conciliation officer where it believes it is likely to receive a claim. The conciliating officer will therefore try to promote a settlement in the same way that they would under the Early Conciliation procedure.

A new service for Respondents?

This is not a new part of ACAS’s offering. Under the previous Pre-Claim Conciliation process, ACAS offered to help settle workplace disputes that could potentially turn into a claim. Indeed, the service offered was arguably wider than under the new system. The current service for employers is limited to cases where the employer believes a claim is likely to be made against it; on this basis, a conciliation officer could reasonably reject the request to conciliate in a potential unfair dismissal situation where the employer has not yet dismissed the employee. The old pre-claim conciliation regime was clearly stated to be available prior to dismissal in a potential unfair dismissal scenario. The pre-claim conciliation regime was withdrawn on 6th April 2014; however, ACAS has stated that it will continue to try to assist with all types of dispute, so it is to be hoped that they will exercise their discretion to conciliate even where they are not strictly required to do under the new system.  One point to note is that, under pre-claim conciliation,  ACAS asked that the parties try to exhaust their internal avenues for settling disputes – such as disciplinary, grievance and appeal procedures – before involving ACAS.

Benefits of the new scheme

Conciliating at an early stage through ACAS has many advantages for employers. It is free; it is neutral and can often help to diffuse an angry situation; and in the vast majority of cases it will be “without prejudice” and off the record (although there have, unfortunately, been exceptions to this).  The low take up for the service, both historically and in the present, is therefore surprising. While it may be inappropriate for complex legal matters, as ACAS cannot offer legal advice, or cases where positions are deeply entrenched, it could well prove helpful in many situations, providing a forum for reasonable discussion and settlement.

Fiona Rushforth, Associate, Wedlake Bell LLP