Newsletter - Learning Matters - No.2

Statutory Dispute Resolution

The new Statutory Dispute Resolution (SDR) procedures come into effect on 1 October.

Failure to comply with the new SDR procedures means an employee's compensation could be increased by up to 50 per cent. Plus any dismissal by an employer failing to comply will be automatically deemed unfair.

Some organisations will already have disciplinary procedures in place, but the standard dismissal and disciplinary procedure (DDP) and the standard grievance procedure (GP) essentially provide for a written statement of the grounds for the grievance/disciplinary action; a meeting between employer and employee (following which the employee is informed of the outcome and their right to appeal); and an appeal.

But HR now has more to think about.

In all the scenarios outlined in the first column of the chart (below), the employer has not complied with the relevant GP/DDP.

The consequences could be far-reaching. First, any dismissal would be automatically unfair and second, any compensation awarded to the employee may be increased by up to 50 per cent - ie, an award of £100,000 for unlawful discrimination could rise to £150,000.

The moral of this tale is simple: SDR will make significant changes to the way employment relations are conducted. Unfortunately, these changes are not obvious, but may ultimately have very costly consequences.

In anticipation of the SDR procedures coming into effect, we suggest employers take the following steps to ensure they are not caught out:

  • Review all policies relating to dismissals (ie, not just disciplinary) and to whom they apply in light of the DDP requirements
  • Review your grievance procedure without delay
  • Review all contracts of employment to ensure they provide the written particulars required under section 1 of the Employment Rights Act 1996
  • Review retention of employment records - the extension of time limits means that documents should now be kept for longer in case of tribunal claims
  • Provide appropriate training for managers dealing with these procedures on the ground.

How to deal with disputes:

How some common scenarios might be dealt with today How you will have to deal with the same scenarios from 1 October
There are complaints about an employee who has joined. The employer decides to terminate the employee's contract with immediate effect. The employer's disciplinary procedure does not apply to probationary employees The DDP will apply during someone's probationary period, even if an employer's normal disciplinary procedure does not apply. The employee cannot bring a 'normal' unfair dismissal claim but, depending on the circumstances, they may be able to bring a claim which requires no qualifying service (eg discrimination, whistleblowing dismissal, or breach of contract)
A grievance is received from an employee who left almost three months earlier, complaining of 'constructive unfair dismissal'. Since there is a three -month time limit for claiming unfair dismissal, the employer decides to bin the grievance rather than deal with it. The time limits for bring tribunal claims are automatically extended by three months in certain circumstances; including when a grievance under the GP is sent to an employer within the normal time limits for bringing a claim. Further, the GP applies to post termination grievances.
An employer is carrying out a small redundancy exercise involving 10 employees. There has been proper consultation, but the employees demand a reconsideration of the decision to make them redundant. The employer refuses. The DDP applies to any dismissals and requires an appeal. There has been a failure to provide an appeal here.
An employee is under performing. The employer decides to move them into a different role, taking away those duties it considers they are not properly fulfilling. The DDP applies to dismissal and 'relevant disciplinary action'. Relevant disciplinary action includes action short of dismissal on the basis of conduct or capability (excluding paid suspension and warnings). It may therefore cover the situation where someone's duties are changed due to performance.
An employer decides it wishes to terminate the engagement of a long-standing agency worker. It asks the worker's agency to terminate the engagement. Depending on the circumstances, the agency worker may be found to be an employee. If so, no procedure has been applied to the termination.

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