Dispute resolution reforms � more red tape

The Forum of Private Business (FPB) is warning that proposed changes to the dispute resolution process could make a bad situation even worse for many small firms.

The Forum of Private Business (FPB) is concerned that replacing the current mediation process with a new Advisory, Conciliation and Arbitration Service (Acas) code of practice will add to the existing problems faced by small businesses.

"The revised code is shorter than the current code but it is the phraseology that needs to be simplified so that smaller organisations, which may not have human resources input, can more easily understand what is being proposed," said the FPB’s Legal Adviser, Ross Meadows, of Mace and Jones solicitors. "Although the intention of the code is to encourage businesses and individuals to resolve disputes internally, it must be remembered that this was also the intention of the statutory dismissal and grievance procedures. A cause for concern is that we are reverting back to the pre-2004 position."

The Acas code of practice is being brought into force by the Employment Bill, which is currently being read in Parliament. The FPB believes the government’s plans to plough £37m into Acas should be put on hold until the code of practice is re-written to better support small firms.

In the FPB’s latest survey of members, Referendum, 92 per cent of respondents insisted that any changes must reduce the administrative burden created by employment law. However, the FPB is concerned that, under the existing proposals, mounting red tape for small firms will be just one barrier:

•      The code of practice is aimed at medium to large businesses, rather than small firms.

•      The procedures for businesses are unclear, with many grey areas.

•      There is no evidence of any real support to help small businesses with employment problems.

•      The number of cases going to employment tribunals are not likely be reduced.

•      Red tape will increase and costs incurred by small businesses will also not be reduced.

Statistics from the Employment Tribunals Service show that, during 2007, there were 132,577 employment tribunal claims – a leap of more than 15 per cent from 2006. The biggest increases came from equal pay claims, which, with 44,013 claims, rose by a massive 154.9 per cent. Sex discrimination cases virtually doubled, from 14,250 claims in 2006 to 28,153 over the last year. The number of claims for unfair dismissal also increased.

In addition, 30 per cent of all calls received by the FPB’s legal helpline in December 2007 were related to employee conduct and discipline – an increase from the same period in 2006.

Assistance on this matter, and a range of employment issues, is available in the form of the FPB’s Employment Guide and legal helpline, which can help small firms to avoid the many employment law pitfalls.

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