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A New Horizon?


A recent survey1 revealed that one of the most damaging business disputes facing corporations in the UK today is an internal conflict with an employee. The survey found that a typical case can cost £277,000 from beginning to end, although if mediated and resolved in the early stages the cost was around £9,000.

Against this background, it is not surprising that the Department of Trade and Industry have confirmed that there is to be a review of the options for simplifying and improving all aspects of employment dispute resolution as introduced by the Employment Act 2002 (Dispute Resolution) Regulations 2004.

Regular readers will recall that the Regulations introduced new statutory dispute resolution procedures in October 2004, and these procedures must be followed when an employer contemplates dismissing or disciplining an employee. The statutory grievance procedure was introduced within the same legislation and must usually be followed where an employee has a grievance that could form the basis of a claim. However, the procedures have been found to be cumbersome and uncommercial. The Government characterised them as “an honest attempt” to improve the employment tribunal system but recognised that they needed to consider whether they had got it right – the review is the opportunity to do that.

Most practitioners and employers welcome the review as it is a widely held view that the stated aims of the regulations to reduce tribunal claims and improve standards of dispute resolution in the workplace simply do not work. The recommendations for change are expected in spring of this year.


Compensation limits increase in February

The new limits will apply in relation to dismissals that take effect on or after 1 February 2007.

Maximum amount of a week's pay (for the purpose of statutory redundancy or basic award) increases to £310

Maximum compensatory award increases to £60,600

Family friendly provisions

The government's stated aim of being more family friendly continues apace in 2007. In April changes to maternity, paternity, adoption and parental leave come into effect – the amending regulations will remove the current 6 month service requirement for additional maternity leave and allow mothers to work up to 10 “keeping in touch days” during maternity leave. The changes will apply where the expected week of childbirth or adoption falls on or after 1 April 2007. Similarly, Statutory Maternity Pay and Statutory Adoption Pay is extended to 39 weeks for mothers where the expected week of childbirth or adoption falls on or after 1 April 2007. For fathers, there is a new right to an additional period of paternity leave for fathers. This will enable fathers to benefit from leave and statutory pay if the mother returns to work before her maternity leave period ends.

The right to request flexible working will be extended to carers of adults with effect from 6 April 2007.


The Information and Consultation of Employees Regulations 2004 will apply to all businesses with 100 or more employees with effect from 6 April 2007. This continues the implementation of the regulations which oblige employers to establish a formal information and consultation procedure upon formal request. The Regulations will apply to businesses with 50 or more employees in April 2008.

Diversity and Equality

In October the Commission for Equality and Human Rights will be established providing a single equality body with responsibility for all types of discrimination.

1Survey reported in December 2006 conducted by the Centre for Effective Dispute Resolution, Barclays Bank and Lewis Silkin

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