ACAS Early Conciliation – A guide for Employers and Employees

On 6 May 2014 it became compulsory for conciliation to be attempted through ACAS before bringing an Employment Tribunal claim.  In this article we explain how Early Conciliation works, and what employers and employees need to know.

What is Early Conciliation?

ACAS Early Conciliation requires employees and employers to attempt conciliation through ACAS before claims are issued in the Employment Tribunal (with some exceptions).

Early Conciliation was first introduced on 6 April 2014 and became mandatory for claims issued on or after 6 May 2014.  The Early Conciliation process will result in the issue of an ACAS Early Conciliation Reference Number, without which it is no longer possible to issue an Employment Tribunal Claim.

How does Early Conciliation work?

The vast majority of cases will be started by the employee filling in and submitting an Early Conciliation Notification Form, but there is also scope for an employer to contact ACAS to start the process.  This might happen if they think that they are likely to receive a claim from an employee or ex-employee.

An ACAS Conciliator will then contact both parties to gather information about the potential case and seek to “talk through the issues to see if a solution can be found”.

If one or both parties indicate that they do not wish to participate in Early Conciliation, ACAS will issue an early conciliation certificate which brings the process to an end.

If both parties indicate a willingness to conciliate, ACAS will spend up to a month assisting settlement negotiations.  This month may be extended once only (by up to 14 days) if both parties agree.  The parties don’t have to physically sit down together as part of this process – ACAS will usually conduct matters by telephone or email.

  • If agreement is reached during this period, ACAS will prepare a legally binding COT3 agreement in which the employee will sign away their right to bring a future claim, usually in exchange for a payment from the employer
  • If no agreement can be reached, or if ACAS consider that there is no prospect of settlement, they will issue an early conciliation certificate which brings the process to an end

If the conciliation process has been unsuccessful and the employee subsequently wishes to issue an Employment Tribunal claim, they will need the unique reference number shown on the early conciliation certificate to do so.  Without this number any claim will be automatically rejected by the Tribunal.

How does Early Conciliation affect the Limitation Period for bringing an Employment Tribunal Claim?

Employment Tribunal claims are subject to limitation periods (usually 3 months) after which an employee cannot bring a claim.  Submitting the Early Conciliation Notification Form “pauses” the limitation clock and it only restarts if Early Conciliation fails, from the date of issue of the early conciliation certificate.

If the time left to bring a claim was less than 1 month at the date of “pausing the clock”, it will be increased to 1 month once the clock restarts to give the employee time to take legal advice.  However, this isn’t a “get out of jail free” card, as a claim that was already out of time cannot be brought back into time this way by adding a month – it will still be too late to bring a claim.

The Limitations of the ACAS Conciliators

ACAS have fulfilled the useful role of conciliators for years, and making the process mandatory just formalises their involvement.  It is important for both parties to understand the limitations on what ACAS are actually allowed to do, which hasn’t changed.

ACAS are allowed to:

  • explain how the conciliation process will work
  • encourage both parties to follow existing internal procedures, such as raising a grievance and holding formal grievance or disciplinary hearings
  • explain the process that will be followed if the case goes to Employment Tribunal
  • explain options such as formal arbitration if this is relevant
  • put the views of each party to the other
  • discuss proposals for resolving the issues

ACAS are NOT allowed to (and they make this very clear in their guidance):

  • advise either party to make a proposal to the other
  • advise either party on whether to accept a proposal by the other
  • take sides
  • represent either party
  • help prepare a Tribunal claim or prepare a defence to a Tribunal claim
  • advise whether a claim has any merit or whether it should be made at all
  • give an opinion on the likely outcome of any Tribunal claim

We can see that ACAS are there to facilitate the process of discussion and negotiation but cannot provide advice or opinions to either side that would help them to reach a decision – this is up to the parties themselves.  Proper legal advice will continue to be an important part of the decision making process

Early Conciliation – Important Advice for Employees

The biggest advantage of Early Conciliation for employees should be the opportunity to reach a settlement with their employer without incurring any costs.  Fees were introduced in the Employment Tribunals on 29 July 2013, so conciliation provides an opportunity to reach an agreement before having to pay either the Tribunal Fee or any legal fees.

So what could go wrong?  Well there are some pretty big pitfalls waiting to trap the unwary employee.

Firstly, as an employee you are at a huge disadvantage to your employer when it comes to your knowledge and experience of employment law.  Your employer will almost certainly take legal advice, and if they don’t it will probably be because they either have in-house expertise or have dealt with issues in the past.  Important points you should consider are:

  • how do you know whether you actually have a case (and not just a gut feeling)?
  • are you going to ask for too much money and waste your time on a negotiation that will never settle?
  • even worse, are you going to ask for too little money and settle for a figure much lower than you should really receive?
  • do you understand all of the potential claims that you might have if you issue an employment tribunal claim, or might you miss out on something important?
  • what is your relationship like with your employer – are you capable of dealing with the pressure if they start to use heavy handed negotiation techniques?
  • if you reach a settlement and sign a COT3 agreement, what happens if you realise you have made a mistake or missed out something important?  The COT3 will probably mean you can’t bring a claim any more and you can’t ask for more money.

The obvious message here is that to get the best result you should take professional legal advice before attempting conciliation.  Proper advice will give you a clear idea of the realistic value of your claim, which will be crucial in achieving a fair settlement.

If the conciliation process doesn’t succeed then the time spent with your adviser will have been an excellent investment.  They will be well placed to take over negotiations with your employer using their professional negotiation skills, and if these negotiations still don’t succeed they will have most of the information they need to prepare your Employment Tribunal claim.

Early Conciliation – Important Advice for Employers

Put bluntly, Early Conciliation will be of little benefit to you as an employer.  Why is this?

Under the old system, if your employee wanted to issue an Employment Tribunal claim they would normally take legal advice first.  This would usually result in you receiving a written grievance, or if not, the first you would hear would be when you received a copy of the ET1 claim form from the Tribunal.  Either way, you would have an indication of the issues in writing and could then prepare a proper response, normally after getting your own legal advice.

Under the Early Conciliation system, you are expected to enter into a negotiation to settle a claim that you have not yet seen.  For all the reasons given above, the employee may have unrealistic or unreasonable expectations and you are being asked to negotiate with them.  If you are lucky, you might find that they are asking for less than they should get, but our experience shows that employees usually overestimate rather than underestimate.

As an employer you cannot be forced to conciliate if you do not want to.  If you take legal advice at this early stage, a specialist employment solicitor will be able to tell you:

  • whether you are likely to gain by negotiating and settling early on, or
  • whether you should see out the claim process as it will likely go in your favour.

This advice is unlikely to be any different because of mandatory early conciliation, so you don’t stand to gain anything from the new procedures.

If you are fortunate and find that the conciliation process works, and you reach an agreement with your employee, beware a final pitfall involving the COT3 agreement that you will be asked to sign.  If you take legal advice, your solicitor will be able to draft the wording for you and will make sure that all potential employment claims are covered under the agreement.  Without this advice, there is a risk that one or more legal claims might be missed.  If this happens, you could end up paying out under the agreement and still receiving a Tribunal Claim at a later stage.

Conclusions

The new system of early conciliation is supposed to save money and time by resolving cases before they go to the Employment Tribunal.  While this is a sensible aim:

  • employees risk losing money by trying to negotiate without understanding their legal position
  • employers risk negotiating a settlement on a claim they haven’t seen which might have no merit

The process can take place without legal advice, but we would be very wary of telling anyone to get involved without properly understanding their legal position.

If you are an employee who thinks that you may have a claim, or an employer who has been contacted by ACAS then please don’t hesitate to contact us today for a free 30 minute consultation.  One of our expert employment solicitors will be happy to help

Tel: 01245 893400

Email: [email protected]

Or use the Enquiry Form on our Contact Backhouse page.

The Backhouse Solicitors Employment Law Team