The introduction of this radical piece of legislation and change to employment procedure is a far reaching change to the industrial system since its conception. This Bill was launched by the previous Government in April 1994 and subsequently adopted by the present Government. The Bill aims, in the words of the then Parliamentary Under Secretary for Employment Anne Widdecombe,

"to review the operation of the industrial tribunals with a view to identifying any changes which would help them to cope with the increasing volume and complexity of cases with reduced delays, while containing demands on public expenditure"

The number of registered cases for 1989/90 were 34,697 which more than doubled to 71,661 during 1993/94, more recent figures show that the 100,000 barrier has been reached, although only approximately one third of these cases proceed to a hearing. This, as we understand, has resulted in at 64% increase in the cost to the tax payer. IDS reported that in 1995 throughout England and Wales 50% of cases fail to go to a full hearing within 26 weeks.

The legislation starts by re-naming what was the industrial tribunals to that of employment tribunals. It appears the objective of the previous Government was to not only reduce delays and costs but to reduce the overall case load of the Advisory Conciliation and Arbitration Service, hereafter referred to as 'ACAS'. To achieve this meritorious aim by way of providing better information and guidance to employers by promoting the use of internal company procedure and compromise agreement. The previous Government proposed to set up a working group to raise awareness of good employment practice. to encourage employees to resolve their disputes with employers and to enter into a grievance procedure.

However, since most employees that our organisation deals with are employed by small firms, that do not even have a basic written contract of employment, it is not likely without major media coverage that it will have the intended impact on employment practice. Since our organisation represents mostly employees a good code of practice is welcomed as employment practitioners, like myself, would have to bring the lack of a grievance procedure code of practice to the attention of the tribunals; so from that respect it may have an impact. We would almost certainly have to take this line to protect our client because the idea behind the encouragement to resolve disputes internally was to impose a penalty on the applicant, by losing two weeks pay, if they fail to use internal complaints procedure, under Clause 13.

There is also the option of compromise agreements under Clause 9, which most arbitration practitioners will understand as 'without prejudice' negotiations, or Calderbank letters. This is where parties or potential parties can 'contract out' of their statutory employment rights by entering into a compromise agreement or contract under ERA 1996 s203(3) and (4) SDA 1975 s77, RRA 1976 s72 TULRCA 1992 s288 or DDA 1995 s(2).

The words 'compromise agreement' are used in relation to all claims under ERA 1996. Claims under SDA 1975, RRA 1976 TULRCA 1992 and DDA 1995 the pertinent phrase is 'compromise contract'.

This overview does not lend itself at this point to give the essentials of a valid compromise agreement. Prior to ERDRA 1998 practitioners carried out this statutory procedure through ACAS and any agreement was done on a COT3 through the tribunal as a stay to proceedings.

On a personal level I have laudable concern about this new procedure resulting from the fact the Act has specified certain rules to be independent advisers, these are: qualified layers (that includes solicitors and barristers in practice) and other authorised litigators or advocates. The later part is where my concern imputes. This is because some organisations that have lay advocates have not formulated a procedure to specify competent advisers, which the Act required inter alia. This is where the difficulty lays and may place lay advocates' clients at risk of a tactical disadvantage when apostrophising costs if an offer to settle is made through a compromise agreement or contract. Indeed, was this the intention of the previous Government as a means to close the floodgates? As I understand it the Secretary for State of Trade and Industry can specify by order competent persons to carry out compromise agreements, but having recently written to the Secretary of State under the new Government, his reply did nothing to change my view as the responsibility for this was placed firmly at the door of the organisation. Which brings me back to my original concern.

It is understood that the Institute of Legal Executives have become an authorised training provider. With this in mind, I suggest that the Chartered Institute of Arbitrators diversify into this area of arbitration and actively promote the Institute and its members as a training provider as this would raise public awareness Indeed, there is the provision for arbitration as an alternative to the employment tribunal by virtue of the ERDRA 1998 Clause 7. At a recent users group seminar run by the Employment Tribunal Service, I was advised that there is a pilot scheme running throughout the London region. Nevertheless, having been in contact with the ACAS conciliator, I am advised that this has always been an option throughout ACAS who, it is understood, have a panel of external Arbitrators, although it is not often used as an alternative. It is suspected that with the onset of this legislation larger employers may use arbitration as an alternative because employment tribunals are open to the public, as opposed to arbitration being in private.

It is envisaged that larger companies will start to write arbitration clauses into the contract of employment as a high profile case may draw media attention that neither party may want, as publicity has its ramifications for both parties, for obvious reasons. Having been advised by an employment tribunal chairman that these types of clauses will not oust the jurisdiction of the employment tribunal, as arbitration must be requested by both parties through ACAS, some case law on this point is expected.

There is very little information as yet on the new arbitration scheme and no information whether the arbitrator will get his powers from the ERDRA 1998 or any of the Arbitration Acts, in particular the Arbitration Act 1996. The idea of arbitration as an alternative was given a comprehensive examination in work by Professors Jon Clark and Roy Lewis in a booklet known as Employment Rights Industrial Tribunals and Arbitration: The Case for Alternative Dispute Resolution, published by the Institute of Employment Rights 1993. It was set out in a green paper of the following year 'Resolving Employment Rights Disputes: Options for Reform' Cmd. 2702, 1994.

The proposal that arbitration might be offered as an alternative to resolving unfair dismissal cases was widely supported, subsequently the DTI issued a consultative document 'Resolving Employment Rights Disputes' in July 1996. It is understood from that that the new Government supported a private members bill in which the arbitration alternative was given legislative effect by allowing ACAS to produce a scheme and enabling an application to settle a dispute by means of a process rather than a consideration. ACAS were given the task of drafting the scheme and obtaining the Secretary of State's approval. It appears, on reflection, the philosophy of formulating a scheme to make it similar to arbitration in trade disputes, which was instrumental in Lewis and Clark advocating arbitration as an alternative because it is speedy, informal, confidential and non-legalistic. This we know was the principal behind arbitration at conception, although it is widely believed among practitioners that arbitration is a semblance of litigation and have become legalistic. The scheme as, we understand it, will be for unfair dismissal cases, although there is provision in the Act to extend jurisdiction. It appears the main argument for limiting the scheme to unfair dismissal is that the bulk of cases do not have complex legal argument and decisions would depend on experience and wisdom as opposed to legal aptitude. It is understood that there will be no jurisdictional issues such as qualifying service, whether the applicant is an employee etc if a dispute is referred to arbitration.

There must be an agreement with both parties to opt for arbitration. Once there is an agreement to opt for arbitration the case will be barred from the employment tribunal, although I reiterate that this may become a legal argument per se, given my conversation over the ousting of the employment tribunal with a tribunal chairman. The access to arbitration will be through a compromise agreement of through an ACAS conciliation officer, and will be the responsibility of the conciliation officer to appraise the parties of what it entails. We understand there is likely to be a time limit for referring to arbitration once the parties have agreed to go to arbitration, with standard terms of reference which will in theory ask the question should the decision to dismiss be revoked, stand or stand with compensation. Written submission over and above to IT1 and IT3 will be invited but not a requirement. The right to appeal will only be on a serious irregularity or point of law, as it is intended for the decision to be final and binding. Interim relief may be granted on application. Consolidation of cases will be allowed with the consent of the parties. Finally, an award can be enforced through the court, which de facto is the same position regards an award through the employment tribunal. It appears the ethos is much the same as the principles of the Arbitration Act 1996 and the reform of the legal system as recommended by Lord Woolf.

Such as, should the Secretary of State have powers to remove an arbitrator for serious irregularity?

Should the standard be 'reasonable band of response'. Should it refer to the ACAS code and/or handbook?

How could appeals be limited to serious irregularity? Probably through the Arbitration Act 1996.

Currently will arbitration be on employers premises? It is unlikely to be acceptable as impartial and will probably be in hotels or ACAS premises.

There are currently 42,000 unfair dismissal cases per year, approximately 27,000 are unfair dismissal alone, of which around 8,800 go forward to a full hearing.

How does an arbitrator deal with parties who delay reaching agreement on date of hearing? It is suspected the arbitrator will be given powers to hear a case ex parte, through the normal procedure of giving the offending party alternative dates with a caution for failing to attend, before proceeding to the High Court for further powers.

Do you have them or not?

Should an arbitrator have powers to compel witnesses to attend? payment of witnesses expenses?

There will need to be a panel of scheme arbitrators recruited in an open and non-discriminatory manner. This means a person specification will have to be drawn up.

Is there a simplified means of calculation of compensation while keeping to the same limits as tribunals?

This piece of legislation has given the new employment tribunals further powers which are as follows:-

Clause 2(3)(a) accommodates the new right of the tribunal to hear cases on written submissions alone "... the determination of proceedings without any bearing (an in private) where the parties have given their consent (whether or not they have subsequently withdrawn it). This appears to be attractive to an applicant reluctant to attend the tribunal hearing, or where they are unable to secure representation. Nonetheless, this strikes one as going down the same road as the Social Security Tribunals, which on a personal level would not advocate, as experience has shown the tribunal abdicating its inquisitorial role, subsequently may restrict or miss an important piece of information and misdirect itself on the law giving rise to a challenge for an error in law. Indeed, criticism or concern was uttered in the House of Lords stage of the Bill by Lord Thomas of Gresford, concerned that applicants should not be able to waive their rights to a full public hearing without first obtaining legal advice.

Lord Thomas was also concerned about the provision in Clause 2(3)(b) allowing an application to be dismissed where "it appears from the application made by the person... that they are not seeking any relief which an employment tribunal has power to give or that he is not... entitled to any such relief'."

As Lord Thomas justly pointed out, such situations "may well be the subject of considerable argument in a complex case". Therefore, legitimate concern that common sense will prevail at the tribunal as there must be concern for the unrepresented applicant. Likewise there must be common sense on behalf of experienced representatives and must not be used to circumvent necessary preliminary hearings.

If the respondent has done nothing to contest the complaint against them, the employment tribunal can determine in their absence where it is clear from written evidence that the applicant's case will succeed. This must be a welcome provision for applicants and representatives.

Likewise, where it appears the applicant has no case it is bound to fail due to a decision of a superior court under Clause 2(3c)a the employment tribunal can dismiss the case, but again Lord Thomas felt there may be "cause of injustice" if proceedings were attenuated or dismissed merely because of a binding decision, as this would deny an applicant the right to challenge precedence in the normal course of proceedings and may give rise to appeal at the Employment Appeal Tribunal.

The old type of industrial tribunal was made up of a chairman, which would be an experienced lawyer of 10 years standing, plus wing members, which are justly balanced between representatives of both commerce and the unions. Clause 3 extends the categories of complaint where the chair must sit alone, unless he/she chooses to exercise discretion and sit as a full tribunal. The categories are specified as relatively straight forward proceedings or a certain technical case on points of law, where the lay wing members experience will be of little relevance.

Clause 5 contains a provision to create a new subordinate chairman to deal with routine interlocutory matters, which as we understand are bogging down many of the chairs throughout England and Wales, and will have reduced powers. The new legal officer will be authorised litigators or authorised advocates, as defined by virtue of s.119 of the Courts and Legal Service Act 1990. They will have powers to grant postponements and extension of time, make witness orders and dispose of cases being withdrawn, but will not have powers to conduct a full hearing.

Clause 11 extends the powers of conciliation officers to allow conciliation in statutory redundancy payment cases. The idea behind this is to reduce 10% of cases going to tribunal.

There was an oversight which led the Employment Appeal Tribunal not having jurisdiction to hear appeals on contractual issues, this has retrospectively been corrected by special amendment.

Slack v Greenham (Plant Hire) Ltd [1983]

ICR 617; [1983] IRLR 271, EAT

Freeman v Sovereign Chicken Ltd [1991]

ICR 853; [1991] IRLR 408, EAT

Employment Rights Act 1996 s203(3)

Sex Discrimination Act 1975 s77

Race Relations Act 1976 s72

Trade Union and Labour Relations

(Consolidation) Act 1992 s288

Disable Discrimination Act 1995 s9(2)