Early conciliation: one year on
As a brief reminder, early conciliation is a mandatory process that most prospective claimants have to participate in before they can issue a claim in an employment tribunal. It gives an employer and an employee the opportunity to reach a settlement before a claim is issued. Further information on early conciliation can be found in our article.
Between April 2014 and March 2015, Acas dealt with over 83,000 cases of early conciliation, with three out of four employees and employers attempting to conciliate.
Of the early conciliation notifications received between April 2014 and December 2014:
- 63% did not proceed to a tribunal claim
- 15% resulted in a formal COT3 settlement through early conciliation, and
- only 22% progressed to a tribunal claim. Note that of the 22% in which a claim was issued, 51% subsequently settled with the assistance of Acas.
What does this mean for employers?
Clearly you don’t need us to tell you that the introduction of early conciliation has resulted in a significant decline in claims proceeding to a full tribunal hearing. Many employees chose not to pursue a claim even where conciliation was unsuccessful, for many this will be because of the introduction of fees. But there are still large numbers of employees attempting to pursue employment claims through Acas. For employers, knowing your options, your negotiating position and above all, the right time to settle, is key.
What's the right timing?
Many employers faced with potential claims will see a tactical advantage in waiting to see if a claim is issued and a fee paid - based on the statistics that a claim may not materialise. But if a claim is issued, it will be too late to settle through early conciliation, and business costs and time may escalate.
Often there are merits to settling early, even before the early conciliation process has started. Protected conversations can, in certain circumstances, enable employers to broach the prospect of an employee leaving their role (more often than not with compensation under a settlement agreement), without fear of a tribunal claim. But before you go down this route, it’s important to know the potential pitfalls - for example, what legal claim may be alleged and is a protected conversation allowed with this claim?
If you are considering terminating an employee’s contract, or you are concerned you may face a potential claim, it’s important to seek advice early on to avoid costly mistakes.