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How can you handle grievances effectively? 05/11/2010

Discrimination and employee Tribunals can be a costly business for any employer. So how can employers minimise risk, and what procedures should be put in place to ensure the workplace is fair for all?

How can you handle grievances effectively?

Click to jump to section

  1. Employment tribunals can be costly for businesses
  2. How can employers minimise risk?
  3. Introduce policies & implement training
  4. Create an open culture
  5. How to approach procedures
  6. Procedures in action
  7. Formal procedure - first stage
  8. Formal procedure - appeal
  9. Consider implementing a whistleblowing procedure

Employment tribunals can be costly for businesses

The latest employment tribunal statistics make worrying reading for any company. Individual claims are at a new high. The 2009/10 employment tribunal statistics show that employment tribunals accepted 236,100 claims between April 2009 and March 2010, an increase of 56% on the previous year. Unfair dismissal claims rose to 57,400 compared with 52,700 in 2008/9. Discrimination claims, with the exception of sex discrimination, all rose.

It's not just the number of claims which should make employers nervous; compensation awards can also be high. In 2009/10, the average award for a race discrimination case was £18,584. It was £19,499 for sex discrimination and £52,087 for disability discrimination. The maximum awards were £374,992, £442,366 and £729,347 for race, sex and disability discrimination claims respectively.

The costs of defending an employment tribunal claim can also be high. While the costs involved often run into four, or even five, figures, last year the employee was ordered to pay the employer's costs in just 324 cases and the average award for costs was just £2,288 .

Failure to engage with and attempt to resolve workplace issues before they end up in the employment tribunal risks opening the organisation up to potentially significant financial liabilities. So what, then, can employers do to reduce that possibility of grievances?

How can employers minimise risk?

Between October 2004 and April 2009, legislation required both employers and employees to follow at least a minimum statutory grievance procedure when an employee raised 'a complaint about action the employer has taken, or is contemplating taking, in relation to them'.

From 6 April 2009, the statutory minimum procedures have been repealed and replaced by a revised ACAS Code of Practice on Disciplinary and Grievance Procedures ("ACAS Code") which sets out best practice principles for formulating and operating grievance procedures. If an employer or employee fails unreasonably to comply with the Code, an employment tribunal may increase or decrease any compensation awarded to the employee in respect of a subsequent claim by up to 25%.

Employees no longer have to file a formal written grievance with their employer before bringing an employment tribunal claim. However, it remains the case that many employees do raise their complaints with their employer before bringing legal proceedings, as the ACAS Code encourages.

There are a number of important steps that employers can take to minimise the risk of grievances arising and to protect themselves against tribunal claims.

Introduce policies & implement training

Many workplace grievances arise from simple misunderstandings, clashes of personality, or a lack of understanding of individuals' roles and responsibilities. The potential for such issues arising can be minimised by putting in place clear written contracts and policies. Contracts and policies should be reviewed regularly to ensure that they comply with recent changes in the law. Ensure that the company's policies are communicated effectively to employees so that employees are fully aware of their rights and obligations, and that any key management decisions (e.g. disciplinary issues, promotion, dismissal, pay review, bonus and performance reviews) are documented. 

Train managers and supervisors to deal with any problems promptly and following the correct procedures. Many claims arise because managers fail to deal with employee issues before they become a serious problem. It's often the actions of an untrained manager or other employee that lead to embarrassing tribunal claims.

Create an open culture

It's in everyone’s best interest to ensure that workers’ grievances are dealt with quickly and fairly and at the lowest level possible within the organisation at which the matter can be resolved. Employers should encourage a culture where employees feel able to raise issues.

A formal grievance procedure provides a mechanism for problems and concerns about work, the working environment or working relationships to be dealt with fairly and speedily, before they develop into major issues.

Employers are required in the written statement of terms and conditions of employment to specify, by description or otherwise, a person to whom the employee can apply if they have a grievance.

How to approach procedures

Management is responsible for taking the initiative in developing grievance procedures which, if they're to be fully effective, need to be acceptable to those they cover and those who have to operate them. Senior management should aim to secure the involvement of workers and their representatives, including trade unions where they are recognised, and all levels of management when formulating or revising grievance procedures.

Procedures should be simple, set down in writing and rapid in operation. They should also provide for grievance proceedings and records to be kept confidential. Procedures must reflect the statutory right to accompaniment which applies to grievance hearings.

In order for grievance procedures to be effective, it's important that all workers are made aware of them and understand them and, if necessary, that supervisors, managers and worker representatives are trained in their use.

Wherever possible, every worker should be either given a copy of the procedures or provided with access to it (eg, in the staff handbook or on the company intranet site) and have the details explained to them. For new employees, this might best be done as part of any induction process.

Procedures in action

The ACAS Code recommends that, where possible, grievances should be handled informally in the first instance. If attempts to resolve the problem are unsuccessful, then a formal procedure should be adopted.
Most routine complaints and grievances are best resolved informally in discussion with the worker’s immediate line manager. Dealing with grievances in this way can often lead to speedy resolution of problems and can help maintain the authority of the immediate line manager who may well be able to resolve the matter.  Both manager and worker may find it helpful to keep a note of such an informal meeting.

Where the grievance cannot be resolved informally it should be dealt with under a formal grievance procedure, which requires an initial grievance meeting and an appeal hearing.

Formal procedure - first stage

Workers should put their grievance in writing to their line manager. Where the grievance is against the line manager the matter should be raised with a more senior manager. 

The manager should invite the worker to attend a hearing (ideally within five days of receiving the grievance) in order to discuss the grievance and should inform the worker of his or her statutory right to be accompanied.  At the meeting the employee should be invited to re state the grievance and how they would like to see it resolved.
If any new facts arise during the meeting, the manager should consider adjourning to investigate. The manager should respond in writing to the grievance within a specified time (eg, within five working days of the hearing) and inform the employee of his or her right of appeal.  If it is not possible to respond within the specified time period the worker should be given an explanation for the delay and told when a response can be expected.

Formal procedure - appeal

If the matter is not resolved at Stage 1, the worker should be permitted to appeal to a more senior manager.  The choice of this person will depend on the organisation but could be a departmental, divisional or works’ manager and should be someone who has not previously been involved in the grievance.

The manager should arrange to hear the appeal within a specified period and should inform the worker of the statutory right to be accompanied. 
Following the hearing the manager should, where possible, respond to the grievance in writing within a specified period.  If it is not possible to respond within the specified time period the worker should be given an explanation for the delay and told when a response can be expected.
Records should be kept detailing the nature of the grievance raised, the employers' response, any action taken and the reasons for it. These records should be kept confidential and retained in accordance with the Data Protection Act 1998 and the accompanying Code of Practice on Employment Records.
Organisations may wish to have specific procedures for handling grievances about unfair treatment eg, discrimination or bullying and harassment, as these subjects are often particularly sensitive.  The guidance on the ACAS Code recommends this.

Consider implementing a whistleblowing procedure

Organisations may also wish to consider whether they need a whistleblowing procedure in the light of the Public Interest Disclosure Act 1998. This provides strong protection to workers who raise concerns about wrongdoing (including frauds, dangers and cover-ups).

Sometimes a worker may raise a grievance about the behaviour of a manager during the course of a disciplinary case.  Where this happens and depending on the circumstances, it may be appropriate to suspend the disciplinary procedure for a short period until the grievance can be considered.  Consideration might also be given to bringing in another manager to deal with the disciplinary case.  Where the disciplinary and grievance issues are related it may be appropriate to deal with them concurrently.

Effective handling of grievances will not eliminate the risk of tribunal claims, but it will minimise the risk and make it easier to defend those claims which are brought, as well as improving staff morale.

Clare Gregory, partner, DLA Piper

Clare Gregory, partner, DLA Piper

Clare is a partner with considerable experience in all aspects of employment law, both contentious and non-contentious.