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October 2004 saw the introduction of the Employment Act 2002, which has brought a new approach to staff dispute resolution. It has long been acknowledged that disputes in the workplace are disruptive, stressful, and costly – both for employers and employees. Once time and legal expenses are taken into account, the average cost of an employment tribunal for a UK employer is £2,000. In addition, it is said that 50% of employees who take a case to a tribunal end up in lower paid or lower status jobs after the hearing, and almost a quarter find themselves unemployed. In a recent twelve month period, the UK employment tribunal service received over 94,000 claims. But research showed that in more than 33% of cases, the employee and his or her manager had not had any prior discussion about the problem. The new legislation in the Employment Act aims to address these problems by:
Since October 2004, all employers and employees have been required to follow a new three-step process when dealing with most dismissals, disciplinary actions or grievances. If they don’t, they could face a financial penalty should a dispute reach a tribunal. The stages in this new three-step process are as follows:
The above standards are intended to be a minimum which must be met by all UK employers. However, so long as these minimum standards are complied with, companies are free to personalise the procedures to suit the needs of their own business. Remember, if a dispute reaches tribunal and one of the parties has not followed the three-step process in full, they will almost certainly face penalties. If an employer fails to follow the new rules, then any award made to the employee by a tribunal will be increased by a minimum of 10% up to a maximum of 50% If the employee fails to follow the procedure, any award they are adjudged to receive is reduced by a minimum of 10% up to a maximum of 50%. In light of the new regulations, all businesses need to:
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