The Employment Relations Minister Edward Davey has announced plans to fund two pilot schemes aimed at bringing alternative dispute resolution into employment disputes.
The schemes, which will run in Manchester and Cambridge, will allow small and medium-sized businesses the opportunity to participate in mediation-networks to help them settle employment disputes quicker and for less money.
The announcement comes off the back of figures which show that there were a staggering 218,000 claims made by employees against employers last year. Each claim costs a small business around £4,000 to defend, and the court system costs the taxpayer some £84m to run.
Criticising the system, Mr Davey identified the hours in lost time and productivity caused by such claims as well as the time it takes managers and HR professionals to sort out the underlying issues.
The present Government has already announced changes to the way the tribunal system operates in order to try to streamline the process.
A major part of the current plans are moves to encourage parties to resolve disputes outside of the court system. One important change is that such disputes now have to go to ACAS for pre-claim conciliation before they can go to tribunal. This should increase the use of mediation, and reduce the amount of claims which go all the way to court.
Now the Government is piloting the greater use of third-party mediation for employment matters. The move has been designed based on positive feedback from employers who use mediation regularly. They claim it is quicker, saves money and boosts staff morale. Evidence suggests that small firms don’t use mediation because it seems difficult to access and because they don’t have an HR department to organise use of the service.
This new scheme is designed to specifically target those businesses in the hope that mediation becomes the default mechanism for resolving most employment disputes.
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