Dispute management – It’s good to talk

Posted on 16 Nov 2009 by The Manufacturer

If scarce credit, curtailed insurance, cautious consumer spending, indefinite market uncertainty, slashed investment budgets and all the rest of it wasn’t quite enough, there’s something else that manufacturers might have to suffer during the credit crunch; recessions provide optimum breeding conditions for disputes, says Mark Young.

The way in which workplace disputes are dealt with changed in April of this year, following the Dispute Resolution Review – an independent study commissioned by the then Secretary of Trade and Industry Alistair Darling. The Review recommended a host of changes to the way that ACAS (Advisory, Conciliation and Arbitration Service) – the independent and impartial nondepartmental dispute resolution service backed by the Department of Business, Innovation and Skills – conducts itself. These include changes to ACAS’s code of practice and a revision to its non-statutory guide.

The point of the changes is said to be to simplify the process of dispute management so that conflicts 40 have a better chance of being dealt with internally.

Convoluted statutory procedures which were deemed to be weighted against employers have been dropped in favour of non-statutory guidance on what constitutes “fair and reasonable” action. The new code focuses heavily on mediation – a service ACAS itself can provide.

The new way had best be effective because there’s fair demand for it. ACAS says its helpline handled 100 per cent more calls in the year to March 2009 than it did in the previous year, with 10,000-15,000 individual calls coming in per week. Employee tribunals were up 18 per cent while unfair dismissal claims were up 22 per cent.

Says ACAS chairman Ed Sweeney: “The consequences (of the downturn) for many employers and workers have been clear – job insecurity, battles over pay and tensions in the workplace.”

It is certainly fair to say that many manufacturing sites will not have been blessed with the happiest of atmospheres over the last year and a half. The latest figures from EEF, the manufacturers’ organisation, covering the three months to the end of October, show four out of five UK manufacturers are now freezing pay. This has led the average settlement to remain at a historically low level of 0.3 per cent for the third consecutive month. Official figures from the office for national statistics show there were 2.63 million employee jobs in manufacturing industries in the three months to August this year, down 223,000 on a year earlier.

So disputes are inevitable during the current economic climate then? Maybe. But the attitude of ‘prevention is better than cure’ must be adopted and there are a few simple and easy bits of housekeeping which can minimise the risk of disputes occurring and, when they do, stop an already inconvenient dispute becoming even worse – a hostile dispute that could end in tribunal.

The best way to avoid disputes and minimise the effects of the ones that will inevitably rear their heads is to instil a certain culture within the company.

That culture, according to Keith Mizon, director of individual dispute resolution at ACAS, is one of open and honest communication.

“Communication breeds trust,” he says, “and trust breeds empathy. If employees are in tune with the company’s goals they are more productive and happier in their work. Disputes are therefore less likely to occur than in a place where employees do not know what is expected of them and what the state of play is for the business.” Murray Meeuwis, development director at HR Insights – a subsidiary of Kingston Smith LLP – is a man of Mizon’s own ilk. Tony Blair once famously proclaimed: “education, education, education.” Just as vociferously, Meeuwis expounds: “communication, communication, communication.” Here are a few ways to keep the conversation flowing:


Mediation, ACAS says, is ‘morally binding but has no legal status’. It is generally supposed to be a fast and informal way of feuding parties finding a way that they can restore a functional working relationship. “A resolution that doesn’t serve either party perfectly but is one that both parties can live with is sometimes better than no resolution at all,” says Mizon.

It works by bringing in a third party to listen to both parties side of the story and then attempting to reunite them with shared interests and a common goal.

There is statutory and non-statutory mediation. The former is for when an employee tribunal is imminent.

ACAS is obliged to begin a mediation programme as a last attempt at reconciliation. The latter can take place at any point in a dispute on a voluntary basis.

A survey on the effectiveness of mediation by the Chartered Institute of Personal Development (CIPD) conducted a survey into the benefits of mediation on firms who had experience of it. Eighty-three per cent of respondents said it improved relations between staff. Sixty-three per cent said it helped to retain valuable employees, 55 per cent said it developed an organisational culture that focuses on managing and developing people, and 33 per cent said it helped to reduce sickness absence.

ACAS outlines a general five step guide for how mediation will be carried out, consisting of an initial meeting between the mediator and each party involved in the dispute separately and four meetings with both parties present thereafter. The process is designed to allow both parties to express their true concerns and ‘shift the focus from the past to the future and begin to look for constructive solutions’. The organisation says “the beauty of mediation is that this is a process that can be introduced at any stage of a conflict” though the earlier it is brought into a dispute the more effective it is.

Some firms try to train mediators internally and often choose human resource managers for the role. The Ministry of Justice advocates this too. It says: “It’s good to have a cross-section of staff trained as mediators, because then you have got all levels of the department working with mediation and promoting it. If you do have a mediation involving a senior member of staff, then it can help to have a senior mediator.” “You have to be a bit careful though,” warns Mizon.

“Both sides have to fully trust the mediator.” Accreditations and recognised mediator registers are available and should be researched if a third party is to be appointed as go-between.

Similarly, it is “sensible”, in Mizon’s view, to provide workers with a route to voice their concerns. Things like appointment based surgery sessions, regular appraisals, open group forums and employee morale surveys show workers that the company is open to feedback. This may mean a potential grievance is brought to the fore and solved before it evolves into a more difficult situation.

“People like to feel listened to,” says Mizon. “And valued too. Their grievance may be displaced but providing them with a route to discuss it at least shows the company is reasonable enough to discuss concerns, even should it not ultimately share them.”

Clarify expectations…
Companies must clearly set out what they expect of employees and just as clearly identify how they, the company, will behave in return.

Internal codes of conduct will inspire trust in employees that the company can be held to account if it does not keep its side of the agreement and can act as a safety valve for the company to justify why certain action has been taken. When the expectations are set in stone, well documented and ingrained into the company culture, you’ve got a point of reference for when it’s time to give the drunken sailor a taste of the old Captain’s Daughter.

…and clarify procedures
“Small firms often fall foul because they don’t have decent grievance procedures in place, they don’t use them or they don’t train their managers properly to implement them properly.” Make sure that everybody knows exactly what the standards are and exactly what the process is when those standards are not met, with no ambiguity or grey areas.

“If you don’t have proper procedures in place it can be difficult to underline the problem in the first place and then determine how to address it,” says Mizon.

Keith Mizon feels it most prudent to warn smaller companies especially that they need decent procedures in place as, he says, they are disproportionately over-represented in employee tribunals. If a small firm does not have the knowledge or expertise to draw up their own procedures they should outsource the job to a private firm or get help from organisations like EEF or ACAS itself.

Don’t brush bad news under the carpet
“Constant communication is vital, even if the message is not good news,” says Murray Meeuwis.

“The effect on employees is ten times worse if they are told nothing at all rather than being informed of negative circumstances.

“Invariably what sometimes happens is leaders retreat into the office and close the door rather than stand up and face the music. But it is uncomfortable situations which require strong leadership most of all and a true leader must be able to step out of his or her comfort zone. People will make assumptions and will usual jump to the worst case scenario.

They will start focussing on other things other than getting the company back on track because they are distracted by rumour.” Do not lose sight of longer term goals, he says.

“Talk about the better times ahead and reaffirm the vision.

“People need to connect to positivity. If they see no future they become demotivated and lose empathy for the cause. Remind people of their potential; what they can achieve; what they and the company can become together.”

Meeuwis says the more senior people that can be seen on the shop floor the better. And as regularly as possible too, as it gives the impression that everybody is truly involved in the same process, rather than a situation where two differently coloured collars are working independently of one another.

Disputes in the workplace can be a minefield.

The best form of defence is diffusion. Communication could just be the tool that stops the bomb from going off.