The government has launched a wide-ranging review of dispute resolution in the workplace as employment lawyers warn that the present system is complex, expensive and creates more problems than it solves.


Led by Michael Gibbons, a former director of communications at Powergen, the review is to look at how the system can be simplified so that disputes are resolved without recourse to tribunals. It will analyse all aspects of the system, including legal requirements and how to make the regulations clearer for employers and employees alike.



The launch came as research carried out by City law firm Lewis Silkin, Barclays Bank and the Centre for Effective Dispute Resolution showed that dealing with a disgruntled employee can typically cost up to £277,000 - of which £72,000 is management time. Early mediation could reduce costs to around £9,000, the study claimed.



Barry Clarke, chairman of the Employment Lawyers Association (ELA) and a partner at national law firm Russell Jones & Walker, said the government had introduced legislation in 2004 in an effort to persuade parties to talk rather than rush straight to a tribunal. 'But the sheer complexity of the new rules, along with the Draconian consequences of non-compliance, has had the reverse effect.'



A survey of the ELA's 4,500-strong membership earlier this year revealed that just 14% considered that the new rules had achieved their purpose.



David Whincup, London head of employment at Hammonds, said the firm was handling an increased workload of cases relating to workplace grievances. But because of the complexity of the procedure, the clients' priority had often become getting the process right rather than reaching a sensible resolution.



He added: 'Jumping through the right procedural hoops has become more important than issues of right and wrong.'



Joe O'Hara, a solicitor at trade union firm Thompsons, said: 'Seen from the perspective of the complainant, the penalty for getting the procedure even slightly wrong is disproportionate - you're disqualified from bringing your case'.



Jonathan Rayner