The ACAS Arbitration Scheme (England and Wales) Order 2001

• Citation: S.I. 2001/1185
• Sections: 184

Section 1 Citation, commencement, interpretation and extent

(1) This Order may be cited as the ACAS Arbitration Scheme (England and Wales) Order 2001 and shall come into force on 21 May 2001.

(2) In this Order—

“the 1996 Act ” means the Employment Rights Act 1996;

“basic amount” means such part of an award of compensation made by an arbitrator as comprises the basic amount, determined in accordance with paragraphs 118 to 134 of the Scheme;

“the Scheme” means the arbitration scheme set out in the Schedule with the exception of paragraphs 43, 94, 159, 162 to 167, 171, 177 and 178 thereof.

(3) This Order extends to England and Wales.

Section 2 Commencement of the Scheme

The Scheme shall come into effect on 21 May 2001.

Section 3 Application of Part I of the Arbitration Act 1996

The provisions of Part I of the Arbitration Act 1996 referred to in the Schedule at paragraphs 43, 94, 159, 162 to 167, 171, 177 and 178 and shown in italics shall, as modified in those paragraphs, apply to arbitrations conducted in accordance with the Scheme.

Section 4 Application of Part I of the Arbitration Act 1996

(1) Section 46(1)(b) of the Arbitration Act 1996 shall apply to arbitrations conducted in accordance with the Scheme, subject to the following modification.

(2) For “such other considerations as are agreed by them or determined by the tribunal” in section 46(1)(b) substitute “the Terms of Reference in paragraph 12 of the arbitration scheme set out in the Schedule to the ACAS Arbitration Scheme (England and Wales) Order 2001”.

Section 5 Enforcement of re-employment orders

(1) Employment tribunals shall enforce re-employment orders made in arbitrations conducted in accordance with the Scheme in accordance with section 117 of the 1996 Act (enforcement by award of compensation), modified as follows.

(2) In subsection (1)(a), subsection (3) and subsection (8), for the words “section 113” substitute in each case “paragraph 102(i) of the Scheme”.

(3) In subsection (2) for “section 124” substitute “section 124(1) and (5) and subsections (9) and (10)”.

(4) In subsection (3)(a) for the words “sections 118 to 127A” substitute the words “sections 118 to 123, section 124(1) and (5), sections 126 and 127A and subsections (9) and (11)”.

(5) After subsection (8) insert—

(9) Section 124(1) shall not apply to compensation awarded, or to a compensatory award made, to a person in a case where the arbitrator finds the reason (or, if more than one, the principal reason) for the dismissal (or, in a redundancy case, for which the employee was selected for dismissal) to be a reason specified in any of the enactments mentioned in section 124(1)A.

(10) In the case of compensation awarded to a person under section 117(1) and (2), the limit imposed by section 124(1) may be exceeded to the extent necessary to enable the award fully to reflect the amount specified as payable under the arbitrator’s award in accordance with paragraphs 110(i) or 113(iv) of the Scheme.

(11) Where—

(a) a compensatory award is an award under subsection (3)(a) of section 117, and

(b) an additional award falls to be made under subsection (3)(b) of that section,

the limit imposed by section 124(1) on the compensatory award may be exceeded to the extent necessary to enable the aggregate of the compensatory award and additional awards fully to reflect the amount specified as payable under the arbitrator’s award in accordance with paragraphs 110(i) or 113(iv) of the Scheme.

(12) In this section “the Scheme” means the arbitration scheme set out in the Schedule to the ACAS Arbitration Scheme (England and Wales) Order 2001.

Section 6 Awards of compensation

An award of a basic amount shall be treated as a basic award of compensation for unfair dismissal for the purposes of section 184(1)(d) of the 1996 Act (which specifies such an award as a debt which the Secretary of State must satisfy if the employer has become insolvent).

Section 1

The ACAS Arbitration Scheme (“the Scheme”) is implemented pursuant to section 212A of the Trade Union and Labour Relations (Consolidation) Act 1992 (“the 1992 Act”).

Section 2

The Scheme provides a voluntary alternative to the employment tribunal for the resolution of unfair dismissal disputes, in the form of arbitration.

Section 3

Resolution of disputes under the Scheme is intended to be confidential, informal, relatively fast and cost efficient. Procedures under the Scheme are non-legalistic, and far more flexible than the traditional model of the employment tribunal and the courts. For example (as explained in more detail below), the Scheme avoids the use of formal pleadings and formal witness and documentary procedures. Strict rules of evidence will not apply, and, as far as possible, instead of applying strict law or legal precedent, general principles of fairness and good conduct will be taken into account (including, for example, principles referred to in any relevant ACAS “Disciplinary and Grievance Procedures” Code of Practice or “Discipline at Work” Handbook). Arbitral decisions (“awards”) will be final, with very limited opportunities for parties to appeal or otherwise challenge the result.

Section 4

The Scheme also caters for requirements imposed as a matter of law (e.g. the Human Rights Act 1998, existing law in the field of arbitration and EC law).

Section 5

As more fully explained below, cases enter the Scheme by reference to ACAS, which appoints an arbitrator from a panel (see paragraphs 35-37 below) to determine the dispute. ACAS provides administrative assistance during the proceedings, and may scrutinise awards and refer any clerical or other similar errors back to the arbitrator. Disputes are determined, however, by arbitrators and not by ACAS.

Section 6 Routing of communications

Unless in the course of a hearing, all communications between either party and the arbitrator shall be sent via the ACAS Arbitration Section.

Section 7 Routing of communications

Paragraph 172 below sets out the manner in which any document, notice or communication must be served on, or transmitted to, ACAS or the ACAS Arbitration Section.

Section 8

The term “Employee” is used to denote the claimant (i.e. the former employee), including any person entitled to pursue a claim arising out of a contravention, or alleged contravention, of Part X of the Employment Rights Act 1996.

Section 9

The term “Employer” is used to denote the respondent.

Section 10

The term “EC law” means:

(i) any enactment in the domestic legislation of England and Wales giving effect to rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Community Treaties, and

(ii) any such rights, powers, liabilities, obligations and restrictions which are not given effect by any such enactment.

Section 11

With the exception of paragraph 21 (i) below (“Requirements for entry into the Scheme”), references to anything being written or in writing include its being recorded by any means so as to be usable for subsequent reference.

Section 12

Every agreement to refer a dispute to arbitration under this Scheme shall be taken to be an agreement that the arbitrator decide the dispute according to the following Terms of Reference:

In deciding whether the dismissal was fair or unfair, the arbitrator shall:

have regard to general principles of fairness and good conduct in employment relations (including, for example, principles referred to in any relevant ACAS “Disciplinary and Grievance Procedures” Code of Practice or “Discipline at Work” Handbook), instead of applying legal tests or rules (e.g. court decisons or legislation);

apply EC law.

The arbitrator shall not decide the case by substituting what he or she would have done for the actions taken by the Employer.

If the arbitrator finds the dismissal unfair, he or she shall determine the appropriate remedy under the terms of this Scheme.

Nothing in the Terms of Reference affects the operation of the Human Rights Act 1998 in so far as this is applicable and relevant and (with respect to procedural matters) has not been waived by virtue of the provisions of this Scheme.

Section 13 Cases that are covered by the Scheme

This Scheme only applies to cases of alleged unfair dismissal (i.e. disputes involving proceedings, or claims which could be the subject of proceedings, before an employment tribunal arising out of a contravention, or alleged contravention, of Part X of the Employment Rights Act 1996).

Section 14 Cases that are covered by the Scheme

The Scheme does not extend to other kinds of claim which are often related to, or raised at the same time as, a claim of unfair dismissal. For example, sex discrimination cases, and claims for unpaid wages are not covered by the Scheme.

Section 15 Cases that are covered by the Scheme

If a claim of unfair dismissal has been referred for resolution under the Scheme, any other claim, even if part of the same dispute, must be settled separately, or referred to the employment tribunal, or withdrawn. In the event that different aspects of the same dispute are being heard in the employment tribunal as well as under the Scheme, the arbitrator may decide, if appropriate or convenient, to postpone the arbitration proceedings pending a determination by the employment tribunal.

Section 16 Waiver of jurisdictional issues

Because of its informal nature, the Scheme is not designed for disputes raising jurisdictional issues, such as for example:

whether or not the Employee was employed by the Employer;

whether or not the Employee had the necessary period of continuous service to bring the claim;

whether or not time limits have expired and/or should be extended.

Section 17 Waiver of jurisdictional issues

Accordingly, when agreeing to refer a dispute to arbitration under the Scheme, both parties will be taken to have accepted as a condition of the Scheme that no jurisdictional issue is in dispute between them. The arbitrator will not therefore deal with such issues during the arbitration process, even if they are raised by the parties, and the parties will be taken to have waived any rights in that regard.

Section 18 Waiver of jurisdictional issues

In particular, in agreeing to arbitration under the Scheme, the parties will be treated as having agreed that a dismissal has taken place.

Section 19 Inappropriate cases

The Scheme is not intended for disputes involving complex legal issues. Whilst such cases will be accepted for determination (subject to the Terms of Reference), parties are advised, where appropriate, to consider applying to the employment tribunal or settling their dispute by other means.

Section 20

The Scheme is an entirely voluntary system of dispute resolution: it will only apply if parties have so agreed.

Section 21 Requirements for entry into the Scheme

Any agreement to submit a dispute to arbitration under the Scheme must satisfy the following requirements (an “Arbitration Agreement”):

(i) the agreement must be in writing;

(ii) the agreement must concern an existing dispute;

(iii) the agreement must not seek to alter or vary any provision of the Scheme;

(iv) the agreement must have been reached either:

(a) where a conciliation officer has taken action under section 18 of the Employment Tribunals Act 1996 (a “Conciliated Agreement”) or

(b) through a compromise agreement, where the conditions regulating such agreements under the Employment Rights Act 1996 are satisfied (a “Compromise Agreement”);

(v) the agreement must be accompanied by a completed Waiver Form for each party, in the form of Appendix A.

Section 22 Requirements for entry into the Scheme

Where an agreement fails to satisfy any one of these requirements, no valid reference to the Scheme will have been made, and the parties will have to settle their dispute by other means or have recourse to the employment tribunal.

Section 23 Requirements for entry into the Scheme

Where:

(i) a dispute concerning unfair dismissal claims as well as other claims has been referred to the employment tribunal, and

(ii) the parties have agreed to settle the other claims and refer the unfair dismissal claim to arbitration under the Scheme,

a separate settlement must be reached referring the unfair dismissal claim to arbitration which satisfies all the requirements listed above (although it may form part of one overall settlement document).

Section 24 Notification to ACAS of an Arbitration Agreement

All Arbitration Agreements must be notified to ACAS within six weeks of their conclusion, by either of the parties or their independent advisers or representatives, or an ACAS conciliator, sending a copy of the agreement and Waiver Forms, together with IT1 and IT3 forms if these have been completed, to the ACAS Arbitration Section.

Section 25 Notification to ACAS of an Arbitration Agreement

For the purposes of the previous paragraph, an Arbitration Agreement is treated as “concluded” on the date it is signed, or if signed by different people at different times, on the date of the last signature.

Section 26 Notification to ACAS of an Arbitration Agreement

Where an Arbitration Agreement is not notified to ACAS within six weeks, ACAS will not arrange for the appointment of an arbitrator under the Scheme, unless notification within that time was not reasonably practicable. Any party seeking to notify ACAS of an Arbitration Agreement outside this period must explain in writing to the ACAS Arbitration Section the reason for the delay. ACAS shall appoint an arbitrator, in accordance with the appointment provisions below, to consider the explanation, and that arbitrator may seek the views of the other party, and may call both parties to a hearing to establish the reasons for the delay. The arbitrator shall then rule in an award on whether or not the agreement can be accepted for hearing under the Scheme.

Section 27 Notification to ACAS of an Arbitration Agreement

Any such hearing and award will be governed by the provisions of this Scheme.

Section 28 Consolidation of proceedings

Where all parties so agree in writing, ACAS may consolidate different arbitral proceedings under the Scheme.

Section 29 Withdrawal by the Employee

At any stage of the arbitration process, once an Arbitration Agreement has been concluded and the reference has been accepted by ACAS, the party bringing the unfair dismissal claim may withdraw from the Scheme, provided that any such withdrawal is in writing. Such a withdrawal shall constitute a dismissal of the claim.

Section 30 Withdrawal by the Employer

Once an Arbitration Agreement has been concluded and the reference has been accepted by ACAS, the party against whom a claim is brought cannot unilaterally withdraw from the Scheme.

Section 31 Settlement

Parties are free to reach an agreement settling the dispute at any stage.

Section 32 Settlement

If such an agreement is reached:

(i) upon the joint written request of the parties to the arbitrator or the ACAS Arbitration Section, the arbitrator (if appointed) or the ACAS Arbitration Section (if no arbitrator has been appointed) shall terminate the arbitration proceedings;

(ii) if so requested by the parties, the arbitrator (if appointed) may record the settlement in the form of an agreed award (on a covering proforma).

Section 33 Settlement

An agreed award shall state that it is an award of the arbitrator by consent and shall have the same status and effect as any other award on the merits of the case.

Section 34 Settlement

In rendering an agreed award, the arbitrator:

(i) may only record the parties' agreed wording;

(ii) may not approve, vary, transcribe, interpret or ratify a settlement in any way;

(iii) may not record any settlement beyond the scope of the Scheme, the Arbitration Agreement or the reference to the Scheme as initially accepted by ACAS.

Section 35 The ACAS Arbitration Panel

Arbitrators are selected to serve on the ACAS Arbitration Panel on the basis of their practical knowledge and experience of discipline and dismissal issues in the workplace. They are recruited through an open recruitment exercise, and appointed to the Panel on the basis of standard terms of appointment. It is a condition of their appointment that they exercise their duties in accordance with the terms of this Scheme. Each appointment is initially for a period of two years, although it may be renewed by ACAS, at the latter’s discretion. Payment is made by ACAS on the basis of time spent in connection with arbitral proceedings.

Section 36 Appointment to a case

Arbitral appointments are made exclusively by ACAS from the ACAS Arbitration Panel. Parties will have no choice of arbitrator.

Section 37 Appointment to a case

Once ACAS has been notified of a valid Arbitration Agreement, it will select and appoint an arbitrator, and notify all parties of the name of the arbitrator so appointed.

Section 38 Arbitrator’s duty of disclosure

Immediately following selection (and before an appointment is confirmed by ACAS), every arbitrator shall disclose in writing to ACAS (to be forwarded to the parties) any circumstances known to him or her likely to give rise to any justifiable doubts as to his or her impartiality, or confirm in writing that there are no such circumstances.

Section 39 Arbitrator’s duty of disclosure

Once appointed, and until the arbitration is concluded, every arbitrator shall be under a continuing duty forthwith to disclose to ACAS (to be forwarded to the parties) any such circumstances which may have arisen since appointment.

Section 40 Removal of arbitrators

Arbitrators may only be removed by ACAS or the court (under the provisions in paragraphs 41 to 43 below).

Section 41 Removal of arbitrators

Applications under the Scheme to remove an arbitrator on any of the grounds set out in sections 24(1)(a) and (c) of the Arbitration Act 1996 shall be made in the first instance to ACAS (addressed to the ACAS Arbitration Section).

Section 42 Removal of arbitrators

If ACAS refuses such an application, a party may thereafter apply to the court.

Section 43 Removal of arbitrators

(1) Sections 24(1)(a) and (c), 24(2), 24(3), 24(5) and 24(6) of the Arbitration Act 1996 shall apply to arbitrations conducted in accordance with the Scheme, subject to the following modifications.

(2) In subsection (1) for “(upon notice to the other parties, to the arbitrator concerned and to any other arbitrator) apply to the court” substitute “(upon notice to the other party, to the arbitrator concerned and to the Advisory, Conciliation and Arbitration Service (“ACAS”)) apply to the High Court or Central London County Court”.

(3) In subsection (2)—

(a) omit “If there is an arbitral or other institution or person vested by the parties with power to remove an arbitrator,”;

(b) for “that institution or person” substitute “ACAS”.

(44) The arbitrator may continue the proceedings and make an award while an application to ACAS (as well as the court) to remove him or her is pending.

Section 45 Death of an arbitrator

The authority of an arbitrator is personal and ceases on his or her death.