The report, Managing Conflict at Work, reveals conflict at work costs the average employer surveyed around 350 days of management time every year, as well as annual costs associated with employment tribunal claims of about £20,000, rising to over £210,000 for those employing 10,000 or more people.
Around one-third (29%) of employers believe disputes are less likely to be resolved informally following the introduction of the statutory dispute resolution procedures in October 2004, which introduced minimum three-step disciplinary and grievance procedures.
The survey also reveals that many employers report increases in the number of formal disciplinary and grievance cases since the introduction of the statutory procedures. The statutory grievance procedure has caused considerable problems, with 42% of employers now more likely to resort to legal advice to ensure they don’t fall foul of the regulations when dealing with staff complaints.
Ben Willmott, CIPD Employee Relations Adviser and author of the report, says: “The statutory dispute resolution procedures have led to a formalisation in how conflict is managed because employers are afraid of falling foul of the law. But an early intervention and informal resolution by managers is usually much more effective.
“The Department for Trade and Industry should consider going back to the drawing board when they review the statutory procedures later this year. They have failed to reduce the burden on the employment tribunal system, adding to the complexity of tribunal hearings, as well as creating additional problems for employers by making managing conflict at work more bureaucratic.
“Employers must provide the relevant training for line managers and invest in mediation if they are serious about reducing the damage caused by conflict at work in terms of wasted management time and the high costs associated with tribunal claims.
“Workplace disputes also generate very significant hidden costs through their negative impact on employee morale and motivation, absence levels, staff retention and employer brand.
“While most organisations train managers to use disciplinary and grievance procedures too many are failing to recognise the value of mediation and training in dealing with conflict more generally.”
Impact of Statutory Procedures:
- - 18% of organisations say the statutory procedures have led to an increase in the number of formal disciplinary cases, with just 3% reporting a decrease.
- - 28% believe the statutory procedures have led to an increase in the number of grievance cases, with just 1% identifying a decrease.
- - Around one-quarter of respondents feel the statutory disciplinary and grievance procedures are complex or very complex to apply.
- - One in ten (11%) employers report that the statutory procedures have made tribunal hearings more complex.
- - Mediation training is much more common among public services organisations (53%), particularly when compared to manufacturing and production (15%).
- - Employers win nearly two-thirds (65%) of the tribunal claims that do go to hearing but this drops to 59% for private services and to 24% for organisation employing 50 people or under.
- - Nearly a quarter of public services respondents rate their managers as poor when it comes to resolving disputes informally, compared to just 12% of respondents from manufacturing and production organisations.
Size of Organisation
- - Conflict at work costs employers of 50 or fewer members of staff an average of 17 days in management time and nearly £3,000 in costs associated with employment tribunal claims each year.
- - Each year conflict at work costs employers of between 51 and 250 employees an average of 72 days in management time and more than £13,000 in costs associated with tribunal claims.
- - Conflict at work costs employers of between 251 and 500 members of staff an average of almost 230 days in management time and £14,500 in costs associated with employment tribunal claims each year.
Other Survey Findings:
- - Organisations providing mediation training received on average 3 employment tribunal claims in the last 12 months, compared to an average of 3.5 claims received by those that don’t.
- - Organisations that recognise trade unions for collective bargaining purposes receive more employment tribunal claims than those that don’t regardless of size or sector of organisation.
- - 89% of disciplinary cases and 86% of grievance cases are resolved without the individual involved leaving the organisation. - Only 30% of organisations rate their line managers as good in managing conflict at work informally.
- - Only 37% of organisations provide training for their line managers in conflict resolution skills.