The British government's attempts to formalise dispute resolution in the workplace have only succeeded in making managing conflict more complex and adversarial, a critical new report has claimed.
The introduction of statutory dispute resolution procedures in October 2004 has failed to reduce the burden on the employment tribunal system and made it less likely that disputes will get resolved informally, according to the Chartered Institute of Personnel and Development (CIPD).
The report, Managing Conflict at Work, reveals that conflict at work costs the average employer 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.
One in three (29 per cent) of the 798 employers questioned for the research believe disputes are now less likely to be resolved informally following the introduction of the statutory dispute resolution procedures.
Many employers complained about increases in the number of formal disciplinary and grievance cases since of the statutory procedures. Just 3 per cent reported any decrease in the number formal disciplinary cases since the introduction of the new regulations.
The procedures themselves have also caused considerable problems, with four out of 10 employers now more likely to resort to legal advice to ensure they don't fall foul of the regulations when dealing with staff complaints.
"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," said Ben Willmott, CIPD Employee Relations Adviser and author of the report.
"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."
In contrast, he argued, an early intervention and informal resolution by managers is usually much more effective than taking formal action.
Such has been the failure of the reforms, he suggested, that the government needs to go back to the drawing board when they review the statutory procedures again later this year.
But at the same time, employers need to do more to provide training for line managers as well as invest in mediation.
Highlighting this, the report found that just three out of 10 organisations rate their line managers as good in managing conflict at work informally, while fewer than four out of 10 (37 per cent) provide training for their line mangers in conflict resolution skills.
"Workplace disputes generate very significant hidden costs through their negative impact on employee morale and motivation, absence levels, staff retention and employer brand," Willmott said.
"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."