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The new ACAS Arbitration Scheme went 'live' yesterday (21st May 2001). It was initially delayed after fears that it would contravene the Human Rights Act 1998.
It is available for unfair dismissal claims only (ie not discrimination, working time, breach of contract etc.) and cannot be used where there are issues as to whether the employee was dismissed, or whether the employee has sufficient continuity of service to bring a claim. The parties must agree to adopt the arbitration route, and it is not appropriate for complicated questions of law (eg TUPE or EC issues). The hearings are private and are inquisitorial rather than adversarial in nature.
A short - and excellent - summary of the arbitration procedure can be found at http://www.oneclickhr.com/hrupdate .
The relevant statutory instrument, namely the ACAS Arbitration Scheme (England and Wales) Order 2001 (SI 2001/1185) can be found at http://www.legislation.hmso.gov.uk/si/si2001/20011185.htm.
ACAS have produced a guide to the arbitration scheme, at www.acas.org.uk/index-11.htm .