Background

Prior to 6 April 2009, employers were required to follow a minimum statutory procedure before disciplining or dismissing an employee. Similar processes were required when dealing with grievances.

Among other things, this procedure included writing to the employee and inviting them to a meeting, carrying out a thorough investigation, advising them of their right to be accompanied, holding a meeting, informing them of any decision in writing and informing them of their right to appeal. 

Failure to comply with any aspect of the procedure rendered a dismissal automatically unfair, resulting in an employee’s compensation being increased by a mandatory 10-50% (no matter how trivial the breach). Equally, failure to follow the statutory procedures when dealing with a grievance resulted in the employee’s compensation being increased by 10-50% if the employer was at fault and there was a subsequent dismissal.

The statutory procedures were heavily criticised for being too complex, carrying a high administrative burden for employers and employees with the result that the number of Employment Tribunal claims increased.

 
New Legislation

The Employment Act 2008 repeals the statutory dispute resolution procedures in their entirety and introduces a regime based on a new Acas Code for disciplinary and grievance procedures (which is not compulsory or legally binding). Notwithstanding the repeal of the statutory procedures, there are transitional arrangements in place which determine whether or not the statutory procedures continue to apply.

Importantly, under the new regime dismissals will no longer be automatically unfair for a failure to comply with the Code, but Employment Tribunals will still be able increase or reduce compensatory awards. Such adjustments will be by up to 25% (rather than the previous 10-50%) where either the employer or employee has unreasonably failed to comply with the Code and the adjustment is just and equitable in all the circumstances.

The Code of Practice

The Code provides practical guidance on dealing with discipline and grievance issues and the standards of reasonable behaviour which both employers and employees are expected to follow. The Code is supplemented by comprehensive ACAS Guidance which provides more detailed advice on the steps to take.

The Code retains the principle of minimum procedures as were in the statutory procedures but takes a less prescriptive approach than those procedures. It is intended to be “light touch” so that employers and employees can within its framework take a flexible approach to handling disciplinary and grievance matters.

 
The Code sets out five key principles:

 
1. matters should be raised and dealt with promptly;

2. parties should act consistently;

3. employers should carry out the necessary investigations to establish the relevant facts;

4. employers should inform employees of the basis of the problem and allow the employee to put their case; and

5. employees should be allowed to be accompanied at any formal disciplinary or grievance meeting.

Employers should familiarise themselves with the new regime. Contact us for further advice.