Current Law on Grievance and Disciplinary Procedures
Immediately before changes were made to the law governing grievance and disciplinary procedures, implemented with effect from 6 April 2009, there were public policy concerns that the employment tribunal system was unable to cope with the flood of new tribunal claims. One of the Government's concerns was that disputes that could easily have been settled informally within the workplace were too readily being brought as tribunal claims with great cost involved.
To address the perceived problems, Parliament enacted the Employment Act 2002 and the Employment Act 2002 (Dispute Resolution) Regulations 2004. Between October 2004 and 6 April 2009 statutory minimum dispute resolution procedures were in force. They set minimum steps for disciplinary and grievance procedures.
During this time an employee was unable to bring an employment tribunal case for discrimination or other in-work matters if he or she had not brought a statutory grievance first. The minimum requirement was for a grievance letter to have been submitted to the employer and for 28 days to have passed. While this represented a potential impediment to employees, requiring that the employer have the opportunity to address the underlying problem, it was balanced by the disadvantage to employers that any employee with one year's service could claim automatic unfair dismissal (with a minimum of four weeks’ basic award ) if the employer failed to follow the statutory dismissal and disciplinary procedures.
The Employment Act 2002 allowed tribunals, at their discretion, to increase or reduce compensation for unfair dismissal, discrimination and other specified employment tribunal claims by between 10 to 50% where a party failed to comply with the statutory dispute resolution procedures.
From 6 April 2009 the law in relation to grievance and disciplinary procedures dramatically changed. The statutory grievance and disciplinary regime was abolished but there are transitional provisions based on the statutory regime that still apply in some cases. These cases are where the relevant trigger event occurred before 6 April 2009.
Both before and after the legislative change which became effective in April 2009, the ACAS Code of Practice on Disciplinary and Grievance Procedures set out basic principles of fair practice and natural justice which should form part of an employer’s procedures. It has been modified to reflect changes in the law. While the ACAS Code is not legally binding it does set out a general standard that an employment tribunal must take into account in deciding any unfair dismissal case. In practice, it is seen as the touchstone of principled personnel practice by the employment tribunals.
ACAS Code of Guidance on Disciplinary and Grievance Procedures (the “Code”)
The new Code came into effect on 6 April 2009 to reflect the legislative changes. It does not apply to redundancy dismissals or to non-renewal of fixed term contracts. The Code has greater importance because since 6 April 2009 it can affect the level of compensation in cases where the statutory dispute resolution procedures no longer apply. An employment tribunal has discretion to increase or reduce an employee’s compensation by up to 25% in any successful case for unfair dismissal, discrimination or other specified cases, for either party’s unreasonable failure to follow the Code. Apart from discriminatory selection for redundancy, where there appears to be a contradiction between the provisions of the Code and statute, compensatory adjustments cover the same sorts of cases as those covered by the statutory dispute resolution procedures.
The new ACAS Code is very short at fewer than 10 pages; the 2004 version was much longer and more detailed in setting clear standards. More detail is in a 70 page guide called 'Discipline and Grievances at Work: the ACAS Guide' (the “Guide”). As tribunals do not have to follow the Guide it is unclear how this may influence cases, but it sets a standard and acts as a best practice framework. ACAS is influential as an organisation and the good standards that it promotes are certainly persuasive if not binding.
Employment tribunals have much discretion in determining how to adjust compensation by reference to the Code’s principles. As a result there is uncertainty about how the law may be interpreted in certain areas. For example, while it is obvious that refusing the employee a right to be accompanied at a disciplinary meeting would lead to additional compensation for the employee if a claim is successful, it is unclear whether the fact that the claimant and his or her representative did not have any influence on the development of rules and procedures would have any similar effect on compensation.
Recommendations for disciplinary hearings in the Code include:
1. where possible, different people should carry out the investigation and disciplinary hearing;
2. the employee should be given sufficient information about the alleged misconduct or poor performance to prepare to answer the case;
3. employees and, where appropriate, their representatives should be involved in the development of rules and procedures;
4. employers and employees should act consistently;
5. employees should be given the right to appeal against any formal decision made;
6. notification of a disciplinary hearing should advise the employee of his or her right to be accompanied by a work colleague or trade union representative;
7. investigations of potential disciplinary matters should be carried out without unreasonable delay.
Most employers will have their own disciplinary rules in the staff handbook. These may be followed provided that they comply with the general standards of fairness set by the Code and, where they continue to apply, the statutory minimum dispute resolution procedures.
Current good practice requires the disciplinary process to be handled without undue delay and with the maintenance of confidentiality. Employees should be given records of hearings. In accordance with the ACAS Code a disciplinary process will include the following stages.
Investigation: the Code says it is important to carry out investigations of potential disciplinary matters without unreasonable delay. Where possible, different people should carry out the investigation and the disciplinary hearing in misconduct cases. This is designed to ensure greater objectivity by the employer in its investigation. The investigation does not have to be carried out in a specific way so that it could, for example, include holding a preliminary meeting with the employee or perhaps just be a simple gathering of evidence.
Minor issues: poor performance and minor misconduct should be dealt with informally by advice or counselling with the emphasis on encouraging the employee to improve. The employee must understand what is to be done to improve and how such improvement will be assessed over time.
Formal disciplinary action: where the matter is not minor, a disciplinary hearing enabling the employee to answer allegations should be held. The Code says that written notice must be given to the employee including notification that he or she may be accompanied. To enable the employee to prepare adequately the notification must give sufficient information about the alleged misconduct or poor performance and possible consequences including copies of any written evidence such as witness statements.
Disciplinary hearing: the Code requires the avoidance of unreasonable delay while allowing the employee reasonable time to prepare her case. The employer must explain the complaint at the meeting and present the evidence while allowing the employee reasonable opportunity to answer questions and present his or her own case.
Suspension: this must be on full pay unless the employment contract says otherwise. If the misconduct is serious it may be fair to suspend but this should be for as short a period as possible and must be kept under review.
Usual disciplinary stages
No employee is generally dismissed for a first offence unless it amounts to gross misconduct.
Informal action: typically used for cases of minor misconduct or unsatisfactory performance where an informal word is used to deal with the difficulty.
First formal action: the disciplinary procedure starts at this stage for more serious problems and will normally take the form of the first written warning. ACAS say that the warning should set out the details of the complaint, the required improvement with timescale, and the right of appeal. The warning should also state that the employee is at risk of a final written warning if there is no improvement. ACAS say that the employee should be told how long the warning will remain current and recommend in the Guide a six month period.
Final written warning: this is appropriate where there is no improvement within this timescale set on the first warning or if the behaviour is serious enough. Similar information should be given to that required on a first warning. This should also indicate the risk of dismissal if there is no improvement. ACAS’s suggestion is that 12 months is an appropriate period to keep such a warning active.
Dismissal: this results from gross misconduct or if the employee repeats offences or fails to improve after a final warning.
Appeals
The opportunity to appeal is essential to natural justice. The ACAS code says employees should be informed of their right of appeal and appeals should be heard without unreasonable delay. The appeal should be heard by someone appropriate, ideally a senior manager, who has not been previously involved in the disciplinary procedure. The size of an organisation will partly dictate what is practicable. Where it is not possible to have a different person hearing the appeal the individual involved must act as impartially as possible. Employees are entitled to be represented at the appeal hearing. If new evidence arises, the employee or his or her representative should be given an opportunity to comment and it may be necessary to adjourn the appeal to investigate.
Grounds for appeal are various: procedural irregularity, too severe a penalty, new evidence coming to light, unfairness generally etc. The employer’s appeal procedure may dictate how the appeal should be run. Both the ACAS code and the statutory dispute resolution procedures appear to expect employees to appeal if they are unhappy with the decision. Failure to appeal may adversely affect compensation arising from a successful claim.
Grievances
The post April 2009 regime does not require a grievance to be brought before a claim may be made. However, the ACAS code seems to expect formal grievances to be brought if it is impossible to resolve matters informally. There is a risk of compensation being reduced if the employee wins any case when he or she had not first brought an internal grievance. The Code is unclear whether it would be considered a breach not to attempt an informal grievance before raising a formal one. It is also unclear whether employees have to bring a grievance once they have left the employment.
The employer has a duty to give employees an opportunity to obtain, reasonably and promptly, redress of any grievance that they may have. This was established in the case of W A Goold (Pearmak) Ltd v McConnell [1995] IRLR 516, EAT. Employers should deal with grievances consistently and promptly. Employees should appeal if they feel their grievance has not been satisfactorily resolved. If an employee raises a grievance during a disciplinary process, ACAS recommends that the disciplinary should be temporarily suspended to deal with the grievance.
Where statutory dispute resolution procedures still apply, there are minimum steps for the handling of a grievance.
Discriminatory handling of disciplinary or grievance procedures
Employers may be guilty of further discrimination or victimisation in the way they deal with an employee's grievance related to discrimination, for example by failing to investigate properly or taking an exceptionally long time to deal with the matter.
Right to be accompanied at disciplinary and grievance hearings
Section 10 of the Employment Relations Act 1999 requires employers to allow employees to be accompanied by a trade union representative or another employee at grievance and disciplinary meetings. Although the companion cannot answer questions on behalf of the worker, they may address the hearing, confer with the worker, sum up the worker's case, and express the worker's views.
Section 10(6) of the Employment Relations Act 1999 requires that the person chosen to accompany the worker be allowed time off work to do so. If the chosen person cannot attend at the chosen time, the employer must postpone the meeting for any reasonable time proposed by the worker within five days of the original date.
The right to be accompanied does not apply to meetings to inform workers of impending redundancy and is unlikely to cover purely investigatory, as opposed to disciplinary, meetings.
The ACAS code says that employees should be advised of their right to be accompanied when they are notified of a disciplinary hearing. Failure by the employer to so notify or refusal to allow the employee to be accompanied may result in a compensatory uplift of up to 25% if the employee's employment tribunal claim is successful.
An employment tribunal may award compensation of up to two weeks' pay under section 11 of the Employment Relations Act 1999 where a worker has been denied the right to be accompanied.
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