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Disciplinary and Grievance Procedures – Back to the Drawing Board

In April 2009, after a five year run, the statutory dismissal and grievance procedures will be abolished, having attracted criticism on all sides. In their place will come a revised and simplified ACAS Code of Practice, together with a power to increase the amount of compensation awarded by up to 25% in the event of an unreasonable failure to comply with this Code.  Apart from this potential increase in damages, it all looks rather similar to the previous regime.

The idea behind the outgoing procedures was certainly innovative and bold: to insist on certain essential steps being carried out as a prerequisite to handling complaints fairly or to carrying out a fair dismissal, with a power to award increased compensation against employers who failed to do so.  In the case of a disciplinary process the three essential steps of letter, meeting, and right of appeal soon became engrained in the workplace, and may well have left their mark.

Concerns were widely expressed when they were introduced that this simple checklist approach would lower the standards of procedural fairness expected by Tribunals; that in fact although these three steps were a necessary but not a sufficient condition, in practice the distinction would be blurred. 

There was also a serious difficulty in dealing with situations where the statutory three steps were complied with, but not the ACAS Code of Practice or a company’s own disciplinary procedure.  Tribunals were expected to assess what the chance was that those extra steps would have made a difference to the outcome, and ignore them where the odds of a different result were less than 50%.  Without clairvoyant powers, this was a difficult exercise for Tribunals to carry out, and correspondingly difficult for legal advisers to predict.

Grievances have been the main bugbear however, with numerous cases on what constitutes a written grievance.  The intention was to encourage the parties to resolve their disputes between themselves rather than going to a Tribunal, but the effect has been the opposite - to involve lawyers from the outset to make sure that the statutory procedure has been followed. 

Before all this, Employment Tribunals had a shrewd idea of what an unfair dismissal looked like and had regard to the ACAS Code of Practice.  So too did the parties, and so there was only one standard to apply.  On the many occasions when the Code was not complied with in some respect the Tribunal would have to assess whether it made the dismissal unfair.   Even so, they could reduce the damages to reflect the chance that the employee would still have been dismissed. 

The new ACAS Code of Practice, introduced by the Employment Act 2008, is a clear and concise statement of the key principles. It emphasises what should happen, rather than what must happen.  The intention is to remove the constant threat of litigation for breach of minor technicalities and to look instead at the situation as a whole to determine whether the behaviour of the employer was fair and reasonable.

The thrust of the new code is that employees and employers are expected to do all they can to resolve disciplinary and grievance issues in the workplace and that recourse to an Employment Tribunal should only be a last resort. 

The Code itself is extremely short - a mere 5 pages – and is clear and digestible.  It sets out, for example, the following general guidelines for employers taking formal action:

• Issues should be dealt with promptly.
• Employers should act consistently.
• Appropriate investigations should be made.
• Grievance or disciplinary hearings should be carried out by managers not involved in the matter giving rise to the dispute.
• Performance issues should involve immediate managers.
• Employees should be informed and be able to put forward their case before any decisions are made.
• Employees have the right to be accompanied.
• Employees should be allowed to appeal.
• It is good practice for employers to keep written records.

In the context of disciplinary procedures, it adds that you should

• Establish the facts of each case.
• Inform the employee of the problem.
• Hold a meeting with the employee to discuss the problem.
• Allow the employee to be accompanied at the meeting.
• Decide on appropriate action.
• Provide employees with an opportunity to appeal.

Similar common sense rules apply to grievance handling:

• Let the employer know the nature of the grievance.
• Hold a meeting with the employee to discuss the grievance.
• Allow the employee to be accompanied at the meeting.
• Decide on appropriate action.
• Allow the employee to take the grievance further if not resolved.

Training on the new Code will soon become an importance.  The Guidance to the Code (which runs to 74 pages) specifically states that “those responsible for using and operating the disciplinary rules and procedures, including managers at all levels, should be trained for the task”.  As the date for introduction approaches, we will be offering training sessions for our clients.  Watch this space.