6 April 2009 saw the repeal of the statutory dispute resolution (disciplinary, dismissal and grievance) procedures (the SDDPs), which is a relief for employers, employees and employment lawyers alike. The SDDPs were replaced by the new Advisory, Conciliation and Arbitration Service (Acas) Code of Practice on Disciplinary and Grievance Procedures. Although the Code does not have statutory force, it will be used by employment tribunals when assessing fairness. Overview of the Code
The Code and the supplementary Acas guidance (‘Discipline and Grievances at Work: the Acas Guide’) has now been published in final form.
The Code encourages employers and employees to seek to resolve workplace disputes internally and informally where possible, in the hope that it will not be necessary to commence a more formal procedure. This aim is also reflected in the express provisions in the Code about giving consideration to using mediation to resolve disputes.
The Code states that it is intended to provide the standard for reasonable behaviour in most situations. In general, the Code is based on compliance with the following key principles of fairness:
- dealing promptly with issues (acting without unreasonable delay is a pervasive requirement under the Code);
- acting consistently;
- carrying out any necessary investigations;
- informing employees of the basis of the problem and giving them an opportunity to put their case;
- allowing employees to be accompanied at formal meetings; and
- offering employees the right to appeal.
The principles above do not differ dramatically from the practical reality of complying with the SDDPs.
The Code does not have statutory force, and a failure to follow it does not, in itself, make an employer liable to proceedings. However, the emphasis for employers and employees is on ‘reasonable compliance’ with the Code and tribunals will take the Code into account when considering relevant cases and whether any compensation award should be adjusted. What is ‘reasonable’ will depend on all the circumstances of the particular case and the tribunal will continue to take into account the size and resources of the employer.
The Code considers that fairness and transparency are promoted by developing and using rules and procedures for dispute resolution within the workplace, which should be drawn up with the involvement of employees and be specific, clear and set down in writing.
Grievance procedure
The Code defines ‘grievances’ as ‘concerns, problems or complaints that employees raise with their employers’. One of the most important changes under the new regime is that employees no longer have to raise a grievance before bringing a tribunal claim. It is hoped that the Code will encourage more matters to be resolved internally – under the SDDPs, the raising of a grievance was simply a precursor to bringing a tribunal claim, and a burdensome technical step.
No longer will employers, solicitors and tribunals have to pore over documents to assess whether they constitute grievances or not. Grievances do not have to be in writing under the Code – they should be, but there is no obligation. However, there is nothing to stop employers from asking for the grievance to be put in writing or to require this as part of their grievance procedure.
The Code sets out the procedure for raising and responding to grievances. In summary, if the matter cannot be resolved informally, the Code provides for the raising of a grievance to be followed by a formal meeting, communication of the decision in writing, and the right of appeal. Employers, employees and their companions should make ‘every effort’ to attend the meeting, and employees should be allowed to explain their grievance and how they think it should be resolved. In its decision, the employer should set out what action it intends to take to resolve the grievance, and should inform the employee that they can appeal. Any such appeal should be in writing and should set out the grounds for it. The employer should communicate the outcome of the appeal to the employee without unreasonable delay.
Employers no longer have to hear grievances brought by former employees – under the SDDPs these were dealt with through the ‘standard’ or ‘modified procedure’. However, post-termination grievances may provide the employer with information on which it does wish to act. In particular, employers should continue to take any grievances relating to post-employment discrimination seriously and deal with them appropriately.
Time limits for bringing claims are now much simpler. Subject to the transitional provisions (see below), raising a grievance no longer has the effect of extending the time limit for bringing claims. Instead, the usual rules on extension of time limits apply: they should be ‘just and equitable’ or ‘reasonably practicable’, as appropriate.
Disciplinary procedure
The ‘Step 1 letter, meeting and appeal’ process under the SDDPs no longer applies. However, in practice, similar steps are necessary, in that employers must undertake thorough investigations (the more serious the allegation, the more thorough the investigation) to establish the facts prior to commencing disciplinary action.
The employee must be notified in writing that there is a disciplinary case to answer and this notification has to include sufficient information about the alleged misconduct or poor performance and the possible consequences, thus enabling the employee to prepare to answer the case. In addition, whereas it was best practice under the SDDPs to enclose with the Step 1 letter copies of any documents on which the employer wanted to rely at the meeting (including witness statements), this is now explicitly stated as ‘normally appropriate’ under the Code. If the employer or employee intends to call witnesses, they should give advance notice of this.
In convening the disciplinary hearing, employers must act without unreasonable delay, while giving employees a reasonable time to prepare their case. Under the Code, there is no equivalent to the modified procedure under the SDDPs and a fair disciplinary procedure should always be followed, including in cases of gross misconduct.
At the meeting, employees should be given a reasonable opportunity to set out their case and answer any allegations. They should be given a reasonable opportunity to ask questions, present evidence and call relevant witnesses.
The Code introduces more flexibility in relation to the number of times an employee can fail to attend a disciplinary meeting. Employees must make ‘every effort’ to attend the meeting. An employer may make a decision on the evidence available if the employee persistently fails to attend the meeting without good cause.
The Acas guidance proposes an adjournment for consideration of any disciplinary penalty. The employee should be informed in writing of the outcome of the meeting. This was also best practice under the SDDPs.
The SDDPs expressly excluded disciplinary warnings – employers could issue warnings without having to send out the Step 1 letter, which was a useful exclusion in practice. There is no such exclusion of disciplinary warnings under the Code, which applies to all disciplinary sanctions. If the outcome is a warning, it should set out the nature of the misconduct or poor performance and the change in behaviour or improvement in performance required (with a timescale). The employee should be told how long the warning will remain current and the consequences of further misconduct/poor performance within the specified timescale. The Acas guidance suggests that six months might be a suitable period for first written warnings and 12 months for final written warnings.
Employees should appeal against disciplinary action that they think is ‘wrong or unjust’. The employee must let the employer know the grounds of the appeal in writing. The employer should communicate the results of the appeal meeting in writing without unreasonable delay.
As was best practice under the SDDPs, employers should keep written records of any disciplinary or grievance cases and should give copies to the employee.
Suspension periods
Suspension on full pay is not covered by the Code. The Acas guidance provides that any period of suspension should be with pay, unless there are exceptional circumstances, in which case this must be provided for explicitly in the contract of employment.
A suspension period should be kept as short as possible and should never be used as a punishment before a disciplinary hearing or decision. Suspension cannot always be regarded as a ‘neutral’ act, and employers need to approach any decision to suspend with care.
Effect of non-compliance with the Code
The sanction of ‘automatic unfair dismissal’ for a procedural failure in a dismissal process has been abolished. There is still a requirement for ‘fairness’, as set out above. If an employer does not follow a fair procedure when dismissing an employee, that failure will result in a normal, rather than automatic, unfair dismissal finding. However, the tribunal will be able to reduce any compensation it awards by up to 100% if it was likely that dismissal would have occurred anyway, even if the employer had followed a fair procedure.
The compulsory financial penalty of between 10% and 50% adjustment on awards, imposed on either the employer or the employee for failure to follow or complete the statutory procedures, has been abandoned. Under the new regime, the tribunal may reduce or increase any award it makes by up to 25% for an unreasonable failure to follow the Code by either the employer or the employee. It is likely that tribunals will look at the Acas guidance to determine whether and when to apply such a penalty.
Right to be accompanied
Employees still have the right to be accompanied to disciplinary, dismissal and grievance hearings (but not to investigatory meetings, although the Code encourages employers to allow this in their procedures), both under the Code and in the Employment Relations Act 1999. The employer is obliged to advise the employee of this right. However, in order to be accompanied, the employee must first make a reasonable request.
Overlapping disciplinary and grievance issues
The Code deals expressly with the common problem of an employee raising a grievance during a disciplinary procedure. The options under the Code are to temporarily suspend the disciplinary process to deal with the grievance (this frequently occurred in practice under the SDDPs) or, if the matters are related, to deal with the disciplinary issues and the grievance concurrently. The Acas guidance suggests that suspension of the disciplinary procedure may be appropriate, for example, if the employee alleges a conflict of interest for the manager who is dealing with the disciplinary hearing.
Transitional provisions
The regime under the SDDP will still apply where:
- the employer has started disciplinary or dismissal action (ie sent a Step 1 letter or held a meeting) or taken disciplinary or dismissal action on or before 5 April 2009; or
- the action about which an employee raises a grievance takes place wholly before 6 April 2009. As the statutory grievance procedure will apply, there will be an automatic three-month extension for bringing a tribunal claim. Further transitional provisions apply if there was a continuing act which began before 5 April 2009 but continued afterwards.
Key exceptions
The Code only relates to dismissals involving matters of conduct and poor performance. It does not apply to retirement, redundancy, dismissals for ‘some other substantial reason’ (although care needs to be taken to ensure that this is not, in reality, a conduct or performance dismissal) or to the non-renewal of fixed-term contracts. Employers who have separate capability procedures can deal with performance issues under those, but would still have a duty to follow the basic principles of fairness set out in the Code.
Comment
The abolition of the SDDPs is a welcome step in the right direction. Employers would be advised to simplify their policies to bring them in line with the Code. It is a good opportunity to make sure that current policies are not unnecessarily onerous or prescriptive for employers. However, although the Code is simpler than the regime under the SDDPs, employers need to be aware that it is not possible to use the Code and ‘contract out’ of the SDDPs if it applies, or to rely on compliance with the Code alone to show fairness.
There will inevitably be confusion as to how the transitional provisions apply, and employers, employees and employment law practitioners may still be dealing with two regimes simultaneously for some while yet.
By Clare Battersby, associate, Salans. E-mail: cbattersby@salans.com.
