Disciplinary procedure: best practices

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Disciplinary procedure: best practices

Disciplinary matters can be difficult. We have experience of almost all situations, including clients do not have a disciplinary procedure in place.

Providing a sounding board for grey areas of disciplinary procedure

Often the decision to commence disciplinary action against an employee is not a clear cut one.  We act as a sounding board for many clients in situations where an employee’s actions fall within the grey area between conduct and misconduct.

It can come down to a judgement call and getting it right as opposed to wrong can avoid a business being liable for compensation.

Implementing disciplinary rules and procedures

The disciplinary procedure has to match the business requirements, the risks and the standard expected from employees. Template disciplinary procedures can miss the subtle points the employer may need to rely upon.  Therefore, it is a false economy to fail to think about the purpose and is it fit for you.

The standards of conduct expected of all employees should be set out in the disciplinary rules which can either be part of the disciplinary procedure document, contained in a staff handbook, set out on an intranet or available from HR.

Disciplinary procedures commonly cover matters such as:


The disciplinary procedure provides a framework within which employers can work with employees to maintain satisfactory standards of conduct and performance.   Our role is often to provide guidance on difficult areas and provide the managers with confidence.

Interaction with ACAS

It is advisable to put in place a disciplinary procedure that complies with the provisions of the ACAS Code.  Failure to follow the ACAS Code is taken into account by a tribunal where relevant; for example, in deciding whether a dismissal is unfair.

An unreasonable failure to follow the ACAS Code may lead a tribunal, in some cases (not restricted to unfair dismissal), to adjust the amount of compensation payable to the employee.

Deciding on the appropriate disciplinary action

There are three broad categories of disciplinary action for an employer to consider:

Internal issues, such as

  • Under performance;
  • Harassment and discrimination allegations;
  • Suspected gross misconduct.

Issues that involve external bodies and regulators, such as:

  • Insider dealing;
  • Fraud;
  • Bribery & corruption.

Whistleblowing issues, such as:

  • Health and Safety compliance;
  • Money laundering;
  • Concealment of illegal activity.

Running successful disciplinary procedures

Most managers will, at some stage, have to deal with a troublesome employee.  In many situations it can be difficult when deciding between what is genuine and what is not.

We understand that some employers do not have disciplinary rules and procedures set down – we do have work around ideas we can deploy.

Grey area decision making under the disciplinary procedure

Following a proper disciplinary procedure including an investigation and hearings may still leave an employer with a decision to make based on judgement.  We provide employers with full support in the decision making process.

The benefit of our service is the manager can make a better decision less likely to give rise to an employment law claim.

Key stages in a disciplinary procedure

There are a number of key stages in a disciplinary procedure including the requirement to carry out a fair and thorough investigation, to conduct a hearing and an employee’s right to be accompanied by a fellow employee or trade union representative, at a disciplinary hearing.

Principle of fairness

The principles of fairness set out in the ACAS Code of Practice on Disciplinary and Grievance Procedures (the ACAS Code), apply in all instances.  The ACAS code also contains recommendations for the handling of disciplinary situations at work.

Fairness causes problems for employers in practice as they are often unsure as to what will be regarded as fair.  Our knowledge of employment law and views taken by Employment Tribunals will help an employer decide on fairness.

What can go wrong under a disciplinary procedure

Disciplinary procedures are disruptive, time consuming and drain valuable resources. What’s more, Employment Tribunals can increase compensation by up to 25% for an employer’s unreasonable failure to follow the ACAS code.

We have dealt with disciplinary issues for many years, and bring the best practices you need.  We often find the following problems in an employer’s disciplinary procedure:

Lack of awareness of the disciplinary procedure

Employers do need to educate their work force and let all staff know where they can find the disciplinary procedure.

Poor execution of a disciplinary matter

Thoroughly, fairly and swiftly investigate. Employers cannot make a disciplinary decision without first investigating. Even if the employee has attended an investigatory interview, always hold a disciplinary hearing once all the evidence is available, and allow the employee to put their side of the story (including calling witnesses unless this is unreasonable), before making any decision.

Hiding behind suspension

The decision to suspend and for how long is a judgement call which we assist employers with. What is right depends upon the case.  Even if the employment contract is silent, employers can still suspend.

However, employers can only suspend for as long as is absolutely necessary to conduct the review. The requirement of reasonableness forms part of any employment relationship.

Failing to demonstrate fairness

Employers are expected to be fair and balanced. The ACAS Code leaves many questions unanswered. Often judgement is required and employers owe employees a duty of good faith.

We work with employers to not only guide them on fairness in a particular case, but also to ensure they can demonstrate fairness if challenged.   Many unfair dismissal claims arise because the employee feels he was not dealt with fairly.

Absence and sickness disciplinary procedure

Absence often causes employers problems and it is difficult to manage. One risk is the employee brings a claim under the Disability Discrimination Act and/or a personal injury claim. You may need a medical report. We are often called into help employers deal with sickness absence.

Ultimately, sickness can be a fair reason for dismissal in some cases.

Written communications

Employers do need to communicate. We consider carefully the timing, the detail provided to the employee, and the evidence. Errors could be used against the employer. Employers must always keep written records, including minutes of meetings. Electronic communications are perfectly acceptable.

Employee refuses to attend the meeting

Often employees are unable or unwilling to attend without good reason. An employer can easily trip up. Then the employer can be held to account for not following a proper procedure or not setting reasonable timescales.


There is a duty to be proportionate and this over rides reasonableness. The difficulty with employment law cases is that  the legal fees can easily exceed the compensation awarded in court. Costs can never be overlooked. Quick and decisive action by an employer may be the best solution.


Usually, employers must decide whether the conduct falls short of gross misconduct or is sufficiently grave to justify instant dismissal.  Often, this is not an easy decision. We work to achieve the outcome desired.

Employer liability for employee’s actions

Increasingly, the law is tougher on enforcement and penalties can arise for employers for the employee’s wrongdoing. Employers can be liable for the acts of their employees. Best practice is a disciplinary procedure and process that prevents the behaviour.

However, when an investigation or court action is probable you may be advised to bring in external investigators. We will point the employer in the right direction and can often recommend suitable investigators for employers.

Need for external investigation as part of the disciplinary procedure

The pressure points depend on your business sector. The level of culpability levied against the employer varies according to its existing policies its response to the issue. The statutory framework for regulation is increasingly relying on criminal offences which require a special degree of investigation.

Specialist advice for employers in the financial services sector dealing with disciplinary procedure

The Financial Conduct Authority (FCA) has powers to bring criminal investigations and prosecutions. We deal with all aspects of investigations into:

  • Fraud;
  • Dishonesty;
  • Misconduct or misuse of information relating to financial markets;
  • Money laundering;
  • Carrying on a regulated activity without authorisation or exemption;
  • Failing to co-operate or falsely giving information to officials; and
  • Insider dealing.

Extensive powers now given to regulatory bodies to discipline the employer

Employers are not always aware that, as with HMRC, the FCA has significant powers. These include the ability to force disclosure of documents, as well as the power to search and seize documents and materials.

There is plenty for employers to consider here especially in circumstances where the investigation could result in civil and/or criminal penalties.

Bribery and responsibility of employers

The Bribery Act sets down a framework. Again employers are liable for acts of employees even if the employer did not commission these acts. For the employer, failure to reasonably prevent bribery could result in corporate conviction and sizeable fines and imprisonment for the employee or director.

Corporate Manslaughter

An employer can be found guilty of breaching their duty of care towards the health and safety of their employees where an injury at work results in a fatality.


Whistleblowing is on the rise, especially in the context of bribery and suspected corruption cases, where financial and other penalties are severe.

Myraid of claims relating to whistleblowing

Whistleblowing by employees can relate to a myriad of claims:

  • Bribery or corruption;
  • Alleged criminal offences;
  • Health and safety breaches;
  • Fraud or money laundering;
  • Damage to the environment; or
  • Concealment of unlawful and/or illegal activity.

Employees who report such matters have statutory protections. We work with employers seeking to avoid a whistleblowing claim and enforce whistleblowing procedures.

Disciplinary procedure track record

In situations where an employees actions fall within the grey area between conduct and misconduct we act as a sounding board for many clients when determining the appropriate course of action.

  • Drafting employment documentation including comprehensive disciplinary rules and procedures for a restaurant chain.
  • Advised a senior director of an accountancy business throughout a disciplinary investigation concerning the conduct of a senior employee.
  • Regularly advise clients on appropriate action to take, their obligations and procedural steps in situations where an employee’s conduct is in question.
  • Our client, a hedge fund, required legal advice throughout an FCA investigation into one of their fund managers

We can act as a sounding board throughout a disciplinary procedure and provide tactical advice when you need it. We ensure your disciplinary rules, procedures and investigations meet required standards and best practices.