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The ACAS code sets down guidelines for running disciplinary and grievance hearings. Failure to comply can lead to an uplift in the compensation an employee may claim.
Based on our experience of advising employers on how to conduct disciplinary hearings and grievance hearings we have prepared an overview of the key considerations to follow or include in employment policies.
The ACAS Code is split into disciplinary issues and grievance issues although some of the points overlap. The ACAS code does not apply to redundancy dismissals or non-renewal of fixed term contracts.
The ACAS Code is intended to help employers and employees deal effectively with issues of alleged misconduct or poor performance in the workplace. When deciding whether an employee has been unfairly dismissed for misconduct or poor performance, an employment tribunal will consider whether the employer has followed a fair procedure. In doing so, the tribunal must take account of any provisions of the ACAS Code that appear to be relevant.
If an employee brings a successful claim for unfair dismissal or a number of other common types of claim (including those related to discrimination, breach of contract, working time, detriment, and deduction of wages) arising out of dismissal or disciplinary action for misconduct or poor performance, the level of compensation awarded to the employee can be affected if either party failed to follow the Code.
The ACAS Code is supplemented by a non-statutory guide, discipline and grievances at work: the ACAS guide, which gives further guidance on best practice. While the guide itself does not have to be taken into account by Employment Tribunals, it does contain some useful guidance developed from unfair dismissal case law, and therefore employers should not ignore it.
It is an important principle established in the case law of unfair dismissal that an employer should carry out a reasonable investigation, and this is reflected in the ACAS Code. This may involve investigatory meetings with the employee under investigation or it may simply involve the collation of other evidence. Any investigatory meeting should not result in disciplinary action without a disciplinary hearing.
If paid suspension is necessary during the investigation, this should be as brief as possible and kept under review. The employer should make clear that this is not in itself a form of disciplinary action.
If there is a case to answer, the employee should be notified in writing of the alleged misconduct or poor performance and its possible consequences (including, where appropriate, the risk of dismissal) in sufficient detail to enable them to respond at a disciplinary hearing. Any written evidence, which may include witness statements, should be provided to the employee.
The notification should set out the time and place of the disciplinary hearing (which should be held without unreasonable delay while ensuring the employee has reasonable time to prepare their case). It should also set out the employee's right under the Employment Relations Act 1999 to bring a companion (either a fellow worker or a trade union representative) to the hearing.
It is a basic principle of fairness that a decision whether to dismiss or take other disciplinary action should not be taken without a disciplinary hearing or meeting. Either side should give advance notice of any witnesses they intend to call.
At the hearing:
Following the hearing, the employer's decision should be sent to the employee in writing without unreasonable delay. Gross misconduct can justify dismissal for a first offence, but not without following the disciplinary procedure.
If misconduct or poor performance is established, a dismissal would usually only be appropriate if there has been a written warning and a final written warning - the old rules in that respect still apply. Written warnings should set out the nature of the misconduct or poor performance, the improvement required, the timescale for improvement, how long they will remain current and the consequences of further misconduct (or failure to improve) within that period.
If the employee feels the disciplinary action against them is unjust, they should appeal in writing, specifying the grounds of their appeal. If they bring a tribunal claim without appealing, any compensation they are awarded may be reduced.
The appeal should be heard without delay, ideally at an agreed time and place, and should be conducted impartially by a manager who (where possible) has not been previously involved. The employee can bring a companion to the appeal hearing.
The ACAS Code states that employees and, where appropriate, their representatives (such as a recognised trade union) should be "involved" in the development of disciplinary rules and procedures, and that employers should help employees and managers understand those rules and procedures, where they can be found and how they are to be used.
Where an employer has failed to put any written procedures in place, or puts procedures in place without involving employees, this could technically be a breach of the ACAS Code, even if the employer ultimately follows a fair procedure. It is not clear what view tribunals will take of this, especially where the employee has not suffered any additional injustice as a result.
The ACAS Code is also unclear as to whether employers should consult over existing procedures if they were put in place without any employee involvement. The non-statutory ACAS guide suggests that it may be sufficient to "keep rules and procedures under review", and to ensure that employees and their representatives are consulted before introducing "new or additional rules".
The ACAS Code recommends two significant steps (see below) that are viewed by many as not strictly necessary from an unfair dismissal perspective.
The Code requires employers, at the start of the hearing, to "explain the complaint against the employee and go through the evidence that has been gathered". This stage has often been ignored in the past, or taken as read, since the employee should already have been given the opportunity to digest this information.
Secondly, employees should be given "a reasonable opportunity to ask questions, present evidence and call relevant witnesses". While asking questions and presenting evidence is generally viewed as essential to natural justice, the right to call witnesses to the hearing is not. Case law has established that a disciplinary hearing is not a quasi-judicial process, and it would usually have been considered sufficient for the employer to interview witnesses (including those whose evidence favours the employee) as part of its investigation, and to rely on their statements at the hearing without having to call the witnesses themselves.
There is no specific requirement for the employer to call its own witnesses, or to allow the employee to cross-examine them.
A failure to allow a right of appeal against any disciplinary action, including a warning, is a breach of the ACAS Code. It could therefore increase compensation in the Employment Tribunal if the employee brings a successful claim (such as a victimisation claim) based on the disciplinary action.
The ACAS Code is not written in the precise language of a statute. Tribunals will have a wide discretion to decide what amounts to a failure to follow the Code, whether that failure is "unreasonable" and to what extent an uplift or reduction in compensation is "just and equitable".
An Employment Tribunal may only adjust compensation in cases involving employees. Where the claim involves a right which is available to a wider category of individual, such as whistle blower protection (which is available to workers), or protection from discrimination (which is also available to self-employed individuals), this may lead to satellite litigation over employment status in cases where this would not usually be an issue.
Involve employees and/or their representatives in developing any new disciplinary procedures, and make sure the procedures are transparent and accessible to employees.
The ACAS Code is intended to help employers and employees resolve grievances effectively in the workplace. Dealing with a grievance effectively can avert Employment Tribunal claims by enabling the issue to be resolved internally.
If an employee's claim is successful but either the employer or the employee failed to follow the Acts Code, the level of compensation awarded to the employee may be affected. If the employer unreasonably failed to follow the Code, the tribunal may increase the employee's compensation by up to 25%. The Employment Tribunal must decide what uplift (or reduction) would be just and equitable.
This regime does not apply to all claims but does apply to the types of claim most commonly brought in the tribunals (including those related to discrimination, unfair dismissal, equal pay, breach of contract, working time, detriment, and deduction of wages).
A grievance can be any concern, problem or complaint that an employee raises with the employer. If a grievance cannot be resolved informally, the employee should raise it in writing with a manager (if the grievance concerns their line manager, the grievance should be raised with another manager).
A failure to raise the grievance in writing does not prevent an employee bringing a tribunal claim about the matter. However, the employee may recover less compensation if they have not done so.
A meeting should be held to allow the employee to explain their grievance and how they think it should be resolved. Managers, employees and their companions should make every effort to attend the meeting. If the matter needs further investigation, the employer should consider adjourning the meeting and resuming it after the investigation has taken place. When the meeting is concluded, the employer should communicate its decision in writing without unreasonable delay.
An employee (or other worker) has statutory right to bring a companion (a fellow worker or a trade union representative) to a grievance meeting, where the complaint is about a "duty owed by the employer to the worker". This right has its own remedy for breach, but it is also part of the ACAS Code.
The employee must make a reasonable request to be accompanied. What is reasonable will depend on the circumstances, but the Acas Code suggests that it will not normally be reasonable for the companion to be someone whose presence would prejudice the meeting, or someone from a remote workplace if a suitable and willing companion would be available at the same site.
If the employee is not satisfied with the outcome, they should appeal in writing, specifying the grounds of their appeal. If they bring a tribunal claim without appealing, any compensation they are awarded may be reduced.
The appeal should be dealt with impartially at a hearing, which should, if possible, be conducted by a manager who has not been previously involved. The employee should be informed in advance of the time and place of the appeal hearing and may bring a companion. The employer should communicate the final decision in writing without unreasonable delay.
There is no automatic extension of time to take account of the fact a grievance may still be in progress.
The ACAS Code states that employees and, where appropriate, their representatives (such as a recognised trade union) should be "involved" in the development of grievance procedures, and that employers should help employees and managers to understand how they are to be used. The Code is not specific about how to involve employees and does not explicitly require employers to seek employees' agreement.
Where an employer has failed to put any written procedures in place, or has put procedures in place without involving employees, this could technically be a breach of the Code, even if the employer ultimately follows a fair procedure. It is not clear what view tribunals will take of this, especially where the employee has not suffered any additional injustice as a result.
A tribunal may only adjust compensation in cases involving employees. Where the claim involves a right which is available to a wider category of individual, such as a whistle blower protection (which is available to workers), or protection from discrimination (which is also available to self-employed individuals), this may lead to satellite litigation over employment status in cases where this would not usually be an issue.
A further issue concerns whether former employees are covered by the ACAS Code. It is currently uncertain whether a former employee would be penalised for an unreasonable failure to submit a written grievance, and whether their former employer could be penalised for unreasonably failing to deal with it in accordance with the ACAS Code.
Employees often submit grievances during disciplinary procedures, either regarding the procedure itself or the circumstances leading up to the initiation of that procedure. Employers must decide whether to suspend the disciplinary procedure in order to fully investigate the grievance or, if the issues are related, deal with both of them concurrently. The non-statutory ACAS guide gives guidance on this.
Employment Tribunals will have a wide discretion to decide what amounts to a failure to follow the Code, whether that failure is "unreasonable" and to what extent an uplift or reduction in compensation is "just and equitable". This will lead to considerable uncertainty for employers until case law has developed, and may make it difficult to advise on appropriate figures for settlement of claims.
There will be additional pressure on both sides to complete the procedure in order to avoid the employee having to submit a claim just to preserve their position. Tribunals will no doubt keep the time limit in mind when considering whether there has been unreasonable delay by the employee in submitting their written grievance or appeal, or by the employer in arranging meetings or communicating the outcome of those meetings in writing.
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This paper is designed to provide a summary of the issues addressed. Therefore, it is not intended as a detailed commentary on the relevant law and any comments made should not be acted upon without first taking specific legal advice.