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Employment Act 2008 and the ACAS Code: New landscape for workplace discipline and grievance

30 June 2009

The statutory dispute resolution procedures (SDRPs) were swept away when the Employment Act 2008 came into force in April 2009.

In their place, a new ACAS Code of Practice was introduced, and the law on unfair dismissal changed accordingly.

The short-lived SDRPs, introduced in 2004, were unsuccessful in achieving the Government's stated aim of reducing the number of disputes ending up in the employment tribunal.

There was an unprecedented consensus of opinion that they had to go, but is this a case of ‘careful what you wish for'?

This article examines how the new regime for disciplinary and grievance matters is working in practice, and highlights some continued areas of uncertainty.

How does the brave new world look?

In many ways the law has reverted to what it was before the SDRPs were introduced: for example, although the ACAS Code of Practice, which came into force in April, was updated to reflect the repeal of the statutory procedures, a form of ACAS Code has been around since 1977.

The position has reverted to what it was before 2004 so that even though a tribunal may find that a dismissal is unfair for procedural reasons, it will be able to make a reduction in compensation (possibly up to 100%) where it considers that the procedural failure made no difference to the eventual outcome. 

The Code provides basic practical guidance for employers when dealing with disciplinary and grievance issues in the workplace, and will be taken into account by an employment tribunal when deciding if a dismissal is fair. In this way the Code acts as a ‘bench mark' for a fair procedure in most cases.

However, it is not mandatory for employers to follow the Code, so an employee will not be able to bring a claim just because their employer failed to comply with a recommendation in the Code.

There are some differences in this brave new world. Previously, a tribunal had the discretion to vary compensation by up to 50% where there had been a failure to follow a relevant SDRP. Now, where a tribunal considers that there has been an ‘unreasonable failure' to comply with a provision of the Code in a relevant case they can increase or decrease any compensation awarded by up to 25% (dependant upon which party is considered to be at fault).

While this suggests there are requirements on both employers and employees in the Code, in reality, particularly in disciplinary situations, it is the employer who will have to pay particular attention to the Code.

It is also worth noting that the Code has a wider application than just dismissals. A tribunal may increase any award where the guidance is relevant, so this would include an array of employment claims, including discrimination. 

Are things any better?

Employers, employees, and their lawyers became conditioned to following the letter of the SDRPs and the draconian penalties for failing to do so.

The new regime under the Code restores discretion to tribunals, which it is hoped will allow employers greater flexibility in dealing with disciplinary and grievance issues and result in more common sense decisions from tribunals.

While this is a positive development in that it frees all parties from the relative straitjacket of the SDRPs, it does mean there will be an element of the unknown where the whims of the tribunal will dictate the outcome.

However, this at least gives employers a fighting chance of persuading a tribunal that they acted reasonably, and the skill of the advocate representing them could be all important.

In this brave new world employers should not be penalised for minor discrepancies in their handling of cases in the way they were under the SDRPs.  

As with any change to the law there will inevitably be a ‘bedding in' period, and it may be some time before cases coming out of the tribunals give us an idea of how the new regime will operate in practice.

In the meantime, there remain some areas of uncertainty concerning interpretation of the Code. Here are some common questions:

ACAS Code: Q&A

Does the Code just apply to unfair dismissal cases?

No, the Code could be relevant to many other types of employment tribunal claims, including discrimination.

Does the Code apply to all types of dismissal?

No, the Code is stated to apply to dismissals relating to misconduct or poor performance only. This means dismissals due to retirement, redundancy, ill-health, non-renewal of a fixed-term contract and any other reason are not covered. However, this does not mean employers should not also strive to follow a fair procedure in such cases.

Can an employee bring a claim in the employment tribunal if we fail to follow the Code?

Not without more. A failure to follow a provision of the Code does not in itself mean an organisation will be liable to proceedings. However, an employment tribunal will take any failure into account when deciding whether a dismissal is fair or unfair. The Code therefore acts as a ‘benchmark' for a fair procedure in such cases.

Also, in dismissal and other cases, where a tribunal considers there has been an ‘unreasonable failure' to follow the guidance in the Code it can increase or decrease any award made by up to 25% depending on which party is at fault.

What will an employment tribunal consider an ‘unreasonable failure' to follow the Code?

The $600m question. It will depend on the circumstances of each case, and will be for a tribunal to exercise its judgment to decide what is or is not reasonable in each case. The size and administrative resources of the employer will be relevant factors.

Do we have to go through any process if we want to dismiss someone with less than 12 months' service?

Although employees with less than 12 months service cannot usually bring a claim of unfair dismissal (although there are important exceptions), they can bring other claims where the Code may be relevant, such as discrimination or wrongful dismissal. Therefore, in most such cases it would be safest to follow the Code.

Do we have to consult with employees and their representatives about changes to our disciplinary and grievance procedures?

The Code says that employees and, where appropriate, their representatives should ‘be involved in the development of rules and procedures'. This is a far less formal obligation than consultation. It may be appropriate to simply encourage employees to comment on the rules and procedures via the HR department. 

Is an employer under a duty to train its employees about company rules and procedures?

There is no formal requirement to train employees, the Code says only that employers should help employees to understand rules and procedures, where they are to be found, and how they are to be used. 

Can an employer dismiss for gross misconduct without going through any procedure?

No, an employer should always follow a fair procedure before dismissing for gross misconduct. Not only does the Code recommend this, but going through a fair procedure enables the employer to satisfy itself that the employee did in fact commit an act of gross misconduct. 

Does an employee have the right to be accompanied at an investigatory meeting?

The purpose of an investigatory meeting should simply be to establish the facts in order to decide if it is appropriate to invoke the disciplinary procedure. There is no statutory right to be accompanied at an investigatory meeting, as this right only applies to disciplinary or grievance meetings. However, an employer may consider being more generous under its own policy, and allow employees to be accompanied at such meetings.

What information do we have to give to an employee before a disciplinary meeting?

Before any disciplinary meeting, an employer needs to inform the employee in writing about the case against them and the possible consequences i.e. written warning or, in more serious cases dismissal. This must be full enough to enable the employee to prepare their defence. Normally this would mean providing copies of any written evidence, including witness statements. The notification should include the time and venue of the meeting and advise the employee of the right to be accompanied. 

What can we do if an employee goes off sick before a disciplinary meeting?

Employees seeking to frustrate the momentum when dealing with workplace issues is a perennial problem for employers.

Arguably, the Code does not provide much new help on this issue. It says simply that where an employee is ‘persistently unable or unwilling to attend a disciplinary meeting without good cause, the employer should make a decision on the evidence available'. 

However, employers should not be too hasty in making a decision in the employee's absence. The reference to ‘persistently unable...' suggests employers should give the employee plenty of opportunity to attend. In addition, remember that an employee could be protected under the Disability Discrimination Act 1995 if they are on long-term sick leave. It may be helpful to add a section to your disciplinary policy setting out how you will generally deal with employees in this situation.

Can an employee cross examine witnesses at a disciplinary meeting?

No, the Code does not require this. At the disciplinary meeting an employee may only raise points about the employer's evidence, ask questions, and call their own witnesses.

Can we limit the period within which an employee must appeal?

The Code does not specifically address this issue, although it does say that all issues should be raised ‘promptly'. However, the accompanying ACAS Guidance suggests employers may specify a time-limit within which an appeal musty be lodged and cites five working days as appropriate. Any express time limit should be extended in appropriate circumstances.

Can an employee be accompanied at a disciplinary meeting by their lawyer?

Not in the vast majority of cases. The statutory right to be accompanied covers a work colleague or trade union representative only. However, if the employee is disabled there may be some circumstances where to allow a legal adviser is a necessary reasonable adjustment.

It is also possible that in some specialised environments it may be necessary to allow legal representation. Any request from an employee for legal representation should be considered based on the facts of each case. 

Has the definition of grievance changed?

Yes, arguably this is now wider than it was. The Code defines a grievance as ‘concerns, problems or complaints that employees raise with their employers'.

Under the statutory procedures the definition was ‘a complaint by an employee about action which his employer has taken or is contemplating taking in relation to him'.

Do we need to worry about grievances that are not raised formally in writing?

The Code requires grievances to be ‘in writing' and to ‘set out the nature of the grievance'. However, this does not necessarily solve the issue that arose under the statutory procedures where the Courts held that various written documents such as resignation letters containing complaints constituted grievances, but the employer failed to recognise them as such.

Grievance policies should state clearly that if employees have complaints they should use the formal grievance procedure. Where an employee raises an issue orally they should be referred to the grievance procedure.

Do we have to hear grievances from ex-employees? 

Given the definition of ‘grievance ‘ set out above, it appears that employers do not have to hear grievances from ex-employees (and now that an individual does not have to bring a grievance before submitting an employment tribunal claim it is likely that grievances from ex-employees will be less common). However, there may be circumstances, for example if the complaint related to bullying and harassment, where an employer would want to investigate any such complaint in light of its duties to existing employees.

What should we do if an employee raises a grievance while they are in the middle of a disciplinary?

Under the SDRP there were complicate rules around which procedure applied. The employer now has a choice in this scenario; they can suspend the disciplinary procedure temporarily while they deal with the grievance or, if the grievance is related to the disciplinary case it may be more appropriate to deal with the issues at the same time. Do not forget, though, that the employee must be allowed a right of appeal from both the grievance and disciplinary outcomes.  

Should we be using mediation more to resolve workplace disputes?

Traditionally mediation has not been used extensively to resolve employer/employee disputes, and there is no obligation to do so (although this was an early proposal when the repeal of the statutory procedures was first proposed).

However, mediation can have significant advantages for an employer both in terms of costs and strategy. It is not always necessary to involve an external mediator, and in larger organisations an independent internal mediator could be designated to help resolve disputes.

Where can I get further information?

ACAS  
ACAS Code  
Guidance 

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