Changes to disciplinary and grievance procedures: more frequently asked questions

Louise Westby and Tina Maxey of Steeles (Law) LLP conclude a series of articles on changes to the law on disciplinary and grievance procedures with some frequently asked questions that look at the impact of the repeal of the statutory procedures, which will affect, in particular, the law on unfair dismissal.

How will the repeal of the statutory dismissal and disciplinary procedures affect the law on unfair dismissal?

The statutory dispute resolution procedures are being repealed with effect from 6 April 2009. There will be a revised Acas code of practice (currently in draft form (Draft code of practice on disciplinary and grievance procedures (PDF format, 58K) (on the Acas website))), which will effectively take their place. The main impact of the repeal, on the law on unfair dismissal, will be the removal of the potential for claims for automatically unfair dismissal where employers fail to follow a prescribed procedure (ie the statutory dismissal and disciplinary procedure). Instead, employment tribunals will assess only the general fairness of dismissal procedures and will take the Acas code into account when deciding claims.

However, the code will apply to disciplinary situations only, which includes misconduct and poor performance. The code will not apply to redundancy dismissals or the non-renewal of fixed-term contracts. The current statutory dismissal and disciplinary procedures apply to most dismissal situations.

Under the statutory procedures, a three-month extension to the normal three-month time limit for unfair dismissal claims applies in certain circumstances. The repeal of the statutory procedures will remove this extension.

What are the potential consequences of not complying with the Acas code of practice when dismissing?

The revised Acas code of practice is intended to help employers, employees and their representatives deal with discipline and grievances. It sets out a number of principles with which employers and employees should comply. When deciding whether or not an employee has been unfairly dismissed for misconduct or poor performance a tribunal will take the code into account.

If the employee is successful in his or her unfair dismissal claim, the employer's failure to follow the code could affect the compensation that the tribunal awards. If either party unreasonably fails to comply with the code, the tribunal may increase or decrease any award by up to 25%, depending on which party was at fault. Therefore, the employer's failure to comply with the code when dismissing could result in an uplift in compensation up to 25%, if its failure was unreasonable and the tribunal considers it just and equitable to award an uplift.

Will an unfair procedure always render a dismissal unfair?

As has always been the case, employers must act reasonably when dismissing employees. This includes following a fair procedure.

Under the current regime, if an employer follows the statutory dismissal and disciplinary procedure, its failure to take other procedural steps when dismissing will not necessarily make the dismissal unfair, provided that it can show that it would have dismissed the employee even if it had taken those procedural steps.

When the statutory procedures are repealed, an employer will no longer be able to defend an unfair dismissal claim successfully, by arguing that it would have dismissed even if it had followed a fair procedure. Other than in exceptional circumstances, a dismissal will be unfair if the employer has not followed a fair procedure, even if following a fair procedure would have made no difference to the outcome.

However, although the dismissal will be unfair, the employer can seek to limit the compensation awarded, to reflect the chance that it would still have dismissed the employee had it had followed a fair procedure.

How will the repeal of the statutory grievance procedures affect employers and employees?

Under the current arrangements, employees must raise a formal grievance before an employment tribunal will accept a claim under any of the jurisdictions listed in sch.4 to the Employment Act 2002. Employees must inform their employer of the basis of their complaint in writing. Following the repeal of the statutory grievance procedures, there will no longer be a requirement for employees to raise a formal grievance before bringing a claim.

The revised Acas code of practice sets out principles for employers and employees for the handling of grievances. If either party fails to comply with those principles and the employee brings a subsequent claim, the tribunal will take that failure into account when making its decision in relation to that claim. The tribunal may also increase or decrease any award by up to 25%, depending on the employer or employee's unreasonable failure to comply with the code.

Under the provisions relating to the statutory grievance procedures, the normal time limits for tribunal claims can be extended by three months in certain circumstances. This potential for extension is removed by the repeal.

Should employers address ex-employees' grievances?

Under the statutory procedures provisions, individuals must raise a formal grievance with their ex-employer before a tribunal will consider their claim. The parties can agree to use the modified statutory grievance procedure, under which there is no requirement to hold a meeting to address the grievance.

However, the revised Acas code of practice, which sets out principles for the handling of grievances, does not explicitly refer to the position in relation to ex-employees.

As there is no reference to ex-employees in the code, it might be argued that there is no need to follow the procedure in the code and hear the grievance. The alternative view is that it would be contrary to the spirit of the code to refuse to hear a grievance from an ex-employee.

As tribunals may uplift awards of compensation by up to 25% if an employer unreasonably fails to comply with the code, it would be advisable for employers to err on the side of caution and hear ex-employees' grievances. Doing so will give employers an opportunity to resolve grievances and avoid litigation.

Can employers disregard the statutory dispute resolution procedures after 6 April 2009?

Employers will not be able to disregard totally the dispute resolution procedures after 6 April 2009. Transitional arrangements will oblige employers to continue to follow them in certain circumstances.

The statutory dismissal and disciplinary procedures will continue to apply after 6 April 2009 if, on or before 5 April, the employer has:

• carried out step one or two of the standard procedure or step one of the modified procedure;
• taken relevant disciplinary action against the employee (ie action short of dismissal based on conduct or capability, other than the issue of a warning or suspension on full pay); or
• dismissed the employee.

For further information on when the employer will be deemed to have carried out the relevant steps of the statutory procedure see the Disciplinary rules and procedures section of the XpertHR employment law manual.

The statutory grievance procedures will continue to apply if the action to which the grievance relates occurred wholly before 6 April. The procedures will also continue to apply if the action to which the grievance relates started on or before 5 April and continues beyond that date, but only if the employee submits a claim to the tribunal or raises a valid grievance on or before 4 July 2009 for most claims, or on or before 4 October 2009 for equal pay or redundancy pay claims.

Next week's topic of the week article will be the first in a series on helping employees in financial difficulties and will be published on 9 March.

Louise Westby (lwestby@steeleslaw.co.uk) is a trainee solicitor and Tina Maxey (TMaxey@steeleslaw.co.uk) is a solicitor in the employment team at Steeles (Law) LLP.

Further information on Steeles (Law) LLP can be accessed at www.steeleslaw.co.uk.