Employment Law Update (November 2008)

ACAS publishes updated Discipline and Grievance Code

ACAS has published its updated Code of Practice on handling discipline and grievance matters in the workplace.  Among the surprises are that in future, employees will have the right to call their own witnesses to disciplinary hearings, even where the employer is not considering dismissal.

Big changes are due to take place to the way employers must handle discipline and grievance with the expected abolition of the statutory discipline and grievance procedures next April.  The procedures are being replaced by a new Code of Practice issued by ACAS, and employers who fail to follow the Code could find compensation payments increase by up to 25% if an employee is successful in an employment tribunal claim.

Why are the changes being made?

The idea behind the changes is to encourage employers and employees to resolve disputes in the workplace rather than pursue them in an employment tribunal.  This was also the idea behind the "statutory dispute resolution procedures" ("SDRPs") introduced in 2004 – and shortly to be abolished.  The 2004 changes did not achieve their objective - they made employers even more cautious than before, because of the risk of technical breaches of the law, and this in turn gave disgruntled employees another way of making claims against their employer.

The changes repeal the SDRPs, but employers will have a new ACAS Code to get used to.  If they fail to follow the Code, employers face paying increased compensation to employees found to have been unfairly dismissed.

How the Code works in Disciplinary Proceedings

The new Code applies to all formal disciplinary proceedings, including those where a Written or Final Written Warning are given.  This contrasts with the current situation under the SDRPs, which only apply to a disciplinary meeting which results in an employee's dismissal.

The Code also makes it clear how disciplinary proceedings should be conducted by the employer, including allowing the employee to ask questions, present evidence and call relevant witnesses.

Although the new procedures seem sensible and straightforward, there is a danger to employers, and particularly to small businesses with little experience in handling disciplinary matters.  Such employers may not understand that the whole of the disciplinary process, and not just the final act of dismissal, is subject to the revised ACAS Code, and that failure to conduct an early disciplinary hearing properly could be taken into consideration if the employee is later dismissed.

For Mentor clients, the good news is that our Advice consultants are available 24 hours a day to help at all stages of discipline and grievance proceedings.    Further guidance on the new procedures will be given to all clients ahead of the April changes.  In the meantime, if you want to discuss how the changes may affect your business, contact your Employment Law Consultant.

In a nutshell

• New ACAS Code replaces statutory discipline and grievance procedures from 6^th April 2009;
• Code will apply to all disciplinary action, not just to dismissals;
• Code will not apply to redundancies or termination of fixed term contracts;
• Failure to follow Code means up to 25% increased compensation if an employee is found to have been unfairly dismissed.