The Advisory, Conciliation and Arbitration Service’s (Acas) code of practice for handling disciplinaries and grievances at work was published in November. Business secretary Lord Mandelson has approved it and it is now before Parliament. The code should come into effect on 6 April 2009 and will replace the statutory dispute regulations that were scrapped last year. It retains, in essence, the customary three-step procedure – inform, meet and right of appeal – that should be followed in disciplinary and grievance cases.
Why has Acas produced the new code of practice?
Acas revised the code of practice on disciplinary and grievance procedures (the revised code) in anticipation of the repeal, proposed in the Employment Bill, of the statutory disciplinary and grievance procedures that are currently in force.
The Employment Bill was proposed to simplify and improve all aspects of employment dispute resolution. Following recent Royal Assent, the Employment Bill is now the Employment Act 2008 (the Act) and the relevant sections of the Act that will repeal the statutory dismissal and disciplinary procedures are expected to come into force in April 2009.
When will the revised code come into force?
Acas issued an initial draft of the revised code in May 2008 for consultation purposes. Following consultation, a second draft was issued, which has been approved by the Department for Business, Enterprise and Regulatory Reform, but it still needs to be put before Parliament for approval.
Acas intends that the revised code will come into effect on the same day as the relevant parts of the Act, in April 2009. It has confirmed it will also publish, around this time, non-statutory guidance for handling disciplinary and grievance issues in the workplace.
What is the purpose of the revised code?
The purpose will remain the same as before: it will provide guidance on disciplinary and grievance matters in the workplace. However, this will take the form of broad principles rather than the prescriptive guidance required under the current statutory procedures.
The revised code will remain a primary guide for procedural fairness and the extent to which it has been followed in any dismissal situation will be taken into account by an employment tribunal.
If the revised code has not been followed, employers should be prepared to explain why.
A failure to follow the revised code will not give rise to a free-standing claim but an unreasonable failure to follow it will entitle an employment tribunal to adjust awards by up to 25% each way. This will replace the current uplift regime where a failure to follow the statutory disciplinary or grievance procedure could give rise to an uplift on any award of up to 50%.
What is the legal basis of the revised code?
The legal basis of the revised code has not changed: it will not be legally binding. However, employers who dismiss the revised code do so at their peril because it will continue to be relevant when an employment tribunal assesses the fairness of any dismissal.
What has been the reaction to the revised code?
The government is of the opinion that the revised code is fundamental in simplifying the dispute resolution system and encouraging employers and employees to resolve disputes internally, thus saving money and time. However, other commentators have been less complimentary as they feel that a principles-based code is not an adequate solution to the problems experienced with the current statutory dismissal and disciplinary procedures, and that greater clarity and certainty should have been provided.
However, the problems of the current statutory regime highlighted by the Gibbons Review meant that a change was most definitely required. Provided employers take a sensible approach in applying the revised code and take guidance if they are unsure, it is to be hoped that the revised code will indeed usher in a less complicated approach to dealing with workplace disputes.
How will things differ under the revised code from the statutory dispute regulations?
The main changes when the revised code comes into operation will be as follows:
- It will not apply to dismissals for reason of redundancy – although a full and fair redundancy process will still need to be followed to avoid unfair dismissal claims and the collective redundancy regime will continue to apply in relevant situations.
- It will not apply to dismissals due to the non-renewal of fixed term contracts.
- It will encourage the use of external mediators to resolve disputes.
- It will place greater emphasis on employees to behave more reasonably.
- It will provide new guidance on dealing with overlapping grievance and disciplinary cases and collective grievances.
- In misconduct cases, the code says different people or parties should carry out the investigation and disciplinary hearing.
- Employees should be provided with more information – for example, copies of written evidence and witness statements – by employers prior to a disciplinary meeting.
- Greater detail has been included in relation to what an employee’s ‘companion’ can and cannot do during a meeting.
- The code provides that employers should make a decision on the evidence available where an employee is persistently unable or unwilling to attend a disciplinary meeting without good cause.
- Employees will have the right to call witnesses.
Chris Bain is a solicitor with Thomas Eggar