The Employment Act 2002 (Dispute Resolution) Regulations 2004 were intended to set out clear disciplinary procedures for both employers and employees, but the general consensus is that the procedures are confusing.
The latest employment tribunal figures show a rising trend in claims, a total of 132,577 from April 2006 to March 2007, compared with 115,039 in the previous year. It’s worth noting that half of these claims were brought in respect of unfair dismissal and/or breach of contract.
The average award for unfair dismissal in 2006 was £8,670, compared to £7,303 in the previous year (employment tribunal and EAT statistics 1 April 2006 to 31 March 2007). Such huge costs could be avoided by businesses if thorough documentation and procedures were in place and, of course, followed.
A good disciplinary procedure and policy is vital for effective HR management. If the procedure is drawn up and a sensible and fair ‘code of conduct’ is in place, both the employer and employee will know exactly where they stand. The policy should enable employers to deal with matters consistently and help employees understand the steps that should be followed when undergoing a disciplinary.
It should set out various matters, including a list of examples of what may be regarded as gross misconduct it is important to note that they should not be tightly drafted so as to provide an exhaustive list.
It is also worth mentioning the Acas code of practice, which lists a four-stage process in relation to breaches of conduct:
- oral warning
- first written warning
- final written warning
Grounds for dismissal
There are potentially five fair reasons to dismiss:
- Redundancy: where the work that an employee is doing has ceased or diminished or is expected to cease or diminish.
- Capability: incapability to do the job because of the employee’s incompetence, ill health or lack of qualifications.
- Conduct: This can cover misconduct in relation to various matters, including – but not limited to – breach of the duty of fidelity, sexual harassment, theft, lateness, breach of health and safety regulations, etc.
- Illegality: where it becomes illegal for an employee to remain in the position for which they had been employed.
- Some other substantial reason: This can encompass a wide variety of other situations including, for instance, an employee’s refusal to accept minor change to their employment terms. Retirement was also recently added as a potentially fair reason by age regulations.
Once an employer is able to establish a fair reason to dismiss, it must then be able to show that it followed a fair procedure.
Disciplinary procedure and policy
The statutory procedure must be followed step by step when dismissing an employee. If the three main steps are not adhered to, a case for automatic unfair dismissal may arise and any compensation claim may be increased accordingly.
- Notify the employee in writing of the alleged offence in terms of conduct or performance, detailing the allegations and inviting them to a meeting to discuss the matter.
- Hold a meeting to discuss the allegations. Notify the employee of any decisions reached and inform them they have the right to appeal.
- If the employee wishes to appeal, a further meeting must be arranged with more senior management. The final decision will be made and the employee should be advised in writing of the outcome.
Key tips for the statutory procedure
The employer must clearly explain the allegation that has been made. The employer is advised to take statements from the individual and from any other workers if they have witnessed the act.
The employee must receive reasonable notice of the intended meeting and it is always advisable to state the employee can have representation. Stating that the employee can have ‘representation’ is vital and can help prevent the employer from being taken to a tribunal.
It is essential to have another manager to offer additional advice and an HR practitioner to record details of what is said at the session. In the meeting, make sure the employee fully understands that no decision has been reached. It is advisable to take at least 15 minutes to an hour recess before reaching any conclusion. It is paramount to try to remain objective, hold back the final decision, and do not look as if the final decision has already been made.
If the matter goes to appeal, it is always good to have a five-day adjournment. This will allow the employee time to collate further information and gives the employer time to reflect.
In most cases, the initial meeting should be held by a line manager and then the appeal should be heard by a senior member of staff. A smaller employer might not be able to accommodate this, in which case, an outside consultant can be instructed to hear the appeal.
Employers could find themselves presented with a claim for automatic unfair dismissal if the statutory procedure has not been followed. It would have to be an exceptional case for the tribunal to find that an employer which had dismissed an employee without a meeting was still fair.
To accommodate this the regulations allow employers to use a modified procedure under which an employer is required to write to the employee after the dismissal, setting out the reasons and to hold an appeal meeting if the employee should so request.
However, it is vital that employers should be given the opportunity of putting their side of the story across before deciding what action to take.
What happens in cases of gross misconduct?
Whether the procedure is gross misconduct or not, the procedure is still the same. No dismissal should be instant, as even in cases of gross misconduct there should still be a thorough investigation and disciplinary meeting to establish the facts.
However, legislation allows the employer to use a modified procedure, but this should only ever be used in exceptional circumstances and advice should always be sought on this point before any action is taken. The modified procedure allows an employer to set out in writing the employee’s alleged gross misconduct that has led to the decision to dismiss, but must also give the employee the right of appeal.
All good staff handbooks will outline the difference between misconduct and gross misconduct.
However, employees must realise that even if the act is not specifically stated in the handbook, it does not mean that the offence is not judged as misconduct or gross misconduct.
For example, the gross misconduct list may merely state a criminal act, and some employers may choose to clarify this further, but there is not necessarily any need.
David Green, chief executive, MTA Solicitors
What should a disciplinary and dismissal policy cover?
The disciplinary and dismissal policy should outline the statutory procedure, known as the ‘three steps’. Employers must follow the statutory procedure (which should be explained in their employment handbook) when disciplining an employee:
- Write to the employee, letting them know about the alleged offence, detailing the allegations and inviting them to a meeting to discuss the matter. Employers should then let the employee know that they are entitled to have a representative with them at the meeting, and that they can either be a work colleague or trade union representative.
- Hold a meeting with the employee and notify them of the decision reached, allowing time for an adjournment and informing them of their right to appeal.
- If the employee wishes to appeal, an appeal meeting should be arranged with senior management. The employee should be advised of the final decision in writing.
- Failure to comply with all or part of this procedure and an employment tribunal will automatically render the dismissal unfair.
- Record-keeping and thorough documentation is a necessity. Well-prepared documentation about the employee will help to back up any disciplinary decision. Thorough documentation makes an investigation much easier to justify.
- The employer must clearly explain the allegations that have been made.
- The letter to the employee must make it clear that no final decision has been made.
- It is essential to record the minutes of all meetings as this allows the employer and employee to hold an accurate record of what has been discussed.