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Disciplinary Procedures

Fair and proper disciplinary procedures are crucial in maintaining good working relations, encouraging good performance from staff, and reducing the risks of claims in the employment tribunal. The law obliges employers to give written details of their disciplinary procedures to all employees (link PAYG Contract of Employment). This must be given, to the employee within the first 2 months of employment.

For many years the tribunals and appeal courts followed a line that required employers to follow a fair and reasonable procedure in light of the resources of the employer and general principles of fairness. To this end tribunals expected employers to follow their stated procedures, and deviation from this would often render a resulting dismissal unfair. In addition they expected employers to give the employee reasonable notice of a disciplinary hearing, have the allegation(s) clearly stated and where relevant, to be provided with all relevant documentation in advance. The opportunity to have a further appeal hearing was also considered a crucial element of a fair disciplinary procedure.

Many employers objected to the approach developed by the tribunals, pointing to slight procedural errors leading to the tribunals concluding that a resulting dismissal was unfair. In response the Government introduced a set statutory disciplinary procedure which sets out a clear process to be followed when handling disciplinary matters. The benefit to employers was that if they followed the statutory procedure correctly the ex-employee would be prevented from arguing that his/her dismissal was unfair on procedural grounds alone. However, the downside for employers was that if they failed to follow the statutory procedure then a resulting dismissal would be classed as being AUTOMATICALLY UNFAIR, and any compensatory award could be increased by an additional 10% to 50% on the sum initially assessed by the tribunal because of this procedural error.

One of the main objectives behind introducing a statutory procedure was to simplify the process for everyone concerned. However, there has been a substantial number of cases involving arguments over the interpretation of the statutory procedure. Consequently the Government has repealed the statutory disciplinary and dismissal procedural rules. In place a new ACAS Code of Practice has been introduced. The approach now required of the Employment Tribunals is that the Tribunal is expected to judge the facts of a case of dismissal by reference to the requirements of the new Code of Practice. If, in unfairly dismissing an employee, the employer has seriously breached the requirements of the Code, and acted unreasonably in doing so, then the Employment Tribunal is entitled to increase the compensation to be paid by the former employer by up to 25%. Most cases concerning this hinge on whether or not the failure to follow the ACAS Code was "unreasonable" or not. 

While the Government has repealed the statutory disciplinary and dismissal procedures, those procedures still apply to any dismissal that occurred before the repeal of the procedures on the 6th April 2009. In any event, the statutory procedures follow a process that would often be regarded as fair by tribunals in relation to most small and medium sized businesses in any event.

Employers should now follow a process that at least complies with the new ACAS Code of Practice if they are to reduce their risks of having found to have dismissed an employee unfairly, and thereby avoid the enhancement on compensation that the tribunals can order because of the unreasonable failure to follow the correct procedure. (link PAYG disciplinary policy)


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