Employment Alert No. 87 - Statutory Dispute Resolution
September 13, 2004
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Introduction |
New statutory dispute resolution procedures come into force on 1 October 2004. They will apply to every employer in the UK, regardless of size. Their aim is for (i) employers to adopt a new minimum standard when dealing with certain disciplinary or dismissal situations; and (ii) employees to try to resolve their grievances with their employer before lodging tribunal claims. The revised ACAS Code of Practice, which takes into account the new procedures, comes into force on the same date.
The purpose of this Alert is not to cover all of the detail relating to the statutory procedures, but to provide what we hope will be a useful reminder of the key issues. However, please do contact us if you would like any additional information.
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What are the new procedures? |
There are two forms of disciplinary and dismissal (“SDP”) and grievance procedure (“SGP”) – a “standard” procedure and a “modified” procedure.
The standard disciplinary and dismissal procedure - will be used in almost all cases :
- The employer must send the employee, in writing, (i) details of the alleged conduct, characteristics or other circumstances; and (ii) an invitation to attend a meeting to discuss the matter. The employee must also inform the employee of the basis of the complaint (e.g. information collected during an investigation).
- Once the employee has had a reasonable opportunity to consider the information given, a meeting must take place. It must be held before action is taken (except where the action is paid suspension). After the meeting the employer must inform the employee of the decision and of their right to appeal.
- The employee must tell the employer if they wish to appeal. If they do, the employer must invite them to a meeting. After the meeting the employer must inform the employee of the final decision.
The modified disciplinary and dismissal procedure, - only in cases of gross misconduct after termination of employment:
- The employer must send the employee, in writing, (i) the details of the alleged conduct, characteristics or other circumstances; (ii) the reasons for treating the conduct as adequate grounds for dismissal; and (iii) details of the right to appeal.
- The employee must tell the employer if they wish to appeal. If they do, the employer must invite them to a meeting. After the meeting the employer must inform the employee of the final decision.
The standard grievance procedure:
- The employee must set out the grounds of his grievance in writing and give a copy to the employer.
- Once the employer has had a reasonable opportunity to consider the grievance, a meeting must take place. After the meeting the employer must inform the employee of the decision and of their right to appeal.
- The employee must inform the employer if they wish to appeal against the grievance decision. If they do, they the employer must invite them to a meeting. After the meeting the employer must inform the employee of the final decision.
The modified grievance procedure:
- The employee must set out the grounds of his grievance in writing and give a copy to the employer.
- The employer must set out their decision in writing and send a copy to the employee.
The following points apply to all of the procedures:
- Each step of the procedure must be taken without unreasonable delay.
- Employees have the right to be accompanied by a colleague or trade union official at any meeting during the procedure
- Employees must take all reasonable steps to attend meetings.
If an employee is unable to attend a meeting as a result of circumstances outside their control and unforeseen at the time the meeting was arranged, then the employer must rearrange the meeting. - If again the employee fails to attend without good reason a decision may be made in their absence.
- Where possible a senior manager should attend any appeal meeting.
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When do these procedures apply? |
Disciplinary Procedures
- The standard SDP applies whenever the employer is contemplating dismissing the employee, or taking some other form of disciplinary action which is not a warning or paid suspension e.g demotion, transfer of departments or suspension without pay or on reduced pay.
- The standard SDP should, therefore, always be used at the final written warning or dismissal stage of a disciplinary process, ie where it is possible that dismissal may result. However, it is not strictly necessary to follow the statutory procedure where dismissal is not a realistic outcome, although employers may find it unnecessarily complicated to have separate procedures in this way.
- It is important to note that dismissals in this context include dismissals for non-disciplinary offences e.g:
- on expiry of a fixed term contract;
- redundancy;
- long-term sickness; and
- compulsory retirement under the company’s normal retirement age or (if none), the age of 65.
This is likely to have the practical effect of giving employees the right to be accompanied to the final redundancy consultation meeting where dismissal on the grounds of redundancy is confirmed.
- The modified SDP should only be used in very rare cases where it is reasonable for the employer to dismiss the employee for gross misconduct without an investigation. Employers who rely on the modified procedure will be at risk of unfair dismissal as, in practice, it will be very rare that it will be fair to dismiss an employee without first conducting an investigation. To do so would be contrary to the ACAS Code which recommends establishing the facts and giving the employee an opportunity to state their case.
Grievance Procedures
- The SGPs apply to any grievance about an action taken by the employer which could form the basis of a subsequent tribunal complaint under specified legislation. This includes almost all tribunal claims.
- However, if the substance of the grievance is the fact that the employee has been dismissed, the appeal process under the SDP (above) will apply. Also note that the grievance procedure does not apply to whistleblowing disclosures.
- The SGP will apply, however, if an employee feels that disciplinary action has been taken which is discriminatory or was taken for reasons other than the employee’s capability or conduct e.g. a personality clash. However, if he raises these concerns before the appeal stage of the SDP then the appeal will be treated as satisfying the requirements of the SGP. Otherwise, the SGP should be followed in full.
- The standard SGP must be used during employment and may be used after employment has ended. The modified SGP can only be used after employment if both parties consent and the standard procedure has not been commenced prior to termination of employment. In practice, this is likely to be frequently used, as employers may not wish to meet with the employee after he has left employment.
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What are the consequences of not complying with the new procedures? |
Disciplinary Procedures
- Failure to follow the SDPs may result in a finding of automatically unfair dismissal (subject to the employee having over one year’s service), and any compensation awarded will be increased or decreased by 10 – 50% (subject to the cap on damages which is currently £55,000), depending on which party is at fault.
- Employers should note that a dismissal may be found to be unfair even if the statutory procedures are followed to the letter e.g. a Tribunal may find that the employer did not have a fair reason to dismiss or did not behave reasonably before dismissal, in the usual way.
Grievance Procedures
- Failure to lodge a grievance letter and to wait at least 28 days after lodging it will mean that an employee will be prevented from bringing a related tribunal claim, even if it has been made within the usual 3 month time limit. An extension of time (of 3 months) will automatically be granted to allow the employee to go through the procedure.
- The employee must then submit a grievance letter to the employer within 1 month of the expiry of the original 3 month time limit and lodge a new Tribunal claim within the extended timeframe.
- Compensation may also be increased or decreased by between 10 – 50% as for the SDPs.
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What does this mean for employers? |
- Employers should review their current procedures to check that they comply with the new procedures and the revised ACAS Code of Practice.
- In particular, grievance policies may not currently provide for a meeting stage. Grievance policies should cross refer to any separate bullying/harassment and whistleblowing policies.
- Employers should train line managers to ensure that they are familiar with the need to follow the new procedures, and in what circumstances.
