Statutory dismissal and grievance procedures were introduced in 2004, under the Employment Act 2002. The current procedures are considered to be too rigid, and unsuitable for some disputes. Recent government consultation resulted in a decision to attempt to increase procedural flexibility by dispensing with the statutory codes and introducing an updated ACAS Code of Practice.

New legislation

The statutory procedures will be repealed under the Employment Act 2008, which is due to come into force on 6 April 2009. Thereafter an employee will no longer have to raise a grievance before commencing a Tribunal claim. Automatic unfair dismissal awards and an uplift in damages of up to 50% will no longer be available where an employer has not followed the current statutory procedure. However, the potential increase in an award where the employer has failed to provide a statement of employment particulars as required by Section 1 ERA remains in force.

Transitional provisions will mean that the statutory procedures will continue to apply to events which occurred before 6 April 2009. For the statutory disciplinary or dismissal procedure, the ‘trigger’ event will usually be the step 1 letter. The statutory grievance procedure will continue to apply where the event to which the grievance relates occurred before 6 April 2009.

Claims brought on or after 6 April 2009 will be subject to the ACAS revised Code of Practice. The revised Code has been approved by the Department for Business, Enterprise and Regulatory Reform (BERR) and will be considered for approval by Parliament soon. Although the Code is not legally binding, adherence to it may be taken into account by a Tribunal and they will have discretion to adjust awards by up to 25% where an employer unreasonably fails to follow the Code.

Employers should note that the Code will not apply to the renewal of fixed-term contracts, or to redundancy dismissals.

Effect on employers

The new legislation will substantially simplify matters for both employers and employees, as the focus will be on the substantive and the procedural issues relating to grievances and dismissals.

Internal disciplinary and grievance policies may require revision in light of the provisions of the new ACAS Code.

However, employers should be aware that the transitional provisions will apply to some disputes for some time to come.