What the abolition of the statutory dismissal, disciplinary and grievance procedures and new ACAS Code of Practice means for employers

The statutory dismissal, disciplinary and grievance procedures are due to be abolished and replaced by a new ACAS Code of Practice on Discipline and Grievance. The change is aimed at encouraging employers and employees to resolve their disputes internally. Employers should make sure they are prepared for the change, and consider ways in which they can adapt their approach to handling workplace disputes in light of the forthcoming legislation.

Why abolish the statutory procedures?

The statutory disciplinary and grievance procedures introduced in 2004 by the Employment Act 2002, were designed to reduce the number of employment disputes reaching tribunals, and encourage employers and employees to reach a solution internally. However, in practice, the statutory procedures have generated a lot of formality and paperwork. In many cases parties to a dispute became adversarial at a much earlier stage and fixated on whether or not there had been compliance with the statutory procedures, rather than focusing on the substance of the dispute and ways of resolving it. In recognition of the failings of the current dispute resolution arrangements, the statutory procedures will be repealed by the Employment Bill 2008.

How will the ACAS Code of Practice work?

From April 2009, employers and employees will no longer have to follow the statutory disciplinary and grievance procedures when dealing with employment disputes. The statutory procedures will be replaced by a new ACAS Code of Practice on Discipline and Grievance, which will be simpler and less prescriptive than the current statutory procedures. The Code of Practice is designed to support employers and employees to resolve disputes fairly and, where possible, prevent disputes escalating into tribunal claims. Unlike the current statutory procedures, a failure to follow the Code of Practice will not give rise to an automatically unfair dismissal. However, in most tribunal claims, an employment tribunal will have the discretion to adjust compensatory awards by up to 25%, where either party has unreasonably failed to comply with the ACAS code.

What is different about the Draft Code of Practice?

Last month ACAS commenced consultation on its Draft Code of Practice on Discipline and Grievance. The draft code is short, simple and non-prescriptive. Rather than burdening employers with specific procedural duties, it aims to focus on broad principles of good practice in dealing with disciplinary issues, including:

  • ensuring that employees understand what they have been accused of;
  • providing employees with an opportunity to explain their side of the story;
  • giving an employee's explanation genuine and open-minded consideration;
  • ensuring that disciplinary and grievance issues are handled consistently, and that like cases are treated alike, and
  • encouraging employer and employees to do all they can to resolve disciplinary and grievance issues internally before resorting to tribunal proceedings.

How should employers prepare for the change?

The abolition of the statutory procedures will require employers to undergo a change of mind-set in dealing with disciplinary and grievance procedures; employers should not merely focus on ensuring they have complied with the minimum procedures imposed on them by statute, but should seek to identify the origins of disputes and ways of resolving them before they reach tribunal. Therefore employers will wish to reassess how they currently handle disciplinary and grievance issues and identify any areas of their approach that could be improved.

The short Draft Code of Practice is accompanied by a draft supplemental guidance booklet giving more detailed advice on how to implement the ACAS code. ACAS is currently inviting comments on its proposals. Whilst the guidance will not be legally binding, in practice it is likely to be used as a guide by tribunals in deciding whether there has been a failure by either party to follow the code, and whether or not any such failure is unreasonable. This guidance will therefore be very influential in a tribunal decision as to whether any adjustment to the compensatory award should be made. Employers should therefore also be aware of the ACAS guidance and seek to put it into practice. In particular, managers who deal with disciplinary and grievance issues on a regular basis should be up to speed on the details of the guidance, and how best to incorporate it into internal disciplinary and grievance practices.

Have your say on the proposals

At the moment the ACAS Code of Practice and supplemental guidance are in draft form. ACAS has invited comments on the proposals, to be received by 25 July 2008. Given the importance of the new Code of Practice in resolving disputes, and its impact on employers, Shepherd and Wedderburn intend to submit a response to the ACAS consultation, highlighting any areas in the code and/or guidance that could be improved. We would be pleased to coordinate any feedback or concerns that you have with the proposals, and incorporate these into our response to the public consultation. We will also distribute a further E-Bulletin summarising your reaction to the draft code.

See: The draft code

See: The supplementary guidance