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New
Dispute Resolution Regulations The
Employment Act 2002 (Dispute Resolution) Regulations, published
on 12 March 2004, set out the circumstances in which the new
statutory procedures introduced by the Employment Act 2002 will
apply. The Regulations are due to come into force on 1 October
2004 and aim to promote dispute resolution in the workplace
so that fewer cases end up before a tribunal. To
that end, they impose minimum disciplinary and grievance procedures
on all employers, existing employees and new employees from
the outset of their
employment. However, please note that in relation to unfair
dismissal claims, the normal 1 year minimum service requirement
still applies and a failure to follow
the procedures does not give rise to a separate freestanding
right to claim against the employer. Those
familiar with good practice and unfair dismissal case law will
recognise the basic framework of the new procedures. However,
the procedures will be mandatory rather that merely advisable,
and in addition to existing good practice and unfair dismissal
principles rather than an alternative. Currently,
when managing disciplinary and grievance hearings, broadly speaking,
an employer needs to consider three areas. First, the right
not to be unfairly
dismissed as set out in s.94 of the Employment Rights Act 1996.
Secondly, the right to be accompanied to a disciplinary or grievance
hearing as set out in s.10 of
the Employment Relations Act 1999. Thirdly, good practice as
set out in the ACAS Code of Practice and in company disciplinary
procedures which may be
incorporated into the contract of employment or set out in a
non-contractual policy.
The incoming statutory dispute resolution Regulations provide
a fourth area for consideration. Statutory
disciplinary and dismissal procedures
The
disciplinary procedures will not apply where an employer gives
oral or written warnings, but will if the threatened sanction
goes further, for example, suspension without pay, demotion
or dismissal. There are two forms of this procedure, ‘standard’
and ‘modified’. The
standard procedure has three steps:
- the
employer writes to the employee explaining the nature of
the allegations and inviting him or her to a disciplinary
meeting;
- a
meeting is arranged and the employee must take all reasonable
steps to attend the meeting. The employer should then inform
the employee of its decision and of the right to appeal
if he or she is not satisfied with the decision;
- the
appeal meeting (if necessary) is held. After the appeal
meeting, the employer should inform the employee of its
final decision.
Checklist
- A written
invitation to the disciplinary hearing should contain:
- the nature of allegation (mandatory); and
- a reminder of the right to be accompanied (good practice). - The
disciplinary hearing should take place before any action
is taken, except in the case where the disciplinary action
consists of a suspension (mandatory).
- The
disciplinary hearing should not take place unless the employer
has informed the employee of the nature of the allegations
(mandatory).
- The
disciplinary hearing should be set with sufficient time
for the employee to prepare, usually at least 48 hours after
receipt of the invitation letter (good practice).
- The
employee has a right to be accompanied to the disciplinary
hearing by a trade union representative or colleague and
the hearing date may have to be delayed to accommodate the
employee’s choice of representative (mandatory).
- The
employer should hold the meeting in as private a location
as possible and ensure there are no interruptions (good
practice).
- At
the meeting, the employee should be allowed to set out their
case and answer any allegations that have been made. The
employee should also be allowed to ask questions, present
evidence, call witnesses and question any witnesses called
by the employer (good practice).
- The
Employment Act 2002 (Dispute Resolution) Regulations, published
on 12 March 2004, set out the circumstances in which the
new statutory procedures introduced by the Employment Act
2002 will apply. The Regulations are due to come into force
on 1 October 2004 and aim to promote dispute resolution
in the workplace so that fewer cases end up before a tribunal.
- Before
making any decision on disciplinary action, the employer
should take account of the employee’s disciplinary
and general record (good practice).
- The
employer should inform the employee of its decision and
of the right to appeal where relevant (mandatory).
- If
an employee does wish to appeal, he or she must inform the
employer (mandatory).
- The
appeal meeting need not take place before the dismissal
or disciplinary action takes effect.
- The
employer must inform the employee of the outcome to the
appeal (mandatory).
If
an employer believes that an employee may be guilty of gross
misconduct and liable to be dismissed summarily, it is still
important to establish the facts of the
case before taking any action. It is always high risk to dismiss
without first giving an employee an opportunity to put forward
a case at a disciplinary meeting. When an
employer does dismiss instantly, without commencing disciplinary
procedures, it is still legally required to give to the employee
written reasons for dismissal and to
hold an appeal meeting, if the employee wishes. The
modified procedure, for use in cases of gross misconduct after
the decision to dismiss has already been made, has only two
steps: (1)
the employer sends the employee a letter setting out grounds
of misconduct;
(2) the appeal meeting (if necessary) is held, after which the
employer must inform the employee of its final decision. Checklist (1)
The letter should detail:
- the
nature of the employee’s alleged misconduct which led
to the dismissal
(mandatory); - the
basis for thinking at the time of the dismissal that the
employee was guilty of the
alleged misconduct (mandatory); - a
reminder of the right to be accompanied (good practice);
and
- the
right to appeal (mandatory).
(2)
If an employee does wish to appeal, he or she should inform
the employer who must then invite him or her to attend a meeting
after which the employer must inform the employee of its decision
(mandatory). Maintaining
records It
is good practice and in the interest of both employers and employees
to keep written records of the disciplinary process as it progresses,
including:
- the
complaint against the employee;
- the
employee’s defence;
- findings
made and actions taken;
- the
reason for actions taken;
- whether
an appeal is lodged;
- the
outcome of the appeal; and
- subsequent
developments.
There
are various circumstances where the statutory disciplinary procedures
do not apply, for example where all employees are dismissed
and then re-engaged,
certain instances of redundancy, industrial disputes, or where
the employee is found to be an illegal worker. Statutory
grievance procedures
The
grievance procedures follow the same two forms as the disciplinary
procedures. The standard procedure applies in respect of any
grievance about which the
employee could make a complaint to a tribunal, for example,
discrimination, unauthorised deduction of wages or unfair dismissal.
The standard procedure has
three steps:
- the
employee gives to the employer written notice of the grievance.
If the grievance is not in writing, in most cases, the employee
loses the right to have the case heard by a tribunal;
- the
employee is invited to attend a meeting by the employer
to discuss the grievance. The employer should then inform
the employee of its decision and the right to appeal;
- the
employee informs the employer if he or she wishes to appeal
the decision. After the appeal meeting, the employer should
inform the employee of its final decision.
Checklist
- The
grievance hearing should not take place unless the employee
has first set out the grievance in writing for the employer
(mandatory).
- The
grievance hearing should not take place unless the employer
has had a reasonable opportunity to consider its response
to that information (mandatory).
- The
employee should be informed of the right to be accompanied
to the meeting (good practice).
- The
employer should ensure that the hearing is not interrupted
and the grievance is treated confidentially (good practice).
- If
at any point the employer is unsure how to deal with the
grievance, it may be sensible to adjourn the meeting to
get advice (good practice).
- The
employer should respond in writing to the employee within
reasonable time, five days is normally long enough (good
practice).
- If
the employee does wish to appeal, he or she must inform
the employer (mandatory).
- The
appeal should be heard by a more senior or at least a different
manager (good practice).
- The
employer must inform the employee of the outcome to the
appeal (mandatory).
The modified procedure will only apply after termination
of employment. The employer should not have been aware of
the grievance before the employment ceased, or if it was
aware, the standard grievance procedure should not have
been commenced or completed before the last day of employment.
Both parties must also have agreed in writing to apply the
modified procedure. This has two steps:
- the
employee gives to the employer written notice of the grievance
and the basis for it;
- the
employer sets out its written response to the employee.
Maintaining
records Again,
it is good practice to keep written records detailing:
- the
nature of the grievance raised;
- the
employer’s response;
- action
taken;
- reasons
for action taken; and
- whether
there was an appeal, and if so, the outcome.
All
records from either the disciplinary and grievance procedures
should be treated as confidential and kept in accordance with
the Data Protection Act 1998. Exceptions
There
are cases in which the Regulations anticipate that forcing the
parties to go though the statutory procedures will be inappropriate.
These are where: •
either party has reasonable grounds to believe that going through
either procedure would result in a significant threat to themselves,
others or property; •
either party has been subject to harassment and has reasonable
grounds to believe that going through either procedure would
perpetuate that harassment; or •
a procedure cannot be started or concluded within a reasonable
period. Effect
on tribunal awards
The
Regulations do not give employees or employers free-standing
statutory rights to sue each other for respective failures to
comply with the statutory procedures. Rather, adjustments can
be made by tribunals to compensation awards in other employment
claims, for example, unfair dismissal and discrimination. If
an employer fails to follow the new statutory procedures, a
dismissal will be automatically unfair (although the normal
requirement of 1 year’s service for unfair dismissal claims
still applies). In such case, the tribunal would increase the
employee’s compensation by between 10 and 50 per cent.
Where an employee fails to follow the procedures, any award
may equally be reduced. ACAS
is currently revising its code of practice on disciplinary and
grievance procedures, to take account of the new regime. The
draft code is available on the
ACAS website at www.acas.org.uk. The code contains guidance
and notes on good practice which tribunals will take into account
when reviewing how a case has been
handled by an employer. Breach
of contract
During
the consultation stage, it was proposed that the statutory procedures
should become terms of every employee’s contract of employment,
so that an employer
who failed to follow the new regime would be in breach of contract.
This proposal has not been adopted in the Regulations, although
the Government will review this issue after two years, having
assessed the extent to which the procedures are being used.
An employer will of course be in breach of contract if it has
incorporated its own disciplinary and grievance procedures into
contracts of employment then does not adhere to them. Base
line
The statutory
procedures only provide a base line for employers. If an employee
is dismissed without the correct statutory procedure being followed,
the dismissal
is automatically unfair. However, even if the employer has followed
the statutory procedures, it must still handle a matter reasonably
– judged, for example, against an
employer’s own company handbook and the ACAS guidelines
– in order to show that the dismissal was fair. Planning
ahead
Companies
should have their disciplinary and grievance policies reviewed
to ensure they comply with and make reference to the new law.
It is important that managers are given training so that they
understand and can implement the new procedures. Employees should
also be made aware of the changes so that the new Regulations
are used constructively and if problems arise, the parties discuss
them and settle any disputes without the involvement of a tribunal. For
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