Resolving disputes

New laws on handling dismissal, discipline and grievance issues

Useful links (click on logo)
	Guidance for employers, business advisors, employees. Includes training packages.
	The new Business Link website can help you improve your people management, build your skills and the skills of your employees with our simple guides and useful tools.
	Provides information in English, Welsh, Bengali, Punjabi, Gujarati, Urdu and Chinese
	Comprehensive employment information and practical help
Extensive guidance documentation and guidance on dismissal, discipline and grievance is available to BFM members, visit Members' Area

The Disputes Resolution Regulations (2004) will take effect from 1st October 2004. The intention is to ensure that employers and employees follow statutory minimum dismissal, disciplinary and grievance procedures. This is in order to encourage workplace dialogue and to reduce the number of employment tribunal claims. If employers fail to meet their statutory obligations under the procedures and a tribunal hearing takes place, a finding will be made in favour of the employee and as a result, the employer will suffer an increased financial penalty. If employees do not meet their obligations and they win their case, any compensation award will be reduced. Employees will also find that tribunal claims based on grievances will not admitted if they do not initiate the statutory grievance procedure.

Under the statutory procedures, when an employer is contemplating dismissal or imposing certain sanctions short of dismissal, three steps have to be followed:

Step one - notify the employee in writing of the nature of the complaint
Step two - arrange a meeting and make the decision
Step three - allow for an appeal meeting and communicate the decision to the employee

The procedure applies to:

• All ‘direct’ dismissal, including capability, conduct and redundancy, the termination of fixed term contracts and certain ‘compulsory’ retirements. The procedure would not apply to constructive dismissals, certain ‘collective dismissals’ (e.g. where 20 or more employees are affected), dismissals where employment could not continue because of factors beyond the control of the company and where it would not be reasonably practicable to comply with the procedures (e.g. threat of violent behaviour)
  
  
• Any actions short of dismissal relating to conduct or capability such as suspension without or on reduced pay. The procedures do not cover any oral and written warnings or investigation suspensions on full pay (however in some cases these may be issues for the grievance procedure).

In extremely rare cases of gross misconduct, summary dismissal without investigation may be justified under the statutory procedures.When this happens, the employer must provide the employee with the written reasons (step 1) for the dismissal and arrange an appeal meeting (step 2). Employers are cautioned against using this modified procedure as few gross misconduct cases could be justified as being fair without some investigation.

If an employee is dismissed and the minimum procedure is not followed, the dismissal is automatically unfair. The employee will receive at least 4 weeks in a basic award and the tribunal has the power to increase any compensatory award by between 10% and 50%. Awards can also be reduced by similar amounts if an employee succeeds with the claim but is found not to have complied with all the obligations or stages under the standard procedure. In order to bring a tribunal claim, the employee must have 12 months’ qualifying service (unless the claim concerns discrimination or another claim that does not require any service qualification). This also applies to the claims based on grievances (see below).

By following the dismissal and disciplinary procedures, the employer will only be doing the minimum expected under statute. Employment tribunals will still consider whether the employer acted reasonably in all the circumstances and will take account of the ACAS Code of Practice on Discipline and Grievance, which in many instances lays down more detailed procedures for an employer to follow to achieve a fair dismissal. The Code has been revised and is available in its final draft form at the ACAS we site – see home page of this site.

The standard three-step grievance procedure involves:

Step one – employee notifies the employer in writing of the grievance
Step two – employer arranges a meeting and conveys decision
Step three – if matter is not resolved, an appeal meeting is held and final decision conveyed

This procedure applies where someone has a serious complaint against the employer (or work colleagues). If the alleged grievance has caused the employee to leave the company, he/she is still obliged to follow the procedure in order for a tribunal to hear the complaint. A modified two-step procedure can be used but only after employment has ended and only when both sides agree that they do not want to have any meetings. In these cases the employee sets out the grievance in writing and the employer must respond in writing.

The grievance procedure applies in cases of constructive dismissal and to grievances based on discrimination as well as to other breaches of employment regulations such as an unlawful deduction of wages. It will not apply to any matter covered by the dismissal and disciplinary procedure. If someone raises a written grievance during the disciplinary process because of the belief that the threatened action is discriminatory for example, the employer can address that grievance during the disciplinary procedure and not fall foul of the statutory obligations. However, if the grievance is raised during the disciplinary appeal meeting or after it, the grievance procedure then needs to be completed as well. Again there are a number of exemptions from the procedure, including certain ‘collective’ grievances raised on behalf of 2 or more employees and in situations where it is not practicable for the procedures to be started or completed. When an individual sends the written grievance to the employer, a period of 28 days must normally elapse before a tribunal claim will be admitted. In order to allow sufficient time to try and settle an issue, the time limit for presenting tribunal applications (normally 3-months) will be extended to 6 months.

As well as ensuring that the stages and obligations of the relevant procedures are fulfilled, a failure to meet any of the following general requirements can breach the statutory procedures and lead to financial penalties:

• Each step and action under the procedure must be taken without unreasonable delay.
• The timing and location of meetings must be reasonable.
• Meetings must be conducted in a manner that enables both employer and employee to explain their cases.
• In the case of appeal meetings which are not the first meeting, the employer should, so far as is reasonably practicable, be represented by a more senior manager than attended the first meeting (unless the most senior manager attended that meeting).

Employees also have rights to be accompanied at disciplinary and grievance meetings by a work colleague or a trade union official.

All employers will be expected to issue employees with written particulars of employment and if they do not, or the particulars are found to be incomplete or inaccurate, an employment tribunal may impose a financial penalty (only when associated with other ‘successful’ claims such as unfair dismissal) of between 2 and 4 weeks pay. The written particulars must set out the rules procedures that apply to grievance and to dismissal and discipline. Alternatively, the employee may be referred to an (accessible) document that contains these procedures. The particulars must be provided before engagement or within 2 months of employment. For a dti model statement you are referred to DTI.