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Dispute Resolution
Following a thorough review of the statutory dispute resolution regulations that came into force on 1 October 2004, the government decided to repeal them with effect from 6 April 2009.
The new system focuses much less on the formal mechanics of how to run a grievance or disciplinary hearing and more on the fairness of the procedure.
The government has also introduced a set of transitional arrangements which apply until the new procedures are fully in place.
When do the new rules apply?
The rules apply from 6 April 2009, so any complaint about something that happened wholly on or after that date must be pursued under the new rules.
Who is covered by the new rules?
They apply to employees only, not workers. In other words, anyone who has a contract of employment.
What do the new rules state?
Rather than stipulate precise steps that employers and employees must follow, the new rules provide basic guidance for handling grievances and disciplinaries through a statutory code of practice produced by ACAS (the government’s conciliation agency).
In particular, the new code emphasises the importance of trying to resolve disciplinary and grievance issues informally, at the workplace. If unsuccessful, the code recommends using a mediator before lodging a formal grievance or an employment tribunal claim.
However, in the event that a dispute cannot be resolved informally, the code sets out the basic requirements of fairness that are applicable and provides what ACAS considers to be the standard of reasonable behaviour in most instances.
The code of practice does not apply to redundancy dismissals, failures to renew fixed term contracts or collective grievance situations.
What does the code of practice state?
With regard to disciplinaries, the new code states that:
• Employers should carry out any necessary investigations without delay to establish the facts of a potential disciplinary issue. Ideally different people should carry out the investigation and disciplinary hearings
• Employers should inform employees in writing of the basis of any alleged misconduct, giving them enough information to allow them to answer the case at a disciplinary hearing
• Employers should give employees the chance to put their side of the story before making any decisions. When giving written notification of the time and venue of the hearing, employers should include copies of any written evidence and inform the employee of their right to be accompanied at the hearing
• At the meeting the employer should explain the complaint and go through the evidence. The employee should be allowed to set out their case, answer any allegations that have been made and have a reasonable opportunity to ask questions, present evidence and call relevant witnesses, having given advance notice that they intend to do this
• After the meeting the employer must decide whether or not to take disciplinary action and inform the employee accordingly in writing. They should then allow employees to appeal any decision to formally discipline them
With regard to warnings, the code states that:
• If the employer decides that there has been misconduct or the employee is not performing satisfactorily, they should usually give a first written warning, explaining that further misconduct or failure to improve performance within a set period will result in a final written warning
• If the misconduct or unsatisfactory performance is sufficiently serious, it may be appropriate to move directly to a final written warning
• A first or final written warning should set out the nature of the misconduct or poor performance and the change in behaviour or improvement in performance required (with timescale). The employee should also be told how long the warning will remain in force and the consequences of further misconduct, or failure to improve performance - for instance that it may result in dismissal
• A decision to dismiss should only be taken by a manager who has the authority to do so. The employee should be informed as soon as possible of the reasons for the dismissal, the date on which the employment contract will end, the appropriate period of notice and their right of appeal
• Some acts (gross misconduct) are so serious in themselves or have such serious consequences that they may call for dismissal without notice for a first offence. But employers should still always follow a fair disciplinary process even in these circumstances
• The disciplinary policy should give examples of acts which the employer regards as gross misconduct – for instance, theft or fraud, physical violence, gross negligence or serious insubordination
• If an employee is persistently unable or unwilling to attend a disciplinary meeting without good cause the employer should make a decision in their absence, on the evidence available to them
With regard to grievances, the code states that:
• Employees should set out a potential grievance in writing, having tried to resolve it informally first of all
• Employers should then arrange for a formal meeting to be held without unreasonable delay and then decide what action to take.
• They should set out their decision, in writing, and, where appropriate, make clear what action they intend to take to resolve the grievance
• The employee should be told that they can appeal if they are not happy with the employer’s decision
• The appeal should be heard without unreasonable delay and at a time and place which has been notified to the employee in advance. It should be dealt with impartially and wherever possible by a manager not previously involved in the case.
The code recommends in general that:
• Employers and employees should raise and deal with issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions
• Employers should allow employees to be accompanied at any formal disciplinary or grievance meeting. (To find out more about the right to be accompanied, go to Thompsons e-Training leaflets.
What happens if the parties do not follow the code?
If, for some reason, the employer or the employee do not follow the code, an employment tribunal has to decide whether that was unreasonable or not by taking various factors into account, such as the size of the business.
It can also adjust awards up or down by up to 25 per cent. So if a tribunal feels that an employer has unreasonably failed to follow the guidance set out in the code, it can increase any award it has made by up to 25 per cent. Where the employee has not followed the code, the tribunal can reduce the award by up to the same percentage.
It is crucial, therefore, for union members to always follow the basic procedures in the new code to avoid their compensation being reduced.
The code is being supplemented by guidance from ACAS to help everyone understand it and there will also be much more emphasis on conciliation under the new arrangements.
What are the interim arrangements that apply to grievances?
The 2004 regulations required employees to follow a three-step grievance procedure before they could submit a tribunal complaint. Under the new arrangements, this bar won’t apply if the complaint is about something that happens “wholly on or after 6 April”.
However, the old regime (submitting a written grievance, attending a meeting, and then attending an appeal) will apply if the date of the action that the employee is complaining about (called the “trigger event”) either:
• takes place wholly before 6 April; or
• starts before 6 April and carries on after it
In that case, employees must either trigger the old grievance procedure by lodging a written grievance or lodge a tribunal claim before a “cut-off” date. (If they lodge an ET1 but not a written grievance, they’ll be sent back to do so – so it is better to lodge a written grievance and follow the old procedures.) For cases with a three month time limit, such as discrimination claims, the cut-off point is 4 July 2009. For cases with a six month limit such as redundancy payment claims and equal pay cases, it’s 4 October.
If the trigger event takes place completely on or after 6 April, the statutory grievance procedure does not apply at all which means that tribunals cannot stop cases from going ahead if the employee does not lodge a grievance. On the other hand, since the extension to tribunal time limits are no longer available, the three or six month time limits will apply in the normal way i.e. without the automatic three month extension where a written grievance has been lodged.
What are the interim arrangements that apply to disciplinaries?
Similarly, the 2004 regulations required employers to follow a three-stage procedure if they wanted to dismiss an employee or discipline them (beyond an oral or written warning) because of something to do with their conduct or capability. This involved giving employees a written statement, having a meeting with them and then facilitating an appeal.
Again, a trigger event will decide whether the old regime or the new arrangements apply. The 2004 regulations will still apply if, on or before 5 April 2009, the employer:
• sent a step 1 letter to the employee, or
• held a step 2 meeting, or
• actually dismissed the employee or imposed “relevant disciplinary action” over and above an oral/written warning on grounds of conduct or capability
So even if the penalty is imposed on or after 6 April, the old regime will apply if the disciplinary process starts before then. But when the entire process starts on or after 6 April, the new arrangements apply.
Cases concerning dismissal with an effective date of termination (EDT) falling on or before 5 April come within the old regime, as do any with an EDT of 6 April or later that have come about because the employer set steps 1 or 2 of the old regime in motion prior to 6 April.
What happened to section 98(A)?
Section 98(A) of the 1996 Employment Rights Act which introduced the concept of “procedural fairness” to cases involving dismissal under the 2004 regulations has also been repealed. Instead section 98 (which sets out the potential reasons for a fair dismissal) has been restored to unfair dismissal cases.
The old rules regarding “Polkey” have also been restored to unfair dismissal cases. This is a reference to the famous case of Polkey v AE Dayton Services Ltd, in which the House of Lords said that although generally, employers had to follow proper procedures prior to dismissal, there was one - very narrow - exception when it was reasonable not to.
That was when an employer, in the light of everything that they knew at the time, decided that it would have been completely 'futile' to follow the procedure because it would not have made any difference to the outcome.
Tribunal Jurisdictions to which the new procedures apply
Equal Pay Act 1970
Section 2 Equality clause
Sex Discrimination Act 1975
Section 63 Tribunal jurisdiction
Race Relations Act 1976
Section 54 Tribunal jurisdiction
Trade Union and Labour Relations (Consolidation) Act 1992
Section 145A Inducements relating to union membership or activities
Section 145B Inducements relating to collective bargaining
Section 146 Action short of dismissal, trade union grounds
Para. 156, Sch A1 Detriment in relation to union recognition
Disability Discrimination Act 1995
Section 17A Tribunal complaints
Employment Rights Act 1996
Section 23 Deductions from wages
Section 48 Detriment in employment
Section 111 Unfair dismissal
Section 163 Redundancy payments
National Minimum Wage Act 1998
Section 24 Detriment in relation to national minimum wage
The Employment Tribunal Extension of Jurisdiction (England and Wales) and (Scotland) Orders 1994
Breach of employment contract on termination of employment
Working Time Regulations 1998
Regulation 30 Breach of regulations
Transnational Information and Consultation of Employees Regulations 1999
Regulation 32 Detriment relating to European Works Councils
Employment Equality (Sexual Orientation) Regulations 2003
Regulation 28 Discrimination in the employment field
Employment Equality (Religion or Belief) Regulations 2003
Regulation 28 Discrimination in the employment field
European Public Limited-Liability Company Regulations 2004
Reg 45 Detriment in Employment
Information and Consultation of Employees Regulations 2004
Reg 33 Detriment in Employment
Occupational and Personal Pension Schemes (Consultation by Employers etc) Regs 2006
Reg 17 &
Sch para 8 Detriment in Employment
Employment Equality (Age) Regulations 2006
Regulation 36 Discrimination in the employment field
European Cooperative Society (Involvement of Employees) Regulations 2006
Regulation 34 Detriment re involvement in European Cooperative Society
Companies (Cross-Border Mergers) Regulations 2007
Regulation 51 Detriment re special negotiating body/employee participation
Tribunal Jurisdictions to which the new procedures do not apply
Trade Union and Labour Relation (Consolidation) Act 1992
Section 68A Unauthorised check-off deduction
Section 137 Refusal of employment on TU (non) membership grounds
Sections168-170 (Paid) time off for TU/Learning Rep duties/activities
Section 183 TU complaint of failure to disclose information for CB
Sections189 &192 Protective award & entitlement in collective redundancies
Pension Schemes Act 1993
Sections124 SoS failure to pay contributions to insolvent scheme
Pensions Act 1995
Sections 62-64 Equality clause in pension schemes
Employment Rights Act 1996
Section 11 Failure to provide accurate written statements (written particulars, changes or itemised pay)
Sections 34 Failure to pay guarantee payment
Sections 51 Time off for public duties
Sections 54 Paid TO to look for work during redundancy notice
Sections 57 Paid TO for ante-natal care
Sections 57B Paid TO for dependants
Section 60 Paid TO for pension scheme trustees
Section 63 Paid TO for TU/Employee representatives
Section 63B Paid TO for young person to study/train
Section 70 Remuneration if suspended on medical/maternity grounds
Section 80 Parental leave
Section 80H Flexible working & detriment
Section 93 Failure to provide written reasons for dismissal
Section 188 SoS failure to make a payment on employer’s insolvency
Employment Rights Act 1999
Section 11 Right to be accompanied
Safety Reps etc Regs 1977
Reg 11 Paid TO for safety rep
Health & Safety (Consultation etc) Regs 1996
Sch 2 Paid TO for training
Transnational Information & Consultation Regs 1999
Reg 27 Paid TO
Part-Time Workers etc Regs 2000
Reg 8 Less favourable treatment & detriment
Fixed-Term Employees etc Regs 2002
Reg 7 Less favourable treatment & detriment
Reg 9 Declaration of permanent status
Flexible Working etc Regs 2002
Reg 15 Right to be accompanied & postpone a meeting
Transfer of Undertakings (Protection of Employment) Regulations 2006
Reg 15 Failure to inform/consult
Employment Equality (Age) Regulations 2006
Sch 5 Para 5 Void term of collective agreement or rule of undertaking
Sch 6 Para 11 Failure to inform employee re working beyond retirement
Sch 6 Para 12 Right to be accompanied
Follow this link to read our Disciplinary Checklist.
Last updated 10th March 2009.
