Disciplinary Rules and Procedure
Key points
The written statement of employment particulars necessarily issued to each and every employee, in compliance with sections 1 to 7 of the Employment Rights Act 1996, must include a note:
§ specifying any disciplinary rules applicable to that employee or referring him (or her) to some other document that specifies those rules (always provided that the employee has reasonable opportunities of reading that other document during his working hours, or it is made reasonably accessible to him in some other way);
§ specifying the name or job title of the person to whom that employee can apply if he or she is dissatisfied with any disciplinary action taken (or penalty imposed) for any alleged breach of those rules; and
§ specifying the procedure (including the time limits) for presenting and pursuing any such application.
If (as is often the case in larger organisations) an employee has the right of appeal to progressively higher levels of management, the procedure for doing so must be explained, either in the written statement itself or in the alternative document referred to in (a) above.
Exemption for small employers
§ Until late 2003, when the present law is to be changed, employers with fewer than 20 people 'on the payroll' (including persons employed in other branches of the same business, as well as those employed by associated employers), need not include a note in the written statements issued to their employees specifying their disciplinary rules and procedures. Nor need the statement refer those employees to some other document containing that information (ibid. section 3). However, once sections 29 to 34 of the Employment Act 2002 come into force, that exemption is to be removed. After then, all employers, large as well as small, will be duty-bound to develop minimum statutory disciplinary and dismissal procedures (DDPs) (as well as statutory grievance procedures). Indeed, it will be an implied term of every contract of employment that the statutory DDP is to apply in circumstances specified in regulations to be made by the Secretary of State for Trade & Industry. Under those regulations, employment tribunals will be empowered to vary compensatory awards by up to 50 per cent where either the employer or the applicant employee has failed to use those minimum statutory procedures.
§ The statutory DDP will comprise a three-step standard procedure for dealing with disciplinary issues in the workplace. For small employers, there will be a modified two-step procedure. Both will involve meetings between one or more members of management and an employee.
Disciplinary rules
§ In the interests of health, safety and efficiency, let alone good order and satisfactory working relations, an employer should see to it that his employees know and understand what is expected of them and what penalties will be imposed if they break the rules. Some forms of behaviour will be self-evidently unacceptable; others, not. For instance, the average employee should not need to be reminded that anti-social behaviour (such as fighting, physical or verbal assault, sexual harassment, racial abuse, drunkenness, lewdness, theft, fraud, or the use of non-prescribed drugs) is just as unacceptable in a working environment as insubordination, persistent absenteeism, malingering, sluggishness, a breach of confidentiality, damage to company property, and any intentional or reckless disregard for health and safety rules.
§ But some forms of conduct will not be so self-evidently wrong or dangerous. For instance, it would be prima facie unreasonable and unfair to dismiss a young or inexperienced catering worker for a first breach of the Food Safety (General Food Hygiene) Regulations 1995 if he or she had never been told of the existence (let alone the requirements) of those regulations. The same applies to the factory worker unfamiliar with health and safety legislation or with the risks associated with certain hazardous substances.
§ ACAS Code of Practice 1 on Disciplinary & Grievance Procedures reminds employers that, when drawing up their rules, their aim should be to specify clearly and concisely those necessary for the efficient and safe performance of work, and those whose purpose it is to maintain satisfactory relations within the workforce and between employees and management. 'Rules,' says the Code, 'should be set out clearly and concisely in and be readily available to all workers, for example, in handbooks or company Intranet sites. Managers should make every effort to ensure that all workers know and understand the rules, including those whose first language is not English or who have a disability or impairment (eg, the inability to read). This may be best achieved by giving every employee a copy of the rules and by explaining them orally. In the case of new employees, this should form part of an induction programme. It is also important that managers at all levels and worker representatives are fully conversant with the disciplinary rules and that the rules are regularly checked and updated where necessary. Copies of the Code are available from ACAS Reader Ltd, PO Box 16, Earl Shilton, Leicester LE9 8ZZ (Tel: 0870 242 9090) or from website: www.acas.org.uk.
| Note | Although the ACAS Code of Practice encourages employers to draw up rules necessary for the 'efficient and safe performance of work', section 3(2) of the 1996 Act states that the requirement to specify disciplinary rules and procedure does not apply to rules, disciplinary decisions or procedure relating to health or safety at work. However, it should be pointed out that section 2(2)(c) of the Health & Safety at Work etc Act 1974 imposes a duty on every employer to provide 'such information, instruction, training and supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of his employees'. Similar reinforcing provisions are to be found in regulations made under, or saved by, the 1974 Act. |
§ Many disciplinary rules will be common to all employing organisations. Others will be specific to the trade or industry in which the employee is engaged. For example, the licensee in a public house or hotel (anxious not to forfeit his or her liquor licence) would make it clear to his staff that they will be summarily dismissed if they sell or supply alcohol to persons who are, or appear to be, under the age of 18. The factory manager will be inclined to deal equally severely with employees found eating, drinking or smoking in prohibited areas (eg, in premises regulated by the Control of Lead at Work Regulations 2002). And so on.
§ Most disciplinary rules will impose greater or lesser penalties for the following:
a. Persistent late attendance/poor timekeeping.
b. Theft or fraud.
c. Unauthorised possession of (or wilful damage to) company property.
d. Disclosure or misuse of confidential information concerning the company's business dealings, processes, methods of operation, activities or plans.
e. Drunkenness or the use of non-prescribed drugs while on duty.
f. Gross insubordination.
g. Fighting, physical assault, or abusive or threatening behaviour directed at customers, clients or fellow employees.
h. Intentional or reckless disregard for safety and hygiene rules.
i. Sexual harassment, racial abuse, abuse of the disabled, and other forms of socially-unacceptable conduct.
j. Abuse of the employer's sick pay scheme.
The list is not intended to be exhaustive, but it does encompass problems common to (or likely to be encountered at one time or another within) most employing organisations.
§ Once he has drawn up his rules, the employer should make it known to his employees that certain types of misconduct will warrant summary dismissal for a first offence and that other, less serious, offences will usually lead to dismissal (or a lesser penalty) if the offender fails to respond to formal verbal and written warnings. For instance, unauthorised absenteeism in a large organisation will ordinarily prompt a word of caution from the employee's supervisor, followed by a formal verbal warning and one or two written warnings if the offence is repeated. In the small organisation with just a handful of staff (eg, an office, shop, workshop or cafeteria), a single instance of unexplained (or inexcusable) absenteeism could be very damaging to the employer's business and might well prompt a warning that a repetition will result in immediate dismissal. The important thing is that employees should be aware of the distinction between serious and minor offences and the penalties that apply to each.
| Note | As was pointed out by the House of Lords in Polkey v Dayton Services Ltd [1987] IRLR 503, employers should think twice before abandoning their disciplinary rules and procedures when prompted to dismiss an employee for misconduct or any related reason. A failure to follow those procedures (even in a situation in which an employer is convinced that following them would make no difference to the final outcome) will usually lead to a finding of unfair dismissal. However, once sections 29 to 34 of the Employment Act 2002 come into force (late 2003?), with the concomitant introduction of statutory dismissal and disciplinary procedures (DDPs), the tribunals will be empowered to disregard procedural mistakes, beyond the statutory minimum procedures, in unfair dismissal cases, if following full procedures would have made no difference to the outcome. |
§ No employee should be dismissed (with or without notice) until he (or she) has been given a chance to explain his conduct. The expression 'summary dismissal' should not be taken to mean a right to order an employee off the employer's premises without benefit of an interview or an investigation of the facts. If an employee's alleged misconduct is so gross as to warrant immediate dismissal, he should first be given a chance to explain his actions. If this cannot be done immediately, the employee should be suspended on full pay for a brief period (perhaps a day or two) until all the evidence has been collected, sifted and evaluated. If the misconduct is confirmed, then, and only then, should the employee be dismissed. These and related considerations are covered by paragraphs 5 to 33 of the Code of Practice referred to above.
§ Paragraph 9 of the code states that disciplinary procedures should:
a. be in writing;
b. specify to whom they apply;
c. be non-discriminatory;
d. provide for matters to be dealt without undue delay;
e. provide for proceedings, witness statements and records to be kept confidential;
f. indicate the disciplinary actions that may be taken;
g. specify the levels of management that have the authority to take the various forms of disciplinary action;
h. provide for workers to be informed of the complaints against them and, where possible, all relevant evidence before any hearing;
i. provide workers with an opportunity to state their case before decisions are reached;
j. provide workers with the right to be accompanied (see Note below);
k. ensure that, except for gross misconduct, no worker is dismissed for a first breach of discipline;
l. ensure that disciplinary action is not taken until the case has been carefully investigated; and
m. ensure that individuals are given an explanation for any penalty imposed;
n. provide a right of appeal – normally to a more senior manager – and specify the procedure to be followed.
| Note | Any worker who is required or invited by his (or her) employer to attend a disciplinary or grievance hearing, has the statutory right to be accompanied at that hearing by a co-worker, a shop steward or a full-time trade union official (per section 10, Employment Relations Act 1999). The chosen companion (if a fellow worker) is entitled to paid time off work to attend the hearing, may address the hearing itself or confer with the worker during the hearing, but will not be permitted to answer questions on behalf of the worker. An employer who denies a worker his (or her) statutory right to be accompanied at a disciplinary or grievance hearing will be ordered to pay the worker up to two weeks' pay by way of compensation. A worker who is disciplined, victimised, dismissed or selected for redundancy by his employer for having exercised that statutory right may likewise complain to an employment tribunal (regardless of his age or length of service at the material time) and will be awarded substantial compensation if his complaint is upheld. In cases of alleged unfair dismissal or selection redundancy on those same grounds, the worker in question may also apply to the tribunal for interim relief (see Index for further particulars). |
§ Section 13 of the Employment Relations Act 1999 defines 'disciplinary hearing' as meaning a hearing which could result in the administration of a formal warning to a worker or the taking of some other action in respect of the worker by his (or her) employer, or the confirmation of a warning issued or some other action taken. A 'grievance hearing', on the other hand, is a hearing which concerns the performance of a duty by an employer in relation to a worker.
Verbal and written warnings
§ As was indicated earlier, a manager or supervisor will ordinarily intervene with a friendly word of caution (in private) when an employee commits a minor infringement of his employer's 'house rules'. This approach will usually resolve most minor 'misunderstandings' quickly. But, if stronger action (other than summary dismissal) is called for, the following procedure (as laid down in paragraphs 11 to 16 of the Code of Practice (qv)) should be observed.
a. The employee should first be given a formal verbal warning; or, if the issue is more serious, a first written warning setting out the nature of the offence and the likely consequences if the employee is again guilty of misconduct within a specified period. The employee should be advised that this is the first formal stage of the disciplinary procedure and that a record of that warning will be kept on his or her personal file.
b. If there is a repetition of the same (or the commission of a similar) offence, the next step will be a first or final written warning (as appropriate) that should again specify the offence (or series of offences) and include a statement that a recurrence will lead to suspension or dismissal, or some other penalty, as the case may be.
c. The final step will either be a final written warning or dismissal or, if allowed for by an express or implied term in the employee's contract of employment, demotion, a cut in pay, transfer to another location or department, or suspension without pay. However, disciplinary suspension without pay should not normally be for a prolonged period.
At each of stages (a), (b) and (c), the employee should be interviewed by his (or her) immediate supervisor in the presence of a more senior manager. The employee should be reminded of his statutory right to be accompanied and represented by a colleague of his own choosing or by his trade union representative, either to act as a silent witness or ready and willing to speak up on his behalf. The employee should be reminded of his alleged misconduct and asked to explain his conduct before a decision is taken. He should also be informed of his right of appeal to a higher level of management and the procedure for exercising that right if he considers that the penalty imposed at each of stages (a), (b) or (c) is unfair or unduly harsh.
Records
§ An employer should keep a note or copies of all formal verbal and written warnings served on an employee. These should be treated as confidential and kept under lock and key. Except in agreed special circumstances, they should be destroyed if there are no further instances of misconduct within a period of, say, six or 12 months after those warnings were served
Fairness of disciplinary rules and procedures
§ To be effective, an employer's disciplinary rules and procedure must be accepted as reasonable by those who are covered by them and by those who administer them. In other words, the tribunals and courts can and will challenge the fairness of an employer's disciplinary rules and their attendant penalties if relatively minor offences are characterised as major breaches of discipline and if the rules are interpreted inflexibly.
§ In Laws Stores Limited v Oliphant [1978] IRLR 251, a supermarket cashier was summarily dismissed for neglecting to ring up a single jar of coffee on her cash register. Although there was no suggestion that the employee had been dishonest, the company nonetheless adhered to its own strict rule that a failure to observe the correct till procedure would result in instant dismissal. The Employment Appeal Tribunal (EAT) held that it was unreasonable for the company to impose the extreme sanction of dismissal for a single unexplained departure from the laid- down procedure.
§ There was a similar outcome in the case of Ladbroke Racing Limited v Arnott [1979] IRLR 192. There, a cashier in a betting shop was dismissed for placing a bet on behalf of a pensioner. The employee's contract of employment clearly stated that staff were forbidden to place bets at any time in any of the company's betting shops, and warned that the penalty for a breach of that rule was summary dismissal. The EAT commented that rules that clearly warn of the inevitability of dismissal for certain offences must, nonetheless, be applied sensibly and fairly.
Status of a code of practice
§ The ACAS code of practice referred to in this section lays down guidelines for employers in the preparation, dissemination and application of disciplinary rules and procedures. Although a failure on the part of any person to observe any provision of a code of practice does not of itself render him liable to legal proceedings, that breach is nonetheless admissible in evidence in proceedings before an employment tribunal. But, as Sir Hugh Griffiths remarked in Lewis Shops Group v Wiggins [1973] IRLR 205: 'Even in a case in which the code of practice is directly in point, it does not follow that a dismissal must, as a matter of law, be deemed unfair, because an employer does not follow the procedures recommended in the code. The code,' said Sir Hugh, 'is, of course, always one important factor to be taken into account in the case, but its significance will vary according to the particular circumstances of each individual case.' Once Part III of the Employment Act 2002 comes into force (late 2003?), the code of practice is likely to be amended to remind employers of the need to follow minimum statutory dismissal and disciplinary procedures (DPPs) before taking a decision to dismiss an employee.
§ Once section 29 and Schedule 2 of the Employment Act 2002 come into force (probably in the second half of 2003), all employers (regardless of the number of people they employ) will be required to adopt statutory dismissal and disciplinary procedures (DPPs) which may or may not fall short of their existing rules and procedures. Furthermore, the DPP is to be imported as an implied term in every contract of employment. There is to be a standard DPP and a modified DPP. AThe standard DPP comprises a three-step procedure; and the modified version, a two-steps procedure. Regulations to be made under Part III of the 2002 Act will outline the circumstances in which either of these procedures is to be applied. However, section 31 of the 2002 Act allows that a failure to follow those minimum procedures will result in tribunal awards of compensation for unfair dismissal being increased or reduced by between 10 and 50 per cent. The award will be increased by between 10 and 50 per cent if the failure is attributable to inaction on the part of a respondent employer, or reduced by between 10 and 50 per cent if attributable to a refusal or failure by the complainant employee to comply with requirements of either procedure or to exercise his or her right of appeal under that procedure.
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