Disciplinary action should be used as a means of improving an employee's conduct or work standards rather than only as a punishment. It may not always be necessary to take formal disciplinary action to improve an employee's conduct or performance. Encouragement, guidance, counselling, instruction or a mild rebuke may be all that is required. The aim of disciplinary action should be to bring an employee's conduct or performance back into line with the standard set by the company and so enable the employee to remain in employment. However, the employee's misconduct might be so serious or persistent that it is not feasible to continue to employ him or her.
From a legal perspective, the fact that an employee may end up being dismissed for misconduct affects the way in which all disciplinary issues should be handled. Unfair dismissal law requires employers to act reasonably in deciding to dismiss, and the reasonableness of a decision to dismiss for misconduct may depend upon the way in which the employee's case has been handled throughout the disciplinary process. Further, the law lays down some minimum procedural requirements that must be followed when an employer is contemplating dismissing an employee ( minimum dismissal procedures ). These requirements also apply if an employer is considering imposing a disciplinary sanction other than a warning or suspension on full pay - such as, for example, suspension without pay, demotion or transfer. The guidance on handling discipline that follows reflects these requirements.
ACAS Code of Practice
An employment tribunal hearing an unfair dismissal claim brought by someone who has been dismissed for misconduct is likely to be influenced by whether the employer has followed the guidance in the Code of Practice on disciplinary and grievance procedures produced by the Advisory, Conciliation and Arbitration Service (ACAS) ( Disciplinary and grievance procedures ). This Code does not have the force of law, in that it is not necessarily unlawful to disregard its recommendations. However, employment tribunals and arbitrators appointed under the ACAS Arbitration Scheme (the acas arbitration scheme) must take it into account when deciding whether a misconduct dismissal was fair.
The principles underlying the Code reflect the requirements of natural justice and good practice. According to the Code, these are the core principles that an employer will observe if it is handling discipline reasonably:
- Use procedures primarily to help and encourage employees to improve, where possible, rather than just as a way of imposing a punishment.
- Inform the employee of the complaint against them, and provide them with an opportunity to state their case before decisions are reached.
- Allow employees to be accompanied at disciplinary meetings.
- Make sure that disciplinary action is not taken until the facts of the case have been established and that the action is reasonable in the circumstances.
- Never dismiss an employee for a first disciplinary offence, unless it is a case of gross misconduct.
- Always give the employee a written explanation for any disciplinary action taken and make sure they know what improvement is expected.
- Give the employee an opportunity to appeal.
- Deal with issues as thoroughly and promptly as possible.
- Act consistently.
Disciplinary rules and procedures can form part of an employee's contractual terms. They may, for example, be set out in the employee's written contract or they may be incorporated into the contract by reference to the document where they can be found.
It should be borne in mind, however, that there are distinct disadvantages in making the rules and procedure contractual. If they are contractual, the company needs the employee's consent to change them, unless they state clearly that they may be amended from time to time at the company's discretion. (The implementation of contractual changes is discussed in detail elsewhere in this Guide ( Changes to contracts ).)
If a disciplinary procedure is contractual and an employee has been dismissed without the company following it, he or she could argue that the dismissal was wrongful, that is, in breach of contract. The employee could claim damages representing the value of the wages or salary and other benefits he or she would have received had the disciplinary procedure been followed in full. Where the employee has been disciplined in some way short of dismissal, he or she could resign and claim unfair constructive dismissal, on the basis that the company's failure to follow the procedure amounted to a serious breach of his or her contract of employment.
Although it is inadvisable to make a disciplinary procedure contractual, it may be necessary to include some terms relating to discipline in employees' contracts. For example, if the company wants the right to apply disciplinary sanctions such as suspension without pay, demotion or disciplinary transfer, then it needs to ensure that right is included in employees' contracts. Otherwise, using these sanctions could amount to a serious breach of an employee's contract, giving rise to the possibility of a claim for damages for breach of contract or compensation for unlawful deductions from pay (deductions from pay) or an unfair constructive dismissal claim. Likewise, a company that wishes to have the option of searching employees or their belongings for evidence of misconduct should include a term in employees' contracts giving it that power (searching ).
It is important to note that, even if a company's disciplinary procedure is not contractual, it is highly advisable for the company to follow it. A failure to do so may be held against the company in an unfair dismissal claim.
Some companies make the first few weeks or months of an employee's employment a probationary period. The employee's conduct and performance is closely monitored during this period, to ensure that he or she is suitable for the job. If the employee proves unsuitable, his or her contract may be terminated during or at the end of the period.
Although an employee who is 'on probation' is entitled to notice of termination should it prove necessary to terminate his or her contract, it may not be appropriate to apply the full disciplinary procedure to him or her. If the company's disciplinary procedure forms part of the employee's contract, it is important to make clear that it does not apply if the employee is dismissed during or at the end of the probationary period.
Companies that have lengthy probationary periods should bear in mind that, once an employee has been continuously employed for one year, he or she is entitled to protection from unfair dismissal. Therefore if a company is considering dismissing a probationary employee for misconduct after one year's service or more, it needs to ensure that it acts reasonably, and that includes following a proper disciplinary procedure. Even when the probationer has less than one year's service, it may be advisable to follow the statutory minimum dismissal procedure. Companies may wish to contact their Association for advice ( EEF Associations ).