October 17, 2008

United Kingdom: The Future Of Disciplinary And Grievance Procedures: The New ACAS Code

The new strengthened ACAS Code, while being preferable to the ongoing statutory rules, still leaves employers bound by strict procedures.

The new Code is a key element in the Government's plans to streamline and simplify the dispute resolution system for the benefit of employees and employers... it will complement the removal of statutory measures by establishing flexible, principles-based guidance to help resolve disputes early.'

This statement, by Minister for Employment Relations Pat McFadden, encapsulates the aim behind the revised Acas Code of Practice for disciplinary and grievance procedures. Following the Michael Gibbons report in 2007, which comprehensively reviewed how to simplify and improve all aspects of employment dispute resolution, the Government decided to scrap the compulsory dispute resolution procedures introduced in 2004. During the consultation, many contributors suggested a strengthened Acas Code would be a better solution, and it is this that will come into effect in April 2009.

What will the new Code involve?

The draft Code aims to encourage informal steps to resolve issues before any action is taken. Although the statutory procedures are abolished, we are not quite taken back to the position before they were introduced in 2004; one important difference between the new draft Code and the pre-2004 position is that an unreasonable failure to comply with the provision of the Code will entitle tribunals to adjust any awards made in relevant cases by up to 25 per cent.

The main provisions of the draft Code are as follows:

  • Issues should be dealt with promptly.
  • Employers should act consistently.
  • Appropriate investigations should be made.
  • Grievance or disciplinary actions should be carried out by managers not involved in the matter giving rise to the dispute.
  • Performance issues should involve immediate managers.
  • Employees should be informed and be able to put forward their case before any decisions are made.
  • Employees have the right to be accompanied.
  • Employees should be allowed to appeal.
  • It is good practice for employers to keep written records.

This part of the Code sets out the key ways for handling disciplinary problems in the workplace, which are to:

  • establish the facts of each case;
  • inform the employee of the problem;
  • hold a meeting with the employee to discuss the problems;
  • allow the employee to be accompanied to a meeting;
  • decide on appropriate action; and
  • provide employees with an opportunity to appeal.

The draft Code also briefly refers to "special cases" involving trade union lay officials and employees charged with criminal offences.


This part of the Code lists the keys to handling grievances in the workplace as follows:

  • Let the employer know the nature of the grievance.
  • Hold a meeting with the employee to discuss the grievance.
  • Allow the employee to be accompanied at the meeting.
  • Decide on appropriate action.
  • Allow the employee to take the grievance further if not resolved.

The draft Code states that it is good practice to consider dealing separately with issues of bullying, harassment, or whistleblowing, in other words to have separate procedures and, potentially, specially trained HR managers designated to those investigations.


Acas' own aims regarding the purpose of the Code bear a strong resemblance to those of the repealed statutory procedures: "Employers and employees should do all that they can to resolve disciplinary and grievance issues in the workplace...where this is not possible employers and employees should consider using a third party to help resolve the problem. Recourse to an employment tribunal should only be a last resort."

One of the main shortcomings with the statutory procedures was that they failed to reduce the number of claims brought before the Employment Tribunal. The question is whether the similarities between the Code and the statutory procedures will lead to a similar result.

In the context of unfair dismissal, employers will welcome the abolition of the statutory procedures as they will no longer be made automatically liable for unfair dismissal due to a technical failure to follow procedures. This is a positive move, eliminating a number of claims that were brought on technical issues without real merits.

However, failure to follow the Code may be punitive. By giving tribunals the discretion to increase awards by up to 25 per cent, which could be substantial in uncapped discrimination claims, if an employer unreasonably fails to comply, it is debatable whether the Code departs far enough from the harsh penalties imposed under the old system. There is concern that this provision will resurrect the painful problems of the statutory procedures, where every part of the process has to be followed meticulously to avoid an increase in an award. In addition to the Code, there will also be further guidelines, currently going through the consultation stage, which, although not regarded as compulsory, may in due course gain some weight in deciding tribunal cases.

The Code is still procedurally based. Although it has helped expand the scope for alternative solutions to tribunal claims with the encouragement of mediators to help settle claims, the grievance procedures still have an adversarial win or lose basis rather than exploring the reasons behind the grievance and what a mutually-beneficial solution may be.

One hopes that, like the repealed rules, it does not become another case of good intentions leading to over-regulation. Until April however, it is unclear how far its intentions will be received.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

From: http://www.mondaq.com

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