Minister for Employment Relations, Pat McFadden, said:
"In the current economic climate, regulations can be a big concern for business and we want to help simplify them where we can. These changes will save employers valuable time and money.
It's clear the business community wants to see streamlined, straightforward and effective procedures to deal with disputes and workers want to have good safeguards in place to protect them.
We're moving away from the current, rigid legal process for resolving disputes. Instead we're encouraging employers and employees to come together and resolve their issues earlier and informally."

And a judge said

" Rarely can legislation have been so counter-productive. Provisions designed to reduce tribunal disputes have spawned satellite litigation in which arcane and complex points of law have been argued, frequently so remote from reality that they would surprise even the most desiccated Chancery lawyer conjured up by the imagination of a Charles Dickens. "

Arnold & Ors v Sandwell Metropolitan Borough Council:
The Hon Mr. Justice Elias
EAT judgement November 2008

And the profession said the Regs were “loathed” and “despised” .

Bowling & Co experience ?

A small minority of employers came to us having failed to follow the regulations and had to settle cases as a result of that. There were more cases where we were able to use the Regulations to make employees start again or show that the Tribunal could not hear a complaint because of non-compliance.

For various reasons the Regulations were of little assistance to those who were most vulnerable : e.g. workers with genuine psychological problems, true clinical depression or PTSD.

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A Time for Change : What the change is trying to achieve?

March 07 Gibbons Report The Government should:

Support employers and employees to resolve more disputes in the
Workplace

Actively assist employers and employees to resolve disputes that
have not been resolved in the workplace

Make the employment tribunal system simpler and cheaper for
users and government

1. Repeal the statutory dispute resolution procedures set out in the Dispute
Resolution Regulations.

2. Produce clear, simple, non-prescriptive guidelines on grievances,
discipline and dismissal in the workplace, for employers and employees.

3. Ensure there are incentives to comply with the new guidelines, by
maintaining and expanding employment tribunals’ discretion to take into
account reasonableness of behaviour and procedure when making
awards and cost orders.

4. Challenge all employer and employee organisations to commit to
implementing and promoting early dispute resolution, e.g. through
greater use of in-house mediation, early negotiation and settlement.

New Discipline and Grievance : Summary

Under the new procedures direct compulsion and automatic unfair dismissal in the 3 stage Discipline and Dismissal procedure disappears.
Instead if an employer does not follow a fair procedure, and overall behaves unreasonably and unfair dismissal is established, the ET may increase the award by 25% : note this percentage may be changed . If the employee unreasonably fails to co-operate in the procedure, then any award can be decreased by up to the same amount – 25%, again this figure may be changed.
What happens to the current “extension of time” provisions, that can give the employee in a procedure 6 months not 3 to apply to the ET ? They too will disappear.

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Phasing in the new discipline and grievance rules

The proposed arrangements for introducing the new ACAS Code apply to dismissals, disciplinaries and grievances which run across the implementation of the new dismissals, disciplinaries and grievances procedures and ACAS Code on 6 April 2009.

The proposals seem quite straightforward but are different for disciplinaries and grievances:

if the disciplinary procedure starts before the 6th April, then it continues under the old rules (with all the complications about time limits etc). The practical problems of the “old” Regulations were always more serious in relation to discipline and dismissal.

Disciplinary action or dismissal

The existing statutory procedures will continue to apply where, before 6 April 2009, the employer:

1. has sent the employee a step 1 letter; or

2. has held a disciplinary (step 2) meeting; or ( if neither step 1 or 2 have been followed)

3. has taken disciplinary action or dismissed the employee.

If the employer does none of these and on or after 6 April 2009 does take one of these steps then the new ACAS Code of Practice should be followed instead.

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Grievances

The old rules apply

1. If the problem the employee is complaining about occurs on or before 5th April 2009.

2. If the problem starts on or before 5 April 2009 and continues after that date and the employee either

for unfair dismissal and almost all discrimination claims submits a grievance or Tribunal claim on or before the 4 July 2009

for equal pay, or redundancy pay claims submits a grievance or Tribunal claim on or before the 4 October 2009.

If the problem the employee is complaining about in their grievance takes place on or after 6 April 2009, then apply the new ACAS Code of Practice.

An element of the “old” grievance rules will continue to be relevant until July 2009 and a smaller part until October 2009.

See the draft Employment Act 2008 (Commencement No. 1 Transitional Provisions and Savings) Order 2008

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ACAS 3 Section Code ( draft)

Foreword
Introduction
Discipline
The right to cross-examine
If the employee refuses to attend a disciplinary interview ?
The employer’s sanctions
Unreasonable failure by the employer in the disciplinary process
Defective procedure and the inevitable dismissal
Grievances
Collective grievances

Foreword

Employers and employees should always seek to resolve disciplinary and grievance issues in the workplace. Where this is not possible employers and employees should consider using an independent third party to help resolve the problem. The third party need not come from outside the organisation but could be an internal mediator, so long as they are not involved in the disciplinary or grievance issue. In some cases, an external mediator might be appropriate.

This wording is softer and less emphatic than the previous version.
The code does not apply to redundancy or fixed term contracts.
However the consultation requirements in redundancy are a comprehensive free-standing process, so this is no get out of jail free card. The dismissal of an employee on the expiry of a fixed term contract must be justified in the normal way and they also are no get out of jail free card.

ACAS :

More comprehensive advice and guidance on dealing with disciplinary and grievance situations is contained in the Acas guidance booklet [name to be decided].”

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Introduction Guidelines for employers dealing with both discipline and

grievance.

Follow a prompt and consistent process.

Some recognition that employers vary in size

3. Where some form of formal action is needed, what action is reasonable or justified will depend on all the circumstances of the particular case. Employment tribunals will take the size and resources of an employer into account when deciding on relevant cases and it may sometimes not be practicable for all employers to take all of the steps set out in this Code.
Disciplinary situations “include misconduct and/or poor performance”.
There is a strong hint there should be a specific capability procedure.
Grievances Concerns, problems or complaints that employees raise with
their employers.

Disciplinary Procedure

Disciplinary situations

The Code applies to the broad spectrum of the Discipline process and the old rule that the 3 stage process only applied if dismissal suspension or an equivalent sanction was a possible outcome disappears.

1 Establish the facts; 2 inform the employee in writing of the problem 3 hold a meeting (same right to be accompanied); 4 notify of decision and 5 allow an appeal .

Emphasis ?

1 Clear formal recommendation to separate investigation and decision making in misconduct cases if possible.

Statutory right to be accompanied does not apply to investigation meeting, but allowing someone to accompany employee is good practice.

An employee’s request to be accompanied can be oral.

2. Notify case to meet clearly to employee

It would normally be appropriate to provide copies of any written evidence, which may include any witness statements, with the notification.

Keep it all in 1 pack if possible – don’t send it in bits or installments unless there is no choice.

3. Conduct a fair meeting

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The employee should also be given a reasonable opportunity to ask questions, present evidence and call relevant witnesses. They should also be given an opportunity to raise points about any information provided by witnesses. Where an employer or employee intends to call relevant witnesses they should give advance notice that they intend to do this.

The companion should be allowed to address the hearing to put and sum up the worker’s case, respond on behalf of the worker to any views expressed at the meeting and confer with the worker during the hearing. The companion does not, however, have the right to answer questions on the worker’s behalf, address the hearing if the worker does not wish it or prevent the employer from explaining their case.

If at all possible have a “scribe” : a person who can take notes. In a small company it is very possible the meeting will be held by the owner and the note-taker will be his PA. Its better to have the PA there taking notes than to have no one at all.

Practical Point

It is not suggested that the employee either has the right to question or cross-examine the employer’s witnesses.

Will such a refusal be fair overall ?

This depends upon the circumstances.

In “Santamera” 2003 the employee was not allowed to cross-examine witnesses but overall the EAT considered the employer used a fair procedure.

The employee argued that by failing to allow her the opportunity to cross-examine her accusers the employer had failed to provide her with the opportunity to establish the relevant facts. The employer argued that the hearing had been conducted in accordance with the ACAS code of practice and the rules of natural justice. The employee had been provided with details of the case against her, given the opportunity to state her case, and the person carrying out the hearing had acted in good faith. The EAT considered the procedure fair overall

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If the employee refuses to attend a disciplinary interview ?

"Where an employee is persistently unable or unwilling to attend a disciplinary meeting without good cause the employer should make a decision on the evidence available."

Employers should be wary of proceeding in the absence of the employee. Note the word persistently, which seems to be very vague. It must be more than once ! Under the 2004 Regs if an employee failed to attend 2 meetings the Disciplinary process was deemed to be concluded. That clear and unambiguous position has not been included in the new Code. An employer should offer an employee at least 2 meetings. Pending the inevitable arguments in Court which will follow, hopefully 3 strikes and you’re out seems safe.

Practical Point

Employers should be wary of proceeding in the absence of the employee. Note the word persistently, which seems to be very vague. It must be more than once, but is not showing up three times “persistent” ? If this stays in the Code, litigation is very likely.
4 Decide on appropriate action :

the employer’s sanctions

The oral warning seems to have disappeared.

The code recommends written warning, or final written warning or dismissal, a simpler process for employers.

Final warning as response to first disciplinary complaint ?
19 If an employee’s first misconduct or unsatisfactory performance is sufficiently serious, it may be appropriate to move directly to a final written warning. This might occur where the employee’s actions have had, or are liable to have, a serious or harmful impact on the organisation.

5. Right of appeal

Unreasonable failure by the employer in the disciplinary process

If the tribunal feels that an employer has unreasonably failed to follow the guidance set out in the Code it can increase any award they have made by up to 25%... but what is unreasonable ?
Expect a fairly strict approach here : look at the penalties imposed by the Tribunals in non-consultation cases, where the Tribunal starts at the maximum penalty and leaves it to the employer to justify a lesser one.
Normally in law an act/omission is only unreasonable if no reasonable person would commit it; and the Tribunals have always recognised the need to preserve the decision making and judgment calls of the employer.
Whilst all this might suggest that there will be scope for a reasonableness defence, the smart employer will allow someone else to establish this at Court.

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Defective procedure and the inevitable dismissal

It appears quite likely that under the new scheme if an employer unreasonably fails to comply with a procedure the dismissal will be found to be unfair, even if the failure makes no difference and under a fair procedure the employee would have been dismissed anyway. This is inevitably going to bring back the percentage reduction rule that any compensatory award will be reduced to reflect the likelihood that under a fair procedure the employee would have been dismissed.

At present if the employer has complies with the 3 step statutory dismissal and disciplinary procedure but has fails to follow fair procedure on other grounds if following that step would have made no difference to the outcome of the case the employer has a defence to the claim. This part of the 2004 Regulations was seen as correcting a difficult area of law, but this rule has disappeared in the new scheme.

Grievances

1. Employee notifies grievance 2 employer holds meeting 3 employer decides response and notifies employee 4 right of appeal
"A grievance should be raised in writing."
This is firmer than the previous draft. However the grievance does not have to be in writing to be effective.
The employee should be informed that they can appeal if they are not content with the action taken.
This is a firmer wording than the earlier draft. It is considered this places more of a, an emphasis on the employee to appeal if they are not happy and a clear obligation on the employer to have an appeal process.

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Overlapping grievance and discipline

44. Where an employee raises a grievance during a disciplinary process the disciplinary process may be temporarily suspended in order to deal with the grievance. Where the grievance and disciplinary cases are related it may be appropriate to deal with both issues concurrently.
Overlapping grievance and disciplinary issues are a common problem and are technically quite tricky under the current statutory procedures. The technical problems may be a lot less under the new regime, but for small and medium sized employers the practical problem of manpower and a shortage of investigators and decision makers is a serious issue.

Collective grievances

45. The provisions of this code do not apply to grievances raised on behalf of two or more employees by a representative of a recognised trade union or other appropriate workplace representative. These grievances should be handled in accordance with the organisation’s collective grievance process.
This prevents the risk of a 25% adjustment where such grievances are not handled individually.

Themes from ACAS June Non-Statutory Guidance

We expect 99% of this guidance to be re-issued

Generally

Privacy of discussions with employee.

Offer constructive criticism.

Suggest Clear guidelines for improvement.

Clarity : decide if the process is informal ( outside the Discipline and Grievance Code) of formal. Make sure the employee understands which it is.
Disciplinary and grievance process should be speedy.
Consider the position of persons for whom English is not a 1st language
Keep written records ; issue as appropriate to employee so there is no dispute about what has happened.
Information can be held back to protect witnesses.

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Warnings

First warning ? 6 months.
Final warning ? 12 months – unless exceptional circumstances justify a longer warning.

Suspension
Suspension should only be if necessary and is not normal.
Suspension without pay requires contractual term.

ACAS case study

Discipline in practice – 2

A member of staff in accounts makes a number of mistakes on invoices to customers. You bring the mistakes to his attention, make sure he has had the right training and impress on him the need for accuracy but the mistakes
continue.

You invite the employee to a disciplinary meeting and inform him of his right to be accompanied by a colleague or employee representative. At the meeting the employee does not give a satisfactory explanation for the mistakes so you decide to issue an improvement note setting out: the problem, the improvement required, the timescale for improvement, the support available and a review date. You inform the employee that a failure to improve may lead to a final written warning

Our Practical Point

The employer should make it plain to the employee that this is a disciplinary process and the employee has a right to appeal.

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Discipline in practice – 4

A member of your telephone sales team has been to lunch to celebrate success in an exam. He returns from lunch in a very merry mood, is slurring his speech and is evidently not fit to carry out his duties. You decide to send him home and invite him in writing to a disciplinary meeting setting out his alleged behaviour of gross misconduct for which he could be dismissed. Your letter includes information about his right to be accompanied by a colleague or employee representative.

At the meeting he admits he had too much to drink, is very apologetic and promises that such a thing will not happen again. He is one of your most valued members of staff and has an exemplary record over his 10 years service with you. You know that being unfit for work because of excessive alcohol is listed in your company rules as gross misconduct.

In view of the circumstances and the employee's record, however, you decide not to dismiss him but give him a final written warning. You inform the employee of his right to appeal.

Our Practical Point How long is the warning ?

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ACAS – what next

Increased funding and a greater role as conciliators; time limits on conciliation removed; better help-line etc.

What does ACAS stand for & where is it going ?
Technically it stands for Advisory Conciliation and Arbitration Service

Will the new emphasis on mediation become compulsory ?

Will ACAS become involved in a new fee-paying compulsory mediation scheme ?

Will employers have to foot the bill ?

Michael Gibbons ( Nov 2008) : if “… the hope we have of reducing the number of cases at tribunal is not fulfilled. If there is an unwanted increase in tribunal claims, no-one is going to change their mind about the direction we are going in. If there has not been great success then we have to find new ways of enforcing these messages. A potential answer is what New Zealand and South Africa do, which is to make mediation mandatory."
He thinks the ACAS code makes Tribunals a last resort.

Time will tell.

Legal representation in workplace discipline hearings

The High Court has held that in certain circumstances, an employee has the right to be represented by a lawyer at internal disciplinary hearings, not just a workplace colleague or union official.
This is of practical importance to employers and employees with "vulnerable" clients, patients, pupils etc or anyone working in a regulated area.

• Facts

G. was employed as a music assistant at the X School. It was alleged he kissed a 15 year old boy. After disciplinary proceedings G. was dismissed. The School had a duty to report G. to the Secretary of State for Children Schools and Families to decide if he should be entered on the register of those who are unsuitable to work with children.

• Legal issues

G. asked that at the internal disciplinary hearings he be represented by his legal representative. The employer school refused.

G. alleged that the refusal to permit legal representation at the internal hearings amounted to a breach of Article 6 of the ECHR (right to a fair trial). In judicial review the Administrative Court held that :

• the school was required to have regard to Article 6 of the ECHR.

• the internal disciplinary and appeal procedures must be viewed as part of the same procedure as the Secretary of State's procedures for the entry onto the register of persons unsuitable to work with children. Because of the gravity and impact of the allegations - the serious consequences of a dismissal - school X should have allowed G to be represented at the disciplinary hearing by his legal representatives and not just the normal trade union rep or fellow worker.

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• the School's disciplinary process and the Secretary of State's barring process are truly both part of a single non-criminal process. Although it is not criminal the consequences of the allegation are so severe that G. is entitled to extra protection under the ECHR right to a fair trial.

• the potential to claim unfair dismissal in the Employment Tribunal would not be an adequate alternative remedy.

The School has been granted permission to appeal to the Court of Appeal. So has G. who lost a separate argument that the internal disciplinary proceedings amounted to a 'criminal' charge.

• Action !

Employers need to check their policies and procedures to cover this ruling.

• What next ?

There must be very many cases where without the full weight of being placed on a Govt barring list the employer's decision has great gravity and impact and the allegations have very serious consequences. It is quite likely that this case (if upheld on appeal) will be extended into more conventional jobs where there are no barring lists but dishonesty or serious personal misconduct has serious consequences.

Other seminar papers

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By Peter Miller, Head of Employment Law at Bowling & Co
62 Broadway, Stratford, London E15 1NG
Tel: 020 8221 8000 Fax: 020 8519 5504
Direct Telephone: 020 8221 8065
Email: Peter.Miller@bowlinglaw.co.uk
Website: www.bowlinglaw.co.uk

This Article is written as a general guide and is not a substitute for professional advice.
You are strongly recommended to obtain specific professional advice before you take any action.