The People Bulletin

The starting point in avoiding claims for unfair dismissal is to have clearly documented rules and a workable disciplinary procedure. The employment contract which refers to the disciplinary procedure should specifically provide that this is non-contractual to avoid the risk of:

• breach of contract claims;
• injunctions restraining the employer from dismissing in breach; and
• resignation and constructive unfair dismissal claims.

Why have a disciplinary procedure?

• to inform employees of the likely consequences of breaking the disciplinary rules/the organisation’s expectations;
• to ensure that staff are treated consistently; and
• to ensure a fair procedure is followed.

The disciplinary procedure should distinguish between misconduct and gross misconduct. Misconduct is conduct which initially requires disciplinary action other than dismissal (normally a series of warnings) such as lateness, unauthorised absence and failure to meet performance standards. If misconduct is repeated or conduct/performance does not improve dismissal may ultimately be an appropriate sanction.

There is no statutory definition of gross misconduct but it is generally considered to be misconduct serious enough to destroy the contract between employer and employee and irretrievably break down the working relationship and trust between them. The procedure should indicate the sort of conduct that is likely to be considered gross misconduct and lead to summary dismissal (dismissal without notice). This may vary between organisations but examples commonly include theft or fraud, physical violence, bullying or offensive behaviour, deliberate damage to company property, misuse of the employer’s property or name, misuse of the employer’s IT systems, alcohol or drug use affecting work, causing loss or damage through serious carelessness, a serious breach of health and safety rules. The procedure must make clear that any examples given are non-exhaustive as it is not possible to anticipate every eventuality.

For smaller organisations it may well be appropriate for the disciplinary procedure to cover capability issues (performance) and the procedure to be followed in cases of sickness absence. Larger organisations may have separate capability procedures but this is not a requirement.

The ACAS Code of Practice on disciplinary and grievance procedures applies¹ and any departure can lead to an Employment Tribunal increasing an award of compensation by up to 25%. However as long as you follow the guidelines set out below, you are unlikely to breach the Code.

The disciplinary process: the investigation

The relevant manager (usually the line manager) must establish the facts as soon as possible if misconduct is suspected. This includes obtaining statements from witnesses and preserving relevant documentation. An investigatory meeting should normally be held with the employee who is the subject of investigation. The manager must inform the employee that it is not a disciplinary meeting.

To defend a claim of unfair dismissal on grounds of misconduct the employer must have a genuine belief in the employee’s guilt, held on reasonable grounds having carried out such investigation as was reasonable in the circumstances. An investigation is important to:

• enable the employer to establish the facts on which his decision will be based;
• to provide the employee with an opportunity to respond to the allegations against him and reveal any mitigating circumstances.

The courts have not laid down rigid criteria of what an adequate investigation involves but an investigation may be inadequate for the following reasons and may render a subsequent dismissal unfair:

• failure to allow the employee an opportunity to offer an explanation;
• failure to take statements from available witnesses before recollections fade or delay in carrying out the investigation;
• employee’s explanation rejected without proper inquiry; and
• reliance on hearsay evidence alone.

Suspension

Suspension should be used as a last resort only if the employee’s presence will impede the disciplinary investigation or he is likely to commit further offences. In Gogay v Hertfordshire County Council (2000) IRLR 7063² a care worker was suspended pending investigation into allegations of sexual abuse made by a child in her care. The employee eventually recovered damages for psychiatric injury and the court criticised the council for not having carried out any preliminary investigation to establish the likely veracity of the allegations and suspending on allegations which were not credible.

The contract should contain an express right to suspend as otherwise the employer may be in breach of contract for failure to provide work.

Post investigation

Many breaches will be dealt with informally and some procedures have an informal stage before formal action is invoked. This may include advice, coaching and counselling or an informal oral warning. The employee should be informed how his performance or conduct will be reviewed and the consequences of any failure to improve i.e. the possibility of formal action. A note should be kept on the employee’s personnel file for reference.

If formal disciplinary action is indicated then the employer must write to the employee setting out:

• the allegations of misconduct (performance etc) and why the employee’s behaviour has not been acceptable;
• invite the employee to attend a meeting specifying the time and place and an indication of the possible consequences;
• advise the employee that he/she has the right to be accompanied by a trade union representative or work colleague; and
• enclosing the evidence to be relied on.

The right to be accompanied

Workers have a statutory right to be accompanied by a trade union representative or work colleague where they are required by the employee to attend disciplinary or grievance hearings and reasonably request to exercise their right.

The employee is entitled to request a postponement of up to five working days in order for his chosen companion to attend.

The companion has the right to:

• address the disciplinary hearing;
• confer with the worker;
• put across the worker’s case;
• sum up the worker’s case;
• respond on the worker’s behalf to any view expressed at the hearing.

The companion may not however answer questions on the worker’s behalf.

If the employer does not allow the employee to be accompanied compensation of up to two weeks pay (currently capped at £350 per week but due to increase to £380 in October 2009) may be awarded and the refusal may affect the fairness of the process and any subsequent dismissal.

The disciplinary hearing

There is no required procedure but to ensure fairness there should generally be a separation between the person presenting the case against the employee (usually the line manager) and the person deciding the penalty who should normally be a senior manager. This is to ensure that the decision is independent and impartial and not tainted by prior involvement.

As a guide, the following procedure should be followed:

1. the person conducting the hearing should introduce those present, confirm the purpose of the hearing and explain how it will be conducted;
2. the person conducting the hearing (the line manager) should then explain the nature of the complaint, reviewing the evidence;
3. call witnesses if oral evidence is required;
4. the employee should have an opportunity to ask questions/cross examine;
5. the employee should present his response calling witnesses if required;
6. the person conducting (line manager) should have an opportunity to ask questions/cross exam the witnesses;
7. the person hearing the matter may ask any question of either party as the evidence is given;
8. the line manger should be invited to sum up his case/the allegations against the employee; and
9. the employee should have the final say to sum up his position/defence.

The penalty

Unless the case is straightforward the hearing should be adjourned before a decision is made which normally should be provided in writing to the employee.

The individual deciding the penalty should take into account:

1. the standard of proof is the balance of probabilities;
2. the seriousness of the offence and whether the disciplinary procedure or any other procedure or the contract indicates what the likely penalty will be for the particular offence;
3. the penalty imposed in similar cases – although each case must be considered on its own merit and its own facts, similar breaches should be dealt with consistently;
4. any mitigating circumstances;
5. the employee’s disciplinary record including any current warnings, employment history, position and length of service; and
6. whether the proposed penalty is reasonable in all the circumstances.

The employer should not consider any further allegations which were not put to the employee at the disciplinary and must not dismiss for a reason that has not been specifically put to the employee.

A letter should be sent to the employee setting out:

• the decision, the reason for it and the penalty;
• how long any warning will last and the consequences of further misconduct;
• where improvement is required, what is expected, the timescale for review and how improvement will be assessed; and
• the employee’s right of appeal.

Possible penalties

These are:

1. oral or written warnings; and
2. conduct short of dismissal such as demotion or disciplinary transfer.

It is vital that disciplinary procedures are sufficiently flexibly drafted to allow the employer to trigger the procedure at the appropriate stage. Although in cases of capability the presumption will be that the staged procedure will be followed, in conduct cases it may be appropriate to trigger the procedure at the first written warning or final written warning stage in appropriate circumstances.

Dismissal should generally not be considered for a first offence unless the offence clearly constitutes gross misconduct.

Penalties short of dismissal

Penalties such as demotion or loss of seniority must be provided for in the contract otherwise such a penalty may amount to a fundamental breach of contract allowing the employee to resign and claim constructive unfair dismissal.

Warnings

Although the procedure should be flexible the disproportionate use of, for example, a final written warning for a minor offence could constitute a fundamental breach of contract.

Appeal

The appeal should, if possible, be heard by a senior manager who has not previously been involved in the disciplinary process. It is safest to allow for a full re-hearing rather than limiting the employee’s grounds of appeal. If there have been procedural errors at the initial stage, they may, on occasion, be remedied at the appeal stage.

Dismissal

Dismissal may be with or without notice. Generally dismissal for gross misconduct is without notice or pay in lieu of notice.

If dismissal is on notice but there is no provision in the contract for making a payment in lieu technically the employer will be in breach of contract which means he may not be able to rely on other provisions of the employment contract e.g. post termination restrictive covenants.

If the employer does not wish the employee to come into work during the notice period garden leave may be imposed if the employment contract provides for this.

Appeals against dismissal

If dismissal is without notice the termination date is the date on which the termination takes effect i.e. the date of the disciplinary if the decision is given verbally or the date on which the employee reads the decision if it is given in writing. If there is a delay the termination date will be when the employee has knowledge of the termination unless he has deliberately avoided reading a letter.

If the employee is reinstated on appeal there will be no dismissal and salary will be back dated to the date of the dismissal.

Duration of warnings

It is common for warnings for minor offences to be disregarded after six months and final warnings after 12 months. While warnings should not be indefinite it can, in practice, be difficult to progress a disciplinary procedure if warnings are limited in duration. The duration of a warning should be considered at the time it is imposed and it may be justifiable in some circumstances for warnings to remain live indefinitely. Alternatively the employer may specify that a warning will be disregarded for purposes of progressing the staged procedure but will be taken into account if dismissal is contemplated.

While spent warnings will be disregarded for disciplinary purposes a record of them may remain on the employee’s personnel file.

Records

Records of disciplinary action should be confidential and retained in accordance with data protection principles. The records should give:

• the nature of any offence;
• the employee’s defence or mitigation;
• the action taken and the reasons for it;
• whether an appeal was lodged and, if so, the outcome; and
• any subsequent developments.

Copies of minutes of meetings should generally be provided to the employee.

Probationary period

It is advisable to exclude the disciplinary procedure during the probationary period as this may take weeks or even months to complete and defeats the point of a probationary period which is to provide a relatively easy means of withdrawal on either side.

Dealing with absence

Absence on medical grounds should be treated as a capability issue. When considering how to handle such cases the employer should consider:-

• How soon the employee’s health and attendance will improve;
• Whether there is suitable alternative work available;
• The effect his absence has on the organisation;
• Whether there have been any other similar cases and, if so, how they were handled;
• Whether the illness constitutes a disability in which case reasonable adjustments will need to be considered.

All unexpected absences should be investigated and if there are no acceptable reasons the matter should be treated as a conduct issue.

In cases of absence on medical grounds the employer’s actions must be based on medical evidence and he must keep in touch with the employee. It will be appropriate to issue a number of ‘cautions’ or warnings that failure to return within a timescale acceptable to the employer will result in termination being considered.

Trade union officials

If trade union officials are the subject of disciplinary proceedings the circumstances of the case should be discussed with a senior trade union representative or full-time official before disciplinary action is taken. Otherwise the action may be seen as an attack on the union’s functions which may lead to a serious dispute.

Criminal charges or convictions outside employment

The disciplinary procedure should only be invoked if the charge or offence relates directly or indirectly to the employee’s job. An employee charged with a criminal offence is of course not necessarily guilty and should not be dismissed solely because a charge is pending as he may be acquitted. On the other hand acquittal of a criminal charge does not necessarily render a dismissal unfair.

The employer should not postpone taking disciplinary action because the outcome of a prosecution is not known.

Generally the more senior an employee the stronger the argument that any criminal conviction or disreputable conduct outside work is likely to impact on the reputation of the employer.

1. The reason for the dismissal must be fair (take advice if in doubt).
2. Follow your disciplinary procedure and the ACAS Code.
3. In capability cases a staged procedure should always be followed.
4. In misconduct cases a staged procedure should be followed except where there is a finding of gross misconduct.
5. It will generally be safest to take legal advice on whether conduct constitutes gross misconduct unless absolutely clear even if the disciplinary procedure gives the conduct complained of as an example of gross misconduct.
6. Separate investigatory and disciplinary stages.
7. Provide the right to be accompanied.
8. A hearing (with the right to be accompanied) must precede any disciplinary action.
9. A right of appeal must be provided at every stage of the disciplinary procedure.
10. The procedure should not be delayed unreasonably.
11. Written reasons for dismissal must be provided.

1 See Gillian Dowling’s article ‘New Discipline and Grievance Procedures’ in The People Bulletin, 16 July 2009: http://news.thepeoplebulletin.co.uk/wordpress/employment-law/new-discipline-grievance-procedures/

2 The judgment can be viewed at http://www.bailii.org/ew/cases/EWCA/Civ/2000/228.html and IRLR reports are available on subscription from www.lexisnexis.co.uk