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Statutory Disciplinary Procedures - Are you ready?
Most employers have heard about the new statutory dismissal and grievance procedures, but how may can honestly say they know what is involved and what the impact is for their organisation? The procedures come into force on 1 October 2004 and as no employer, whether large or small, is exempt from complying with the required standards, they need to use the coming months to get to grips with the new statutory minimum requirements.
Many employers deal with disciplinary and dismissal matters on a daily basis. They may also have tried and tested approaches which arise from custom and practice rather than any formal procedure. However, the new requirements will provide for statutory minimum procedures and it is likely that all employers will have to review their practices and ensure that their staff handbook, policies and procedures are in line with the new legislation.
This summary focuses on the content of the dismissal and disciplinary procedures but employers should also be aware that a statutory grievance procedure will come into force in October this year.
The new statutory disciplinary procedures will apply to almost all disciplinary and dismissal scenarios and will set a minimum standard whenever an employer contemplates dismissing or taking disciplinary action against an employee. The procedure will be followed not only in conduct and performance situations but will also be relevant in other circumstances, such as redundancy, retirement or the expiry of a fixed-term contract. The statutory requirements provide for a standard procedure and a modified procedure, depending on the circumstances.
The Standard Procedure
The standard procedure consists of three steps that must be taken prior to any dismissal. This standard procedure will apply in most instances:
Step 1 - Writing:
Employers must provide the employee with written information about the circumstances which have led them to consider dismissing or taking disciplinary action against the employee. It should be clearly explained to the employee what the nature of the problem is. A copy of this information should be provided to the employee, together with an invitation to attend a meeting.
Step 2 - Meeting:
A meeting should be held between the employer and employee. It is expected that the employee and employer should take reasonable steps to ensure they are able to attend. The meeting will enable the two parties to discuss the problem and following the meeting, the employer should inform the employee of its decision and his/her right to appeal the decision.
Step 3 - Appeal: A further meeting should be held in which the appeal can be discussed. It is recommended, and has always been good practice, that an appeal meeting is held by a more senior manager then the individual who took the original meeting and made the original decision. The decision from the appeal must be communicated to the employee.
The Modified Procedure
The modified procedure is appropriate for circumstances where, for example, summary dismissal for gross misconduct has already taken place. It is a two, rather than three, step process which broadly comprises step 1 and step 3 of the Standard Procedure. The employer should set out in writing the alleged misconduct which led to the dismissal and provide the reasons why the employee was considered guilty of the misconduct. It should also inform the employee of his/her right to appeal against the dismissal. The appeal meeting forms the second step of the modified procedure.
What happens if employers do not comply?
Any failure to comply with the statutory procedures can constitute automatic unfair dismissal (if the employee has the qualifying service of one year). The Employment Tribunal also has the power to increase a compensatory award made to an employee where the employer has failed to follow the statutory procedure by between 10% to 50%.
The impact for employers is therefore significant and should not be underestimated. Whilst many employers may have procedures which go beyond the statutory minimum, any failure to follow the minimum requirements may result in incurring legal fees and losing management time to defend an employee’s claim.
Once the statutory procedures are in force, it is likely that employees will be watching employers’ responses to disciplinary and dismissal matters carefully, to maximise the compensation they can either negotiate or achieve at Tribunal. It is therefore vital that employers ensure that their procedures are up to date, they incorporate the new minimum statutory procedures and are followed comprehensively – this is the only way to limit exposure to potential claims and increased costs.