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What is "disciplinary action"? Are the SDPs a step too far?
So when are you “disciplining” an employee under the new regime? “Relevant disciplinary action” is defined at regulation 2(1) of the Employment Act 2002 (Dispute Resolution) Regulations 2004 (“the Regulations”) as “action, short of dismissal, which the employer asserts to be based wholly or mainly on the employee’s conduct or capability, other than suspension on full pay or the issuing of warnings (whether oral or written)”. So that’s clear as mud then…
There can be no argument as to whether or not an act was based “wholly or mainly on the employee’s conduct or capability”. All that is required is that an employer asserts that the action was based on this. Once that has happened, the act amounts to relevant disciplinary action within the meaning of Regulation 2(1). There is no qualification as to whether such assertion needs to be reasonable, fair or in any way objectively accurate.
However, it is highly doubtful whether Parliament intended that an employer should be able to circumvent the statutory disciplinary and dismissal procedures (“the SDPs”) and avoid any possible uplift of between 10 per cent and 50 per cent in any compensation awarded simply by arguing that it does not apply because the reason for the process was not the employee’s conduct or capability - or by simply refusing to give a reason.
Allocation of work
The definition of “disciplinary action” is so wide that if a manager decides to give a big piece of work to one employee (Polly) rather than another (Manuel) and does so because he believes Polly is more capable than Manuel of doing that particular type of work, this currently appears to fit the definition of “relevant disciplinary action”. On a strict reading of the legislation, the employer would have to give proper notice, then hold a meeting with Manuel to discuss the issue (with Manuel’s companion present), before it could give the work to Polly. However, such action is unrelated to any matter of discipline.
The saving grace is that at face value a breach of the SDP alone does not give rise to a claim worth pursuing. In order to be awarded compensation in relation to an employer’s failure to follow the SDP, a claimant must be able to establish some form of financial loss.
It is even arguable that the definition of “relevant disciplinary action” extends to the notification of bonus awards. Bonuses are usually calculated, at least in part, with reference to an employee’s individual conduct and performance, however, in practice, it is unlikely that the Regulations were intended to apply to circumstances where a lower bonus is awarded on the basis of an employee’s performance. This is an area which remains open for debate (for a creative employee!).
Performance monitoring, by definition, arises if there are problems with conduct or capability or both. Complying with the statutory disciplinary procedure as part of the performance management review process would be advisable, anyway. Not only does it mean that the employer is complying with the letter of the law, but it could also lead either to a more positive employee attitude towards the review, which would make the whole procedure more worthwhile, or perhaps a speedy resolution of the root cause of the problems. The employee’s companion could also prove to be a helpful intermediary.
The legislation was intended to make cavalier employers create a forum to hear disputes and listen to their employees before taking irremediable action – which (it was hoped) would staunch the flow of claims to the employment tribunal. However, the issues above illustrate the confusion caused by this poorly drafted legislation. Employers can only hope that the tribunals interpret “disciplinary action” in its narrow sense and decide that there must be some element of an employer actually disciplining an employee, in order for an action to count as “relevant disciplinary action”.