It’s so unfair

Since 1 October 2004, massive changes to unfair dismissal law have come into force. One of the most serious for employers is that the law now sets down a minimum standard of procedure to be followed every time you discipline or dismiss an employee, or where an employee raises a grievance. If an Employment Tribunal finds against you where the claim arises out of a dismissal/disciplinary or grievance, compensation to the employee may be increased by up to 50% if the employer has failed to comply.

The law now requires employers to make their employees aware of the minimum disciplinary and dismissal procedures to be followed by the business by referring them to its dismissal/disciplinary policy in the contract of employment or written statement (known as a section 1 statement). Employers must make sure their staff are aware of these procedures, either in their contracts of employment or in a staff handbook.

The new minimum statutory procedures apply if you are contemplating:

• Dismissal for any reason (disciplinary, capability, non-renewal of a fixed term contract, redundancy, early retirement).
• Other disciplinary action (unpaid suspension, transfer, demotion, reduced pay, but excluding warnings).

In brief, the statutory procedure requires you to do the following:

• Write to the employee setting out the grounds of complaint (misconduct, poor performance, poor attendance etc) or the other reason for possible dismissal.
• Arrange a meeting with the employee to discuss the company’s complaint or other reason for considering dismissal.
• If the employee is dismissed or receives any other form of disciplinary action (not a warning) advise them that they can appeal the outcome to a more senior manager at a meeting. The decision of the manager hearing the appeal will be final.
• Advise the employee of the outcome.

If the employee is given a disciplinary warning, advise them that they can appeal the outcome by raising a written complaint under the company’s grievance procedure. There is also a modified procedure that can apply in cases of dismissal without notice for gross misconduct.

Grievances

Government guidance recognises that many minor complaints by employees can be resolved informally and employers and employees are encouraged to resolve issues this way if appropriate. However, if employees wish to raise a formal grievance (for example after receiving a warning) they are now required to do so by setting out their grievance in writing.

You must comply with the new regulations on employee grievances. Compensation costs could rise 50% if a tribunal finds the new rules were not followed.

In summary, the new grievance procedures require these steps to be followed:

• The employee must set out the grievance in writing and provide a copy to the employer. The employer must then invite the employee to attend a meeting to discuss the grievance.
• After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision.
• If the employee does wish to appeal, he must inform his employer. The employer must then invite him to attend a further meeting with a more senior manager (if possible). After the appeal meeting, the employer must inform the employee of his decision and that this decision is final.

If a grievance is raised following a disciplinary warning, the employer should arrange a meeting with a manager to hear grievance about the warning. They should also inform the employee of the outcome in writing, and give them right to appeal to the next stage of the grievance process. After this the appeal is heard, and the outcome is final.

The new statutory procedures appear to give an employee two opportunities to complain about a warning, but only one opportunity of appeal in respect of dismissal. In the future, case law is likely to provide further guidance on whether this is the correct application or whether one appeal will suffice.

You should make it clear that complaints against warnings will be limited to a two stage process which will involve a more senior manager hearing the complaint and one appeal only to the next level of management. If you have any further stages of complaint under your grievance procedure, consider specifying that these will not be followed in respect of disciplinary warnings, but will remain relevant to other types of grievances.

Ceri Durham is a solicitor with the Clarks employment team. E-mail: cdurham@clarkslegal.com or visit www.clarkslegal.com