Statutory Disciplinary and Grievance Procedures: The Real Issues

It is common knowledge (hopefully) that all employers regardless of size and structure are required to have in place three step disciplinary and grievance (‘D&G’) procedures compliant with the statutory requirements which came into force on 1 October 2004.

Susanna Heley, Solicitor in Sykes Anderson LLP’s Litigation and Dispute Resolution Department discusses the practical issues surrounding the statutory three step disciplinary and grievance procedures.

There are certain modifications allowed for businesses with very few employees but the basic format allows for a system involving initial notification, investigation and the employee’s right to tell his side of the story. The employee should also have a right of appeal against any sanction imposed.

Now that the statutory requirements have been around for a while, the key concerns affecting employers are becoming clear. Various factors relating to D&G procedures have come before the Employment Tribunal (‘ET’), the Employment Appeal Tribunal (‘EAT’) and the Court of Appeal (‘CA’).

Identifying Grievances

One of the key failings which has been highlighted by a succession of cases is the failure of employers to recognise what constitutes a grievance. Another complicating factor in this regard is that, where an employee raises a formal grievance, the time limit for him to make a claim to the Employment Tribunal may be extended up to 6 months. Naturally, employers have argued that claims presented after the usual three month time limit are time-barred.

From an employees’ perspective, the arguments have centred on whether the grievance raised was sufficiently precise to extend the time limit for that claim. It is worth noting that the grievance raised must be clear enough to indicate to the employer that the facts complained of could give raise to a claim in the Employment Tribunal and it may not have to be in writing. Any claim made must be linked to the grievance.

The best advice is that if an employee raises a complaint of any kind, particularly in writing, the employer should seek to address that complaint. The best way to deal with a complaint will depend on the circumstances.

An informal approach from HR or an immediate manager may be the most appropriate way forward in some cases and in others it may be necessary to instigate a full investigation. If in doubt, employers should seek legal advice and initiate the grievance procedure. Employers should not forget their general duties to their employees and treat complaints both sensitively and with appropriate confidentiality.

Internal Procedures Vs Statutory Criteria

The requirements laid down by statute are not absolutely definitive and employers have a certain amount of discretion to add to the minimum criteria set out. This has caused a certain amount of friction and, in a recent case, the Employment Appeal Tribunal upheld a finding of unfair dismissal by the Employment Tribunal on the basis that the employer had failed to comply with the minimum statutory requirements by requiring its employee to submit his grounds for appeal (stage 3 of the D&G procedure) in writing.

It is essential that employers understand the minimum requirements and that any changes within their discretion serve only to increase employees’ rights under contractual (as opposed to statutory) D&G procedures.

Applying D&G Procedures: What Happens If…?

Although all employers are required to have D&G procedures in place, it is important to ask the question ‘what happens if you do not comply with them?’ A recent decision of the EAT has confirmed that a failure to comply with D&G procedures does not give rise to a claim in itself. There must be some other cause of action present.

The usual complaint is unfair dismissal and it follows therefore that a failure to follow D&G procedures resulting in a dismissal before an employee has twelve months’ continuous service will not be actionable in the Employment Tribunal UNLESS the employee would have accrued twelve months service if not for the failure to follow the procedures or the claim is framed in discrimination.

It is unclear what would happen if a claim was based on contractual rather than statutory rights. The employer has a statutory duty to follow the procedures and this may give rise to a claim in the county courts although, in these circumstances, the employee would not be entitled to a basic award as in the Employment Tribunal, but would have to prove actual loss or damage in order to recover any compensation.

If the employee has accrued twelve months’ continuous employment or will have done so by the time the D&G procedures would be complete or the complaint is framed in discrimination, it is very risky not to follow the procedures. Failure to follow the procedures can make an otherwise fair dismissal automatically unfair leaving the employer liable to pay compensation.

How Much Will It Cost?

Awards in the Employment Tribunal are capped (except in discrimination cases). There will always be a basic award, calculated on the basis of the statutory formula: Weekly Pay (capped at £290 per week for 06/07 rising to £310 per week for 07/08) x Years of Service x Statutory Multiplier (dependant on age).

In addition, there will usually be a compensatory award (subject to the statutory cap) which should cover the employee’s provable loss (including loss of earnings) and damages for distress for example. Employment Tribunal’s have discretion to reduce the compensatory award in cases where there is fault attributable to the employee.

The county court (and the ET in discrimination cases) may award an amount to cover the employee’s provable loss and damages for psychological harm.

The key factor which most employers will need to consider in either case is costs. Costs in the Employment Tribunal are usually not awarded although the ET is showing signs of changing this position. Costs are usually awarded to the winning party in the county court.


It is becoming increasingly necessary even for very small employers to ensure that they understand the legal obligations imposed on them by statute. Employers should always seek legal advice before taking any steps which could result in an employee being disciplined. There is no doubt that there are problems with the current regime and it would appear that employers will have to pay the price.

Please note that this area of the law is a complex subject and you should not take or refrain from taking any step without full legal advice on your particular circumstances. The content of this article is of a general nature and no liability is accepted in connection with it or if any reliance is placed on it.

Bytestart Limited

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