Employment: Repeal of statutory dismissal and grievance procedures

January 3, 2009

It is almost universally agreed that the statutory dismissal and grievance procedures introduced in 2004 have failed in their stated objective of reducing the amount of claims going to employment tribunals.

With effect from 6 April they will be repealed, although the old rules will continue to apply in relation to dismissal and grievance procedures commenced prior to 6 April. (Where a grievance is not raised until after 6 April but concerns matters occurring wholly before that date, the old procedures will apply; the position is more complex in relation to grievances concerning matters that commenced prior to 6 April and carried on afterwards and expert advice should be sought where relevant).

Follow the ACAS Code

The repealed procedures will be replaced by an obligation to conduct disciplinary and grievance procedures in accordance with principles laid out in a new ACAS Code (Code).  The Code is intended to provide the standard of reasonable behaviour in most cases.

Unlike the former regime a failure to follow the principles of the Code will not result in an automatically unfair dismissal for those employees with the requisite one years deemed continuous service.  However, an unreasonable failure to comply with the Code may result in an uplift of up to 25% in any compensation subsequently awarded by an employment tribunal (or a reduction of up to 25% if it is the employee who has unreasonably failed to comply with the principles established).  These adjustments to compensation apply both to claims for unfair dismissal and breach of contract claims as relevant.

The Code itself is a concise 10 pages and sets out principles most employers would regard as common sense best practice.  Although the Code encourages employers to consider all forms of alternative dispute resolution, including the use of internal and external mediation, the core principles for the management of formal disciplinary and grievance processes are largely unchanged and few employers are likely to have to amend their current policies to accommodate the new regime.

Practical points to note

The Code does not apply to redundancy dismissals or non-renewal of fixed term contracts, although employers will still have to have regard to their general statutory obligation or reasonableness in these scenarios:

The Code, which will remain marked draft until finally approved by Parliament but is not expected to change, can be accessed here.

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