Are you ready for new disciplinary/dismissal procedures being introduced from 1 October 2004? Osborne Clarke’s employment law guru Victoria Parry looks at the new ‘2 step’ and ‘3 step’ procedures at
Radical shake up for dismissal procedure
Are you ready for October 1st? This is D-day for the new procedures that employers have to adopt when proposing to discipline employees. The Employment Act 2002 introduced new statutory procedures for workplace dispute resolution. This article looks at procedures that should be followed in the event of a dismissal.
The Government hopes that the new legislation will encourage the parties to resolve disputes within the workplace rather than at an employment tribunal. Recent research has suggested that the number of disputes that have been referred to the employment tribunals has increased by 50% over the last 5 years. This is expensive for the taxpayer and costly and time consuming for employers.
ACAS has welcomed the new laws but the TUC is less impressed stating that they complicate matters and that it is more likely, not less likely that matters will end up at the employment tribunal.
The essence of the new disciplinary procedure
The aim of the legislation is to ensure that employers act fairly by providing employees with some basic rights; setting out the allegations, having a meeting to discuss it and then having a right of appeal.
There are two dismissal and disciplinary procedures under the new legislation. The first is the standard (three step) procedure and by far the majority of dismissals will be covered by the standard (three step procedure).
What is the three-step procedure?
STEP ONE The employer sets down in writing the nature of the employee's conduct, capability or other circumstances that may result in dismissal or disciplinary action, and sends a copy of this statement to the employee. The employer must inform the employee of the basis for his/her complaint. The employer should invite the employee to a meeting to discuss the issues
STEP TW0 A meeting takes place. This must take place prior to any action being taken, except if suspension was part of the discipline (which is very rare, in most cases suspension takes place whilst the investigation is going on, prior to any disciplinary proceedings).
By the time of this meeting the employee should have been informed of the basis of the complaint and had a reasonable opportunity to consider his response. The employee should take all reasonable steps to attend. After the meeting, the employer must inform the employee of any decision, and offer the employee the right of appeal.
STEP THREE If the employee wishes to appeal, s/he must inform the employer. The employer should then invite the employee to attend a further meeting to determine the appeal and the employee should take all reasonable steps to attend. Any disciplinary action or dismissal may occur prior to this stage. The final decision must be communicated to the employee.
What is the two-step procedure?
This is the Modified (Two Step) Dismissal Procedure. This procedure only applies in place of the three-step standard procedure in a very limited number of situations.
It is only to be used by an employer who dismissed by reason of conduct without notice (or by payment in lieu of notice) immediately after it became aware of the conduct, and where it was reasonable to dismiss before enquiring into the circumstances in which the conduct took place i.e. gross misconduct where is a real "smoking gun". Effectively it only offers a meeting at the appeal stage.
STEP ONE The employer sets down in writing the nature of the alleged misconduct that has led to the dismissal, the evidence for this decision, and the right to appeal against the decision, and sends a copy of this to the employee.
STEP TWO If the employee wishes to appeal, he/she must inform the employer. The employer should invite the employee to attend a further meeting to discuss the appeal. The final decision must be communicated to the employee.
What is the result of following the procedure?
Once all the stages of either statutory procedure have been applied up to the appeal procedure, the parties will be deemed to have complied with that statutory procedure. This in itself does not make the dismissal fair. It will simply be taken into consideration along with all the circumstances of the case at the tribunal hearing.
Failure to comply and unfair dismissal claims
If the parties fail to comply with the statutory procedure then any failure will be attributed to the party who is at fault. If the employer is at fault, this will amount to unfair dismissal and increase the amount of compensation by between 10-50%. Where the employee is at fault, this is likely to reduce any compensation payable by between 10-50%.
Initially the Government intended to make it so that the procedures were automatically incorporated into the employee's contract of employment. This would have meant that failure by the employer to comply would have been breach of contract as well as unfair dismissal. However, the decision has now been taken not to do this for the moment.
Extension of time limit for applying to the Employment Tribunal
In order to allow the parties enough time to follow the new procedure, the tribunal will extend the 3 month time limit (for bringing an unfair dismissal claim) by a further 3 months where the employee had reasonable grounds for believing that a dismissal or disciplinary procedure, was being followed in respect of matters that included the substance of the tribunal complaint.
We are running a seminar on this topic on Wednesday 13th October 2004. For more information on this please contact your usual Osborne Clarke contact.
Employment, Pensions and Incentives Department