A Guide to Disciplinary Action For Small Businesses

If you want to take action against a misbehaving employee, you could be walking on a legal tightrope. Make sure you know what to do

A Guide to Disciplinary Action For Small Businesses

Disciplinarily situations can arise in employment for variety of reasons which vary from business to business but usually relate to misconduct and/or poor performance. This can include:

  • Behaviour/attitude at work
  • Poor timekeeping
  • Unexplained or unauthorised absence
  • Health and safety breaches
  • Inappropriate use of telephones, email and internet

If there is an issue it’s important not to ignore it or do anything rash in the heat of the moment. If you are unsure about the best course of action then speak to a solicitor as if the disciplinary procedure is not handled correctly it may result in an employment tribunal claim.

Informal action

Informal action is often a very useful tool and may save time and resources depending on the severity of the conduct. The employee however should be aware that formal action may be commenced if the problem is not resolved.

It may be sufficient to just hold a confidential private meeting with the employee to highlight the problem, enquire why the problem has arisen and agree what action is needed.

Although this is an informal meeting you should always keep a record of the conversation in case it needs to be referred to later. You should also follow up with the employee in writing setting out what has been agreed/decided and say that disciplinary action will follow if there is no improvement. Any warnings needed should be verbal and should not be confirmed in writing nor placed in the employee’s disciplinary file, nor taken into account in future proceedings.

Formal action

In more serious cases, formal disciplinary action will be necessary and this may lead to a dismissal. In these circumstances the ACAS Code of Practice on disciplinary and grievance procedures should be followed. Although it is not law, employment tribunals take it into account when deciding if an employer has acted reasonably and failure to follow it can result in an adjustment to the amount of compensation payable.

In order to fairly dismiss an employee for misconduct, an employer must be able to show that at the time of the dismissal it had reasonable grounds for believing that the employee was guilty of misconduct and it had carried out as much investigation as was reasonable in the circumstances at the time.

It is important for an employer to deal with any issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions. By following a clear procedure, it is easier for an employer to show that they have acted consistently.

If an employee with two years’ service is dismissed they have the right to bring an unfair dismissal claim if you haven’t followed the correct disciplinary procedure. You therefore must be able to show that the dismissal was fair and the paper trail will support your case.

The procedure

Investigation

Employers are required to carry out fair, reasonable and impartial investigations into allegations of misconduct. This is critical in order to establish the facts of the case.

  • The investigation should be carried out promptly without unnecessary delay.
  • The employer should interview any witnesses (including the employee) as necessary.
  • There is no statutory right for an employee to be accompanied at an investigation meeting.
  • The employer should record the evidence that has been obtained through investigation as this shall be needed at a later date.
  • If a period of suspension is needed then it should be made clear to the employee that the suspension is not a disciplinary sanction.

Following the investigation, the employer should decide whether there is a case to answer.

If there is not the employee should be informed. An employer may then decide whether to treat the matter informally or cease any further action.

If, however, there is a case to answer the employer should invite the employee by letter to a disciplinary hearing; specify the date, time and venue and confirm that they have the right to be accompanied by a colleague or trade union representative.

The employee should, at this stage, be provided with a copy of the case against them and the investigation notes. The allegations against the employee need to be detailed enough to enable the employee to fully respond. They should also be allowed sufficient time in order to prepare for the meeting. If possible, the person holding the disciplinary should be different to the person that held the investigation.

Meeting

The purpose of the meeting is to allow the employee the opportunity to put their case in response before any decisions are made.

The meeting should be held by a line manager or someone more senior to the employee in question. It is recommended to have an impartial colleague take notes of the meeting so there is no dispute regarding their recording.

The employer should stick to the original allegations set out in the employee’s invitation letter. Any other allegations should not be brought up as the employee would not have had time to prepare their response and this may weaken any reason behind the disciplinary outcome.

At the end of the meeting the employer should conclude by confirming that they will consider the evidence and confirm the outcome in writing to the employee.

Outcome

The employer must then decide on the appropriate action. It is at this stage an employer may want to take legal advice in case there are other underlying issues which may complicate matters.

The employer should inform the employee in writing of the sanction (if any) imposed on them and the reasons for that decision. If a sanction (such as a written warning) is imposed then the employee should be notified of how long the sanction will remain “live” on the file.

If the sanction is dismissal then this should only be imposed by someone with authority to make that decision and the employee should be provided with a chance to appeal against the disciplinary/dismissal.

Appeal

If an employee decides to exercise their right to appeal, the employer should acknowledge their appeal and inform the employee of the date, time and venue of the appeal meeting.  They should also be reminded of their right to be accompanied at the appeal hearing (i.e. by a colleague or trade union representative).

If the grounds of appeal are not clear then the employer should ask for clarification prior to any meeting taking place.

The person holding the appeal meeting should be different to the person that held the disciplinary however in small businesses this may not always be possible. Following the appeal the employer should again set out in writing as to whether the employee’s appeal is upheld or not.

Following a dismissal

If the employee has been dismissed and you receive a reference request then the reference should be kept as factual and standard as possible to avoid any claims of negligent misstatement.

An employee may therefore only wish to include the start and end dates, the employee’s job role/job title and the reason for leaving (i.e. poor performance, gross misconduct, resignation pending disciplinary proceedings for misconduct/poor performance)

An employee may raise a grievance during disciplinary proceedings. If this happens, it may be appropriate to suspend the disciplinary proceedings whilst the grievance is dealt with. If however the disciplinary matter and the grievance are related, it may be more appropriate to deal with them concurrently.

Special cases

Where disciplinary action is being considered against an employee who is a trade union representative the normal disciplinary procedure should be followed. Depending on the circumstances it is advisable to discuss the matter at an early stage with an official employed by the union, after obtaining the employee’s agreement.

If an employee is charged with, or convicted of a criminal offence it is not normally in itself a reason for disciplinary action. Consideration should be given as to what effect the charge or conviction has on the employee’s suitability to do the job and their relationship with their employer, work colleagues and customers.


Minal Backhouse is the managing director Backhouse Solicitors, and is a solicitor specialising in employment law.

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