Discipline and Terminations

Disciplinary and performance management procedures play a crucial part in the resolution of workplace disputes. The benefits to employers in following such procedures cannot be underestimated, as fair and transparent procedures lead to better employee relations.

This guide provides some information about the issues involved in discipline, performance management and termination:

If you would like advice in respect of these or any other issues, please contact:

Throughout this guide we have referred to legislation by its full title, but to avoid constant references to ‘him/her’ and ‘he/she’, or worse still ‘s/he’, which we think is irritating to read, we have used ‘he’ to refer to both male and female employees (sorry ladies!)

 

DISCIPLINARY INVESTIGATIONS

Overview

Employees must be given the opportunity to put their case and to answer allegations in respect of misconduct or poor performance. The Employment Tribunal will take into account the amount of investigation conducted and the way in which it was conducted when determining whether the investigation was fair.  An unfair investigation will prejudice subsequent disciplinary proceedings and may make an otherwise fair dismissal unfair.

Any investigation should be reasonable, appropriate and proportionate to the circumstances.   Special consideration should be given to the gravity of the allegations and the potential effect those allegations may have on the employee.

The Investigation Process

Employers should draw a clear distinction between the investigation process and a disciplinary procedure ideally by ensuring they are conducted by different people.  Under the ACAS Code of Practice on Disciplinary and Grievance Procedures, employers should always conduct a disciplinary meeting. Failure to do so, even where there is seemingly incontrovertible evidence against an employee, will most likely result in a finding of unfair dismissal.

Employers must be able to:

  1. Establish they believed the employee to be guilty of misconduct;
  2. Show they had reasonable grounds for believing the employee was guilty of that misconduct; and
  3. Show that at the time they held that belief, they had carried out as much investigation as was reasonable.

Who Should Investigate?

The person conducting the investigation should, so far as it is possible, remain impartial and employers should be mindful of the ongoing working relationships within the organisation.

Questions employers should ask before deciding who should conduct a disciplinary investigation include:

  • Who are the relevant witnesses?
  • If the matter proceeds to the disciplinary stage, who will conduct those proceedings?
  • If the individual appeals a decision taken at disciplinary stage, who will conduct that?
  • Does the proposed investigator have the necessary level of authority to gather evidence?
  • Do they have the appropriate experience?
  • Have they had appropriate training, and do they know what is required of them?
  • Does the person proposed work closely with any of the individuals in question, and will the working relationship between them, or the conduct of the investigation, be compromised as a result?

Gathering Evidence

In gathering evidence, employers must bear in mind the purpose of the investigation, and the rights of the employee being investigated.

Throughout the investigation process employers should continually ask whether the evidence gathering is necessary for the purposes of the investigation and whether the way it is being obtained is reasonable and proportionate.  Disproportionate investigations may result in an irretrievable breakdown in the employee/employer relationship leading to allegations of constructive dismissal.

Can Witnesses Remain Anonymous?

The Employment Tribunal has held it is permissible for witnesses to remain anonymous. Anonymity, however, cannot be guaranteed absolutely.  There are circumstances in which disclosure will be necessary or required by law.

Suspension During Investigation

Suspension during an investigation should only be considered in the most serious circumstances.  It can make the ongoing working relationship untenable as assumptions of guilt may be drawn, resulting in claims of constructive dismissal.  Instances where suspension may be appropriate include where there is a threat to the business or to other employees, or where it is not possible to conduct a proper investigation into the allegations whilst the employee in question remains at work.

Any period of suspension should be kept as short as possible.  Suspension should be with pay and the decision to suspend should be continuously reviewed.  Suspension without pay is nearly always unlawful.

Employee Rights

1)    Contractual Rights – Any rights afforded to an employee by virtue of their contract of employment must not be breached when conducting a disciplinary investigation. A breach of contract and may result in claims of constructive dismissal.

2)    Right to be Accompanied – In addition to rights under the employment contract or Trade Union / collective agreements, the Employment Rights Act 1996 provides that an employee has the right to be accompanied to disciplinary hearing by a Companion (see below).  This right only applies to a meeting at which a disciplinary sanction is to be imposed or confirmed. There is no right to be accompanied to an investigatory meeting.  Legal representation at disciplinary hearings is not normally permitted.

Right to be Accompanied to the Meeting

Under the Employment Relations Act 1999, employees have a legal right to bring a Companion to a grievance meeting. A Companion can either be a Trade Union Representative or a workplace colleague.

The request to be accompanied should be reasonable.  As such, it may not be reasonable to bring a Companion who has a conflict of interest (i.e. a witness) or someone who may be prejudicial to the meeting (i.e. a co-complainant).

Employees do not have the right to bring a friend or a legal representative (save in very exceptional circumstances).  If an employee suffers from a disability it may be appropriate for him to be accompanied by another person by way of a ‘reasonable adjustment’ to the usual procedure.

 

PERFORMANCE MANAGEMENT

Overview

Whilst employees have a duty to perform their duties with reasonable skill and care, inadequate performance does not justify instant or summary dismissal unless an employee is guilty of gross negligence. However, serious or ongoing poor performance may result in disciplinary proceedings and ultimately, termination of employment.

A performance review process or performance improvement plan should be separate and distinct from a disciplinary procedure. A performance review procedure should be seen by employees as a positive system to help them develop and work to the best of their potential.

Poor performance may be a fair reason to terminate employment, but the dismissal will only be fair if a fair and proper procedure is followed. Using a formal performance review process, coupled with disciplinary sanctions as and when appropriate will assist achieving a fair dismissal.  Failure to follow fair and proper procedures will make any dismissal unfair.

Performance Review Programmes

An individual performance review programme will be separate and distinct from an employer’s annual appraisal system. Performance reviews and performance improvement plans are designed to be used where employees are performing below an acceptable standard, with a view to helping them improve, or ultimately terminating their role if they are unable to do so.

Performance Reviews and Discrimination

In addition to assessing employee performance, performance reviews should be used to assess employees’ developmental needs and training requirements. Employees who believe they have been refused access to training or denied promotion on discriminatory grounds have the right to pursue claims in relation to such treatment through the Employment Tribunal.

Employers should ensure that performance review procedures are regularly reviewed and that assessment criteria do not discriminate against employees, either directly or indirectly.

Managing Poor Performance

Appropriate use of appraisals and performance improvement plans (PIPs) should minimise the risk of claims being brought for unfair dismissal if poor performance leads to dismissal.

The following factors should be considered when managing poor performance:

  • Investigation – poor performance should be reasonably investigated before raising the matter with the employee. The level of investigation required will vary from case to case, and consideration should be given to any mitigating factors.
  • Setting the required standard – employees should be given the opportunity to explain their performance.  Goals should be set for the employee and training used where appropriate in order to improve performance.
  • Consider whether any other action is required – depending on the seriousness of the poor performance, the employer must consider whether formal or informal disciplinary action is required.

 

MISCONDUCT

Overview

The ACAS Code of Practice on Disciplinary and Grievance Procedures sets out the procedure that employers should undertake when employees are to be disciplined or dismissed for misconduct, and case law provides plenty of examples of what is and what is not reasonable.

There are essentially two types of misconduct dismissal:

  • Dismissal after receiving warnings for misconduct, and
  • Summary dismissal for gross misconduct.

Where an employee commits an initial act of misconduct the employers should not use dismissal as the sanction unless the act amounts to gross misconduct.  Employers should include examples of gross misconduct within their disciplinary procedures.

Investigatory Meetings

Employers are required to carry out an investigation to establish the facts before carrying out a disciplinary process and dismissal (see above).

Notification

If, after carrying out the investigation, there appears to be misconduct, the employee should be notified of this in writing and invited to a disciplinary hearing. The invitation should, at least:

  • Set out the alleged misconduct;
  • Explain the possible consequences;
  • Give the date, time and place of the disciplinary meeting; and
  • Remind the employee that he has the right to be accompanied at the meeting.

Depending on the circumstances further information may be required.

Disciplinary Hearing

A disciplinary hearing or meeting with the employee must be held without unreasonable delay. Where the hearing could result in disciplinary sanctions employees have a statutory right to be accompanied by a Companion.  The employer may be willing to allow the employee to be accompanied by someone other than a representative or colleague where, for example, the employee is disabled, or other factors suggest it may be appropriate.

If the employee cannot attend the meeting, the employer must normally adjourn the meeting at least once.  The ACAS code does recognise some instances in which it may be appropriate to proceed with the meeting without the employee, but these are rare.

If further investigations need to be carried out as a result of matters raised during the meeting then the employer should adjourn the meeting and carry these out. The level of investigation that is appropriate will depend on the circumstances in question.

After the Meeting

The employer must decide whether disciplinary action is justified. If the misconduct is confirmed the employee will be issued with an appropriate written warning or dismissed.

The ACAS Code recommends administering at least two warnings before dismissing an employee for misconduct unless the misconduct amounts to gross misconduct.  Employees should be given at least one chance to improve before being issued with a final written warning.

The decision to dismiss the employee can only be taken by a manager who has authority to do so. The employee must be notified in writing of the dismissal without any unreasonable delay.

Appeal

The Acas Code requires employers to state the period for which a warning will remain active. The non-statutory Acas guide gives guidance on appropriate periods, and states that warnings would “normally” be live only for a set period (for instance, six months for a first written warning and 12 months for a final written warning) but does not rule out the possibility of an unlimited warning in appropriate cases, particularly where an employee has a history of allowing their conduct to lapse just after the expiry of warnings.

-The Employment Practices Data Protection Code issued by the Information Commissioner says that where disciplinary procedures provide for warnings to “expire” it should be made clear whether the warning is removed entirely from the record or is simply disregarded in determining a future disciplinary penalty. If the former, arrangements should be put in place for ensuring that deletion actually takes place at the appropriate time (Chapter 14, Part 2, Employment Practices Data Protection Code). However, it will not usually be in the employer’s interests to promise to delete warnings entirely from the employee’s record.

-The Employment Practices Data Protection Code issued by the Information Commissioner says that where disciplinary procedures provide for warnings to “expire” it should be made clear whether the warning is removed entirely from the record or is simply disregarded in determining a future disciplinary penalty. If the former, arrangements should be put in place for ensuring that deletion actually takes place at the appropriate time (Chapter 14, Part 2, Employment Practices Data Protection Code). However, it will not usually be in the employer’s interests to promise to delete warnings entirely from the employee’s record.

-The Acas Code requires employers to state the period for which a warning will remain active. The non-statutory Acas guide gives guidance on appropriate periods, and states that warnings would “normally” be live only for a set period (for instance, six months for a first written warning and 12 months for a final written warning) but does not rule out the possibility of an unlimited warning in appropriate cases, particularly where an employee has a history of allowing their conduct to lapse just after the expiry of warnings.

-The Acas Code requires employers to state the period for which a warning will remain active. The non-statutory Acas guide gives guidance on appropriate periods, and states that warnings would “normally” be live only for a set period (for instance, six months for a first written warning and 12 months for a final written warning) but does not rule out the possibility of an unlimited warning in appropriate cases, particularly where an employee has a history of allowing their conduct to lapse just after the expiry of warnings.

Employees must be given a right to appeal against any disciplinary action; this also includes a right of appeal against any warnings.  The appeal should be carried out impartially and where possible by a manager who was not previously involved in the proceedings.

 

 

APPROPRIATE SANCTIONS

Overview

Where an employee has committed misconduct or poor performance, the employer must consider the most appropriate sanction to impose, taking into account the following factors:

  • The gravity of the poor performance or misconduct;
  • Any mitigating factors or circumstances put forward by the employee, or known to the employer;
  • Whether a disciplinary sanction is reasonable; and
  • Whether any disciplinary sanction to be imposed is in line with sanctions that have been issued to other employees in similar cases.

The employer must notify the employee of the sanction without unreasonable delay, in writing and make clear the reasons for imposing the sanction. The employee must be given the right to appeal.

Informal Sanctions

In cases of minor poor performance or misconduct the ACAS Code of Practice suggests that informal sanctions be imposed, by way of a quiet word or an informal verbal warning. However, if the poor performance continues, more formal sanctions will be necessary.

Formal Sanctions

  • Verbal warnings – Verbal warnings are often regarded as the first stage of formal disciplinary proceedings. The issuing of a verbal warning should be recorded in the employee’s personnel file and should normally last no more than 3 months. The employer must inform the employee that the warning is a formal disciplinary action and that if they fail to improve their performance or conduct it will result in further disciplinary actions, and potentially dismissal.
  • First written warning – If the employee’s performance or conduct does not improve the employer should issue a first written warning.  When issuing an employee with a first written warning the employee should be informed that this is a formal disciplinary action, the details of the poor performance or conduct must be outlined and it must be clear that any further decline or continuation in the relevant performance or conduct could lead to disciplinary sanctions up to and including dismissal. A first written warning should normally remain in force for 6 months.
  • Final written warning – If the employee’s performance or conduct does not improve within the given period, a final written warning should be issued. A final written warning should never be issued before the employee has been given the opportunity to present his case at a disciplinary meeting. A final written warning should normally remain in force for 12 months.
  • Dismissal – Where the employer decides to dismiss an employee, the employee must be informed of this in writing without unreasonable delay. He should be informed of the decision to dismiss, the reasons for the dismissal, and the date when employment will be terminated. The employee must also be notified of the right to appeal against that decision.
  • Sanctions other than dismissal – Employers may decide to impose other sanctions, such as demotion or a reduction in salary where contracts permit such sanctions.  If the contract does not permit demotion or salary reduction the employer may be in breach of contract.
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How Can Magrath LLP Help?

 Our employment department acts on behalf of employers and employees.

Employers – We have extensive experience of drafting and implementing disciplinary procedures and reviewing existing company policies.  We advise on the merits of disciplinary action and appropriate sanctions. We tailor our recommendations to suit your business and commercial aims.  We are adept at managing employment relations to minimise the risk of claims being brought in the Employment Tribunal.  We can act as a sounding board and guide you through the process as required.  We frequently defend claims of unfair dismissal (often coupled with claims of discrimination or whistleblowing) in the Employment Tribunal – with excellent results.

Employees – If you are experiencing problems at work we can advise whether the procedures being used are fair and guide you as to appropriate conduct during the process.  We frequently liaise with employers to resolve workplace disputes effectively, and where resolution is not practicable our employment solicitors regularly represent employees bringing claims for unfair dismissal, constructive dismissal, loss of bonus or other remuneration and discrimination in the Employment Tribunal and High Court.


ACAS CODE OF PRACTICE

 Overview

The ACAS Code of Practice on Disciplinary and Grievance Procedures provides a legal framework designed to assist employers and employees deal effectively with disciplinary issues within the work place, particularly in cases where informal remedies have proved unsuccessful.

Failure to Follow the Code

If a claim is brought in the Employment Tribunal, the Tribunal will consider whether the Code of Practice was followed adequately by both parties. Failure to do so may affect the level of compensation awarded in certain types of claims, including unfair dismissal, discrimination and breach of contract.

For example, if a claim is successful, but the employee has not followed the Code of Practice, any compensation awarded can be reduced by up to 25%. Conversely, if a claim is successful and the employer did not comply with the Code of Practice, compensation may be increased by up to 25%.

Time Limits

Employees must normally present claims to the Employment Tribunal within 3 months less one day of the date when the act complained of, or the dismissal, occurred.

Checklist for Employers

  • Make sure disciplinary procedures are transparent and accessible to employees.
  • Where practicable, consult the workforce and their representatives on the content of your disciplinary procedures.
  • Train managers how to handle disciplinary issues effectively, when to involve HR, and how to spot when there may be a potential legal claim.
  • Encourage managers to resolve issues pro-actively.
  • Explain the allegations to the employee in writing and invite him to a disciplinary hearing.
  • Hold the disciplinary hearing and allow the employee to put his side of the story before and decision is made.
  • Adjourn to conduct further investigation if necessary and then hold another meeting with the employee to discuss investigative findings before making a decision.
  • Handle appeals appropriately.
  • Keep written records, including minutes of meetings.
  • Communicate decisions effectively and promptly, setting out reasons.

Checklist for Employees

  • Make sure you understand the allegations against you.
  • Make every effort to attend disciplinary meetings and consider bringing a Companion.
  • Submit a written appeal if you are not satisfied with the outcome and set out the reasons why you are not satisfied.
  • Be aware of the time limit for bringing an Employment Tribunal claim if the appeal is not successful or if your employer does not resolve it promptly.

SICKNESS ABSENCE DISMISSALS

Where sickness absence occurs, employers should carry out an initial investigation in order to confirm whether the ill health of the employee is genuine. If it appears disputable, employers should carry out further investigations and obtain medical evidence before deciding whether to undertake disciplinary action or terminate employment.

The law of unfair dismissal recognises that employers must follow a fair procedure and act in a reasonable manner if they wish to dismiss an employee who has been absent due to sickness or injury.  Careful consideration should always be given to employees who may be disabled and any adjustments that should be made.

Sickness absence or capability can be a fair reason for termination but it is vital to ensure proper procedures are followed.  As such dismissals are fraught with the risk of claims of disability discrimination advice should always be sought.

Fair reasons for dismissal

Employers will need to establish that they followed a fair procedure and that they acted reasonably by treating the absence as a reason for dismissal.

A key question will be whether the employer can reasonably be expected to keep the job open any longer and this will be based on the usual practice of the employer and the context of the employee’s job, illness, and length and pattern of absences.  If the employee is disabled the employer must make reasonable adjustments.

Dismissing an employee as a result of pregnancy or any maternity related illness is unlawful. If an employee is disabled then the employer must be careful to avoid direct discrimination, discrimination arising from disability, indirect discrimination, victimization, harassment or discrimination on the grounds of failing to make reasonable adjustments.

In order for a dismissal by reason of sickness absence or capability to be fair employers will need to implement a fair procedure.  Every situation is different, but a fair procedure will normally involve the following steps:

  1. Establish the reason for absence.
  2. Monitor the employee’s absence. The fact that attendance is a cause for concern should be highlighted in an informal interview with the employee.
  3. If there is no improvement in attendance, the employer should decide whether to move into a formal capability procedure with a view to issuing a formal warning or moving to dismissal.  Whether warnings are appropriate and the terms of them will depend on the circumstances.
  4. Obtain medical evidence.
  5. Meet and consult with the employee regarding the medical evidence.
  6. Any warning should be accompanied by suggestions for improvement within a given timescale and the measures the employer will take if there is no improvement.

Dismissal Meeting

Dismissals for capability are lawful but can be difficult to justify in the Employment Tribunal. If the employer does resort to dismissal then the employer must satisfy themselves that a fair procedure has been followed.

A meeting must be held in order to discuss the dismissal. The employer must write to the employee to inform them that dismissal is being contemplated. The letter should outline the details of the absence, enclose the medical evidence and contain the date, location and timing of the meeting, as well as reminding the employee of the right to be accompanied.

The employee must be given the opportunity to put forward their case and raise any mitigating circumstances.

If an employee fails to turn up for a meeting and their failure is attributable to their illness, the employer should normally adjourn the meeting at least once.

How Can Magrath LLP Help?

Our highly skilled employment solicitors assist employers and employees in managing employment relations. We are experts in advising on resolution of workplace disputes and can assist employers in introducing and operating fair disciplinary and performance management procedures.  We advise on all aspects of managing the employment relationship from workplace mediation through to bringing and defending claims in the Employment Tribunal, Employment Appeal Tribunal and High Court.

Managing sickness absence is particularly difficult as employers must retain a balance between acting in the interests of the company, taking into account the pressure long-term absences place on other employees, and the interests of the individual. We have extensive experience of advising employers and employees on long term absence and capability.  We are also able to refer companies to health professionals who can assist in preparing reports for employees.

If you would like advice in respect of these or any other issues, please contact: