The Employment Act 2002 (Dispute Resolution) Regulations 2004 came into effect on 1 October 2004. They aim to encourage employers and employees to resolve disputes through dialogue, easing the pressure on employment tribunals and reducing costs.

As a result of the legislation, employers need to follow a three-step procedure for handling dismissals, disciplinary actions and grievances.

Dismissals and disciplinary action
The procedure:

Step 1 – Put it in writing
Put the grounds for disciplinary action or dismissal in writing and give a copy to the employee.

Step 2 – Talk it through
Hold a face-to-face meeting with the employee. Afterwards, tell your employee what your decision is and offer them the right to appeal.

Step 3 – The appeal
If the employee wishes to appeal, they must tell you. You must invite them to a second meeting to discuss the appeal and give the employee your final decision after the meeting.

Remember:

• Each step must be taken without unreasonable delay
• The timing and location of the meetings must be reasonable
• You must ensure the employee has all the relevant information in advance of the meeting
• Meetings must allow both you and the employee to explain your cases
• In the case of an appeal meeting, you should, where possible, be represented by a more senior manager than attended the first meeting
• The employee has the right to choose to be accompanied to both meetings by either a colleague or a trade union official
• If the employee or person accompanying them is disabled you must take this into account and ensure they can participate fully.

If the employer fails to follow the procedure:
• The dismissal becomes automatically unfair (where the employee has the right to claim unfair dismissal)
• A mandatory minimum of four weeks’ pay is awarded to the employee
• Any additional compensation is increased by a minimum of 10% up to a maximum of 50%

If the employee fails to follow the procedure:
• Any award is reduced by a minimum of 10% up to a maximum of 50%

The modified procedure:

There is a modified procedure for certain situations, including:
• some collective or constructive dismissals
• some gross misconduct dismissals
• dismissals where employment cannot continue for reasons beyond anyone’s control
• all disciplinary action except oral and written warnings and suspensions on full pay

Step 1 – Put it in writing
Send the employee a written explanation of the alleged misconduct that led to their dismissal – including the evidence for this decision and the employee’s right to appeal.

Step 2 – The appeal
If the employee wishes to appeal they must inform you. You must invite the employee to a meeting to discuss the appeal and give them your final decision afterwards.

Grievances

When an employee has a grievance against their employer the procedure is the same, except that for Step 1 the employee must send a written explanation of their grievance to you, stating the basis for the complaint. There is also a modified two-step process. The procedures apply to grievances that could form the basis for a tribunal complaint. Therefore, when a grievance is lodged with an employer, they must decide if it could eventually form the basis of a tribunal case and, if so, follow the procedure accordingly.

The procedures are deemed completed where a party fails to adhere to them because of a reasonably held belief of a threat, of continuing harassment or where it is not practicable for the party to complete them within a reasonable period.  

Does the procedure apply in any other situations?

The dismissal and disciplinary procedure applies beyond many employers’ commonsense understanding of a dismissal. It also includes the end of a fixed-term contract, enforced retirement and small-scale redundancies.

Although the new procedure doesn’t technically apply to action against an employee on conduct or capability grounds where only an oral/written warning is given, it does apply where there is any possibility of other action as a result.

This includes action such as demotion or a performance improvement plan in the context of capability.

Practically, therefore, employers will need to observe the procedure in most conduct and capability situations.

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