1. Introduction to Disciplinary

In this introduction to disciplinary we consider the legal requirements and provide an overview of the disciplinary procedure.  Every situation will be slightly different, so each case has to be considered based on its own particular circumstances and facts. 
Not every disciplinary situation will lead to dismissal, but it is important to act 'as if' it may, to ensure that the correct procedures are followed (and to avoid grievances or other internal issues that could arise from not following the correct procedure).
The disciplinary procedure is used to manage the following types of cases:
  • Rule breaking and/or how someone acts or behaves.
  • Where someone is not performing in their role. Often referred to as 'poor performance'
  • Relating to ill- health i.e. where someone not capable of performing their job role because of ill-health (generally referred to as capability)
You may have a disciplinary procedure and a separate capability procedure, or they may be combined in one procedure (see Disciplinary Procedure). 
Ill-heath will be dealt with under capability, and the general procedure set out in these guidance notes will be applicable when managing ill-health. However, in these cases it is appropriate to manage the process considering the welfare of the individual (and making the process and language more appropriate). Please see the section on Absence and medical capability for further guidance 
You should refer to your company disciplinary procedure when reading these notes.  There is also a template Disciplinary Procedure available in the templates section, which complies with the ACAS code of practice
If an employer, having followed the disciplinary procedure, dismisses an employee, and the employee makes a claim to an employment tribunal, the employer will have to demonstrate the following:
  1. the reasons for dismissal – i.e. why the employer dismissed the employee, and;
  2. that this reason fell within one of the accepted reasons for dismissal (conduct, capability (performance or ill health), redundancy, some other substantial reason, or breach of statute) and; 
  3. that the employer acted reasonably and fairly in treating it as a reason for dismissal;
  4. that they have adhered to the ACAS code of practice on disciplinary.
This means that the ‘performance or conduct’ must be serious enough to justify dismissal either because it is a very serious matter that amounted to gross misconduct, or the employee has received a number of warnings on the same or a similar issue and there has been little or no improvement. 
It is extremely rare in cases of poor performance (or other capability areas) to go straight to the dismissal stage as you need to give the individual time to improve. If the matter of poor performance were so serious to consider dismissal as the first step, this would generally mean that it also falls within the sphere of misconduct or some other substantial reason.
The reasonableness of a decision to dismiss will also depend on the procedure followed (e.g. whether there was a full and fair investigation, did the employee have an opportunity to state their case) etc, and it should be noted that the majority of employment tribunals are lost because a fair procedure was not followed (i.e. the decision to dismiss may not have been wrong – but the way the employer went about it was!). 
It is therefore essential to follow a fair procedure and also to make sure that the procedure and steps you take are clearly documented, so this can be demonstrated to the employment tribunal (i.e. showing letters written to the employee demonstrating each stage of the procedure was followed, documenting how you carried out the investigation, collecting written witness statements etc).  
An Employment Tribunal will also consider the current ACAS code of practice. The steps in the ACAS code should be incorporated into your own disciplinary procedure as failure to follow the ACAS code will be an indication that a fair procedure has not been followed and an employment tribunal may increase an award of compensation by up to 25%.  
Why have a disciplinary procedure?
All organisations that employ staff are legally required to have a written disciplinary (and grievance) procedure and need to communicate / make this available to employees (s1 Employment Rights Act 1996).
Note: If you have your own procedure you should check to ensure that it covers all the elements that will make up a fair procedure and that any action you intend to take is in line with your procedure. You should also check whether or not your procedure is contractual. If it is, and you do not follow the full procedure there could be a further claim for breach of contract. It is recommended that your procedure is NOT contractual for this reason. Please see the template Disciplinary Procedure for further guidance.
A fair disciplinary procedure provides an opportunity for the employer to clearly and formally state what is required and the consequences of non-compliance.  It also gives the employee an opportunity to state their version of events (or to provide any reasons they believe may contribute to their underperformance); or to present any mitigating circumstances. 
One of the key purposes of disciplinary action is to communicate and encourage the required standards of conduct and performance and, when successful, this is beneficial to both the employee and the employer.  
It is important to remember that the disciplinary procedure will not always lead to dismissal. The first objective is to help the employee achieve what is required. It will only be in serious cases or where the employee’s conduct or performance does not improve that dismissal may be considered.  
However, every time the disciplinary procedure is invoked the employer should bear in mind that a full and fair procedure must be followed in order to ensure compliance with legal requirements and in order to be able to rely on any ‘warnings’ in the future.
Note: you cannot fairly discipline someone for something they knew nothing about! And it would be unfair to dismissal someone for gross misconduct if they were not aware that this could be a consequence of their action. Therefore, you need to document and communicate your 'codes of conduct' and any matters that may be considered to be gross misconduct. See Avoiding Disciplinary Action for further details and the Policy section for draft policy documents on codes of conduct/standards. You should also ensure that the list of gross misconduct in your policy is comprehensive. 
Qualifying Period and Costs
Generally an employee has to have been continuously employed by a Company for more than two years before they are protected against unfair dismissal. This means that they cannot make a claim to an employment tribunal for unfair dismissal if they have less than two years service. But please note: There are important exceptions to this and employees with less than two years of employment may still make claims if the dismissal is for a reason related to health and safety, trade union membership, pregnancy, asserting a statutory right, discrimination (e.g. disability, sex, race, pregnancy etc), Public Interest Disclosure (whistleblowing).
If a dismissal is found to be unfair by an employment tribunal an employee will be awarded a compensation payment. The maximum compensation for unfair dismissal changes every year.  Any award will be based on a number of factors including loss of earnings up to the date of the employment tribunal hearing, and possibly loss of future earnings. However, an employee also has a duty to try to mitigate their losses (i.e. find another job) and any compensation may be reduced if an employee contributed to the dismissal (contributory fault). In addition, an employee who successfully wins an unfair dismissal case will be awarded a basic award that is based on their age and length of service. In discrimination cases an employee will also be awarded a compensatory payment for injury to feelings.
There are also other costs associated with an employment tribunal claim such as legal costs. It can be costly to prepare and attend an employment tribunal hearing and for a relatively straightforward case, costs can be in the region of £15k or more for preparation and the hearing if you engage solicitors / barristers.  For all these reasons' prevention is better than cure and minimising the risk of an employment tribunal claim by following a full and fair procedure cannot be overemphasised.
Note: it is possible to take out insurance against employment disputes. You may find that you have some cover under your normal business insurance (legal expenses insurance). It is advisable to understand what you have in place and the terms of any cover, should you need it.