A step-by-step guide to the disciplinary procedure

1 Jul 2021 | 15 min read

Small business tips

As a small business, your employees are one of your most important assets.

But employer-employee relationships can sometimes prove difficult to navigate, such as when set standards of performance or conduct are breached.

This is why businesses need to have certain procedures in place that allow them to deal with issues fairly and effectively.

One of these procedures is the disciplinary process—a series of steps designed to help businesses solve any performance or conduct-related issues in a work environment.

As a small business owner, no matter what type of disciplinary procedure you choose, the end goal is universal: ensuring employee productivity and satisfaction within an organisation.

In this article, we’ll walk you through each step of the disciplinary procedure recommended by the UK government so that you can effectively implement it for your own business.

Step 1: Considering the options

The first step of a disciplinary procedure involves identifying the problem and understanding the options you have to solve it in a legal and effective manner.

While, there are many reasons why grievances and disputes can occur in a work setting, most disciplinary issues are related to misconduct or poor employee performance.

Some common disciplinary issues include:

Poor timekeeping
Unauthorised absence
Health and safety breaches
Negative attitude in the workplace
Theft
Inappropriate phone and internet use

We will discuss what formally counts as misconduct in a later section.

So, how do you solve these issues?

There are generally two methods an employer can use to settle disputes or grievances with their employees:

1. Informal action

The best and easiest way to solve a disciplinary issue is by informal means. That’s because handing it informally can save you valuable time and resources, depending on the severity of the conduct.

One informal way to solve an issue is to communicate directly with your employee. This involves discussing the issue with them, inquiring about why the issue took place and trying to find a reasonable ground to reach an agreement.

But communicating effectively is easier said than done. In order to get the best results, you need to ensure you are committed to having meaningful interactions with your team.

This is especially important for small businesses, given that you most likely have a modest-sized staff that you lean on to add value to your business and help you grow.

How to take informal action

For example, in the case that you have a performance issue with one of your employees, following these steps will give you a better chance of reaching a satisfactory outcome:

Truly listen to what your employee has to say. Effective listening means removing distractions and being entirely present. Take the conversation as seriously as the problem itself.
Be open to their explanation. Avoid coming across as reactive and defensive and don’t interrupt, even if you disagree with what they’re saying. The more respect you show, the more you’ll receive down the line if you do need to take further action.
Ask questions and empathise. This shows that you’re interested in what they have to say and allows you to establish a deeper connection with your employee that may help to resolve the issue at hand.

Top Tip: To learn a few more tips and tricks for solving employee issues informally by creating an empowered, fair, and results-driven workplace environment, read our guide on how to become an effective communicator in business 📣

Even though it’s technically informal, it’s still a good idea to keep a record of the conversation(s) with your employee. This will be useful in future performance reviews and appraisals as well as tracking their overall progress.

However, serious issues that qualify as gross misconduct (more on what this below) such as theft, for example, are quite different from poor timekeeping. If an informal conversation regarding a theft does not go well, it may be time to take formal action.

Note: When you try to solve a problem informally, make sure the employee knows that formal action may be taken if the issue is not resolved ⚠️

2. Formal action

When a situation is more serious and can’t be solved informally, you may need to resort to a formal disciplinary action (which could eventually lead to a dismissal). In this case, a formal proceeding benefits all involved parties; the employer, the employee, and the business.

Why? Because allowing a bad situation to linger can seriously diminish the business culture that you’ve worked so hard to cultivate.

Bad hires are also quite costly and the recruitment, onboarding and training process is time-consuming. In fact, if you hire somebody at an average salary of £27,721 it could cost up to £12,000 to replace them.

That figure is based on time and resources spent on crafting the job spec, screening candidates, the interview process, onboarding and training, and any benefits associated with a new hire.

Further, keeping an employee on board who isn’t a good fit holds them back from their own professional development journey.

How to take formal action

In the circumstance of formal action, it’s recommended to follow the Acas Code of Practice on disciplinary and grievance procedures. Namely, Acas states that you should:

Establish the facts by carrying out necessary investigations
Inform the employee of the problem (along with evidence you’ve collected) via a written notification
Provide details of the time and venue for the disciplinary meeting
Allow your employee to be accompanied at the meeting (as is their statutory right)
Decide on appropriate action (e.g. a final written warning or a dismissal) after the meeting and notify your employee of your decision in writing

Although you’re not legally bound to follow it, employment tribunals typically take the Acas Code into consideration when deciding if you have acted reasonably or not in making this decision.

If you fail to follow these practices, you may be liable to pay higher compensation to the employee if the tribunal finds you were in the wrong.

Before we move onto the actual proceedings of the disciplinary process, let’s identify exactly what counts as misconduct and gross misconduct on behalf of the employee.

What counts as misconduct

Misconduct is a common occurrence where an employee misbehaves or breaks the workplace rules. This includes bullying, insubordination, and even unauthorised absences.

What counts as gross misconduct

Gross misconduct is a significant problem that has serious effects on the workplace. It’s difficult to define every single type of gross misconduct as there can be many, and you must ultimately decide what falls into this category before any disciplinary hearing.

Here are a few examples of what can count as gross misconduct:

Any fraudulent activities
Physical violence or attack against another person
Serious insubordination
Lack of care for duties and others around them (gross negligence)
Misuse of confidential information
Offering or accepting bribes
Damage to property

Top Tip: Another common misconduct is employees misusing or taking advantage of company cards or petty cash. The best way to avoid company expense (or any type) of misconduct is to create and distribute an effective policy so your employees know exactly what is expected of them and the consequences of not following set guidance. To learn more, read our guide to how to create a company expense policy 📌

Step 2: Following a fair procedure

A disciplinary procedure is carried out by an employer for one of two reasons:

Misconduct. An issue with an employee’s behaviour, attitude, or an act that they commit in or out of the workplace.
Capability. An issue with an employee’s poor performance that hinders the growth and profitability of the business.

We’ve already talked about the Acas Code of Practice that needs to be followed by businesses for a fair procedure. However, it’s imperative to keep in mind that the code mainly applies to employees with employment status.

Types of employment status

An employee’s employment status is their legal status at work. It determines how they get paid and their rights and responsibilities.

There are three types of employment statuses under UK law:

1. Employee

Employees are people who sign an employment contract, are given regular work and are hired to complete it without relegating the work out to others.

2. Workers

Workers are people who sign a contract for providing specific services, may or may not be given regular work, and are hired to complete it without delegating the work to others.

3. Self-employed

Owners or freelancers who are responsible for how and when they work are classified as self-employed. They may charge varying fees to different clients, do not get paid leaves, and are able to delegate work to others.

Top Tip: Understanding the various types of employment status is also incredibly important when considering annual or statutory leave. That’s because employees are entitled to different amounts of legal time off depending on the type of contract they are on. To learn more, read our guide to calculating annual leave and creating an annual leave policy 🔍

In order to maintain a healthy work relationship with your team, it’s advisable to keep the same rules for all employees, regardless of their employment status. This way, you hold everybody to the same standards to ensure that everybody’s actions align with your company’s core values.

If you aren’t sure about the employment status of the person you need to take formal action against, the government suggests that you contact Acas for advice.

Ultimately, the courts and tribunals will make the final decision on whether or not this person legally has employment status or not.

Communicating with concerned staff

Even if you begin formal disciplinary proceedings against an employee, it’s important that you continue to keep lines of communication open with not only the concerned employee but with everybody who is being affected by the procedure.

In order to avoid a drop in work morale, misunderstandings, or additional legal action from other workers, you should be as consistent and clear as possible with all involved parties.

As going through a disciplinary procedure is stressful, you must also take care of the wellbeing and mental health of your employees. The last thing you want is a formal proceeding negatively affecting your team’s overall mental health, motivation and productivity.

You could even consider setting up meetings away from the office environment with your employees going through disciplinary action to create a more comfortable space for discussing the issue at hand.

Note: According to the Acas Code, an employer must keep all communication with the concerned employee confidential.

Top Tip: Effectively managing tough situations is part of a leader’s job description. Yet, how you navigate tough situations varies depending on your leadership style. That’s why it’s so important to choose a leadership style that suits the workplace culture you’ve set out to build. To learn more, read our guide to 6 effective management styles to become a stronger leader 🔥

Employee grievances and resignation during the disciplinary procedure

During the course of the disciplinary procedure, the concerned employee might raise a grievance, or a problem they’re facing at work.

In that case, you must address the grievance first, before continuing with the formal disciplinary action. But if the two are directly related, it’s advisable to carry out both procedures at the same time.

Further, if the concerned employee attempts to resign from the company during the disciplinary process, they may do so for one or both of the following reasons:

To avoid facing any penalties (if the fault is primarily their own)
To claim ‘constructive dismissal’ at the employment tribunal (if the fault is primarily yours)

Constructive dismissal is when the concerned employee feels that they are being forced to resign because you’ve made workplace conditions unbearable.

Here are a few situations where an employee may feel that they have been constructively dismissed:

Uncalled for demotion
Bullying or discrimination
Being paid incorrectly

If the employee does intend to claim constructive dismissal, they will need to prove that they left as soon as they believed improper treatment began. Otherwise, the act of staying could be argued as accepting the conduct or treatment that you as the employer put forth.

Note: Employees can only claim constructive dismissal if they’ve been working for your organisation for more than two years.

Step 3: The investigation process

How to avoid a constructive dismissal claim infographic

Now that you fully understand what counts as a fair procedure and are ready to follow it, the next step is to proceed with the formal investigation process.

This involves getting hold of as much information about the issue as possible in order to make the right decision.

The Acas Code requires businesses to ensure a “reasonable” investigation, and failing to do so may result in legal action. More on this later.

Preparing for an investigation

To begin the process of investigation, you need to assign a certain manager to collect information. This should be someone who is not directly involved in the case, usually from the HR department.

The key is to do this immediately after a disciplinary issue occurs so that employees are treated fairly.

There are usually three steps that make up the disciplinary procedure; investigation, hearing, and appeal hearing. It’s generally good practice to appoint a different person for each step.

However, you must also decide on who will have the final say once all the information has been collected.

Once you’ve assigned a team to carry out an investigation, they should start by making an investigation plan. It should ideally include the following:

Material to be investigated
Witnesses that need to questioned
Time frames
Sources of evidence
Current policies at work

Note: Employers must notify the employee that they are being subjected to an investigation.

Carrying out the investigation

The people that you task with the investigation must be impartial in their decision-making and follow the company policies. They must also keep the case confidential.

The investigators may take as long as they need to carry out the investigation, but they must be thorough and fair in whatever they do. Some cases may take only a few days, while others may stretch for weeks, depending on the complexity of the case.

It’s common that investigators will access work emails, phone records and CCTV footage of the concerned employee. However, they must always respect the employee’s right to privacy.

While talking to witnesses, the investigator must keep a record of their statements—audio or written. If appropriate, the employee under investigation can also get witness statements. All witness statements or interview records must be kept confidential.

The investigators can also hold important meetings with the concerned employee, where an employee may be allowed to bring a companion.

In case the employee fails to show up at a meeting due to illness, stress, or any other reason, the investigation can still continue. But employers must notify the concerned employee of what they missed to ensure that the investigation remains as fair as possible.

Post-investigation

The investigators must notify you as soon as the investigation ends.

They must do so in the form of a report, which should include all evidence collected, witness statements, and any other material they found during the course of the investigation. It may also include any possible recommendations for how they suggest you proceed.

Once you receive the report, you must share a copy with the concerned employee.

Step 4: The disciplinary hearing

Once the investigation has concluded, the concerned employee can be asked to contest their case in a disciplinary meeting or hearing.

It’s your responsibility to notify the employee about the date and time of the meeting in writing, along with the alleged misconduct or performance issue they’re facing, and even possible outcomes based on the investigation.

In this meeting, the employee can bring any evidence along with them to prove their innocence, such as emails or recorded phone calls.

Just like in the investigation meetings, employees have the right to bring along a companion to the disciplinary meeting as well. The companion could either be a work colleague, or a workplace trade union representative.

The disciplinary hearing process

Employers, employees, and the employee’s companion all have a say in the meeting.

As the employer, it’s your job to start the hearing by communicating any alleged misconduct or performance issues, sharing the results of the investigation, and notifying the employee of any evidence or witnesses regarding the issue.

Once you’ve shared, the employee has the right to contest each allegation by presenting their own witnesses and evidence. They have the right to answer any allegations and set out their case.

The companion can speak on behalf of the employee, advise the employee during the hearing, and take notes to keep a record of the meeting.

After the hearing is concluded, take your time to finalise your decision. Weigh your options to discern if your employee made any valid counter-points to change your mind, or if their reasons for the misconduct felt more like excuses for improper behaviour.

Step 5: Deciding on the best outcome

As soon as the decision is finalised, notify your employee immediately.

In the case that the investigation deems that there is no need for any further action, you should ideally hold private talks with the concerned employee so there are no bad feelings between the two parties.

If you choose not to dismiss your employee, now is the time to lay out specific goals and timelines to help them improve. In the meantime, you must officially note that if they fail to improve, dismissal is the only fair and reasonable option.

These official notices come in the form of warnings, and there are two ways to issue such warnings:

Informal warning

If the issue was small, you can simply talk with the concerned employee and guide them on how to improve.

Although not necessary, it’s a good idea to keep a confidential, written record of any informal or verbal warnings.

Written warning

If the results of the investigation show that the employee can do better, or has the potential for improvement, a written warning can be issued to them.

A warning letter should typically include the following:

A brief summary of the issue(s)
Required changes and improvements
Any timeframe given to the employee
Possible scenarios if the problem persists
Duration of the warning

It’s a good idea to send multiple warnings to the employee before dismissing them. However, that entirely depends on your company policy.

Other disciplinary action

You may also choose to demote your employee to a less challenging role if you feel their current position is not a good fit at the moment.

However, we only recommend doing this if you plan to give them an opportunity to earn back their position. Otherwise, this will most likely discourage them from working hard and feeling motivated to succeed. Make sure to provide them with plenty of support so that they can train, improve, and regain their position.

You must set a timeframe for how long they have to regain their role, or else you risk wasting valuable time while paying an unhappy employee to do a subpar job.

Dismissal

In the case of employee dismissal, you should immediately communicate the reason for dismissal, notice period, and the employee’s right to appeal.

The employee has a right to appeal if they feel that the results of the investigation are severe, or if the disciplinary procedure was wrong.

Step 6: After the disciplinary procedure

Regardless of the outcome of the disciplinary procedure, it’s a good idea to keep things as transparent as possible with your staff to avoid any gossip or low work morale.

It’s also advisable for business owners to keep a thorough record of the procedure that was carried out. However, to remain in line with the data protection law, the records should stay confidential, and only be kept for as long as necessary.

The disciplinary records can be used as a case reference if similar issues arise in the future.

Wrapping up

Every business should try to establish and maintain a productive and satisfactory work environment for its employees.

Utilising your own HR team, or consulting with outside Human Resource Business Partners (HRBP’s), can be incredibly helpful in this process.

HRBP’s can help you to promote the utmost fairness and transparency during a disciplinary procedure and assist in creating and maintaining a positive workplace environment. If an issue arises, whether informal or formal, HR personnel are qualified to manage and support your team through these sensitive matters.

This is why understanding how to properly carry out a disciplinary procedure is so important. It ensures that the process is fair and reaches an effective decision that is optimal for your business and your employees alike.

Photo by Sora Shimazaki, published on Pexels

Emily Bates

Lead Talent Partner