A guide to disciplinary procedures for small companies

Disciplinary procedures can vary between companies. However, any company that employs staff is likely to need to carry one out at some point.

Small businesses that have not carried out disciplinary procedures before should be prepared to deal with these situations correctly and fairly. This is because they may be used as evidence of a fair process at an employment tribunal at a later date.

Below, we will guide you through a typical disciplinary procedure. We will also explain the key things an employer should do to ensure they protect themselves from falling foul of employment laws.

Informal measures

In the first instance, you could consider an informal approach. This may be a suitable option if the matter is not of a serious nature. Instead, it can be used to handle recoverable issues like persistent lateness, missed deadlines, or performance-related problems.

If the issue relates to performance, the most common informal procedure is to place the employee on a Performance Improvement Plan. This cites objectively what the issues have been in the recent past and what they need to do to improve.

This meeting should be documented. You should also outline what steps you are taking to assist the employee in reaching their targets, as this helps you to appear reasonable.

You should meet with the employee at the start of the Performance Improvement Plan, in the middle of the two-week plan, and at the end of it. At the end of the plan, you should provide them with a final document of their performance versus the target during the plan. Additionally, you should explain whether the employee has made or failed to make the required target.

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For issues that don’t relate to performance (such as sickness absence), we recommend providing a Verbal Warning. This penalty means that any future pattern of absence may lead to a formal disciplinary procedure being invoked.

Formal disciplinary procedure

If the matter remains unresolved, or if there’s a more serious allegation (such as misconduct or gross misconduct), you should proceed to the formal disciplinary procedure.

1. Gather evidence

The person carrying out the disciplinary hearing should start by compiling all evidence required to support the allegations against the employee. This evidence should be comprehensive and compiled on the basis that an outside party (e.g. an employment tribunal) may be laypersons and not have an in-depth knowledge of your company’s processes.

For performance-related issues, this may comprise documentation relating to a Performance Improvement Plan in which the employee has not reached their target. It may also include quantifiable data showing the employee’s performance, as well as their colleagues’ performance in a similar role (to act as a fair comparison to an outside observer).

For sickness absence issues, this may comprise evidence of the employee’s sickness absence record. It should also include confirmation as to whether the absences were self-certified or certified by a medical professional.

For misconduct or gross misconduct issues, you should include witness statements from relevant employees. You should also use any other supporting evidence, such as statements from the company’s IT department, call recordings, or footage from CCTV, etc.

2. Schedule a hearing and send an invitation letter to the employee

Once you have gathered all of the evidence, you need to schedule a hearing to investigate the issue. In preparation, you must let the employee know that a disciplinary hearing will take place.

Notice should be given in writing via an invitation letter. You should also enclose copies of any documentary evidence supporting your allegation(s), which will be used at the disciplinary hearing accompanying this letter.

The invitation letter should explain:

• The allegations which led to the employee being invited to disciplinary.
• Possible consequences (e.g. Final Written Warning or Dismissal).
• Their right to be accompanied by a colleague or trade union representative (and the requirement for them to inform you in advance if they wish to be accompanied and by whom).
• The time, date, and venue of the hearing. The hearing should be held at least 3 working days after the delivery of the letter, to allow the employee to arrange for a companion to attend. However, the hearing should be held no later than 2 weeks after the letter, to avoid unnecessary stress.
• Identify the person who will be attending on behalf of the company in the capacity of the decision-maker and note-taker.

Finally, depending on the severity of the situation, you may consider suspending the employee on full pay in the lead-up to the hearing.

You should only consider this where the allegation – if proven – means that the employee’s position in the company could prove immediately untenable. You must not suspend employee’s without full pay, as this is contrary to the Wages Act 1986.

3. Conduct the disciplinary hearing

You now need to carry out the disciplinary hearing. This is where you meet with the employee to discuss the allegations and ‘hear’ their version of events. The employee’s companion (if requested) and the company note-taker who will compile minutes, should also be present.

The person conducting the meeting should introduce all parties present and explain the possible outcomes of a disciplinary hearing. They then need to go through the allegations and supporting evidence for them. Next, the employee may give their comments on these.

Once the employee has presented their case, you should adjourn the meeting to consider what outcome you have decided to issue. Outcomes should usually be delivered within one working day, to prevent any unnecessary stress caused by a delay.

You should not provide an outcome within the same meeting, if the case is investigated by an employment tribunal in the future.

4. Decide the outcome

After the disciplinary hearing, you need to decide the outcome. You should be as fair as possible in assessing the evidence put forward. There are typically six possible outcomes you may issue after a disciplinary hearing:

No further action

You have deemed no penalty should be applied. Also, the disciplinary cannot be mentioned formally against the employee at a later date.

Verbal warning

This lowers the threshold for the employee to be called to a future disciplinary hearing for a similar reason within the foreseeable future (i.e. next few months).

Written warning or Final written warning

This lowers the threshold for the employee to be called to a future disciplinary hearing for a similar reason within the foreseeable future. It remains on their personnel file for 12 months and can be added to a subsequent disciplinary hearing outcome to provide a more severe penalty.

Dismissal

This is where the employee has met the threshold deemed by the company that they can no longer be employed. The company serves their notice of employment, which will end at the end of their notice period.

You would only dismiss someone for this reason after they had a Written Warning and a Final Written Warning on their personnel file. The reason for this is to appear reasonable to an employment tribunal.

Dismissal for gross misconduct

This is reserved for instances where an employee has carried out an act that would make their position in the company untenable. This includes committing a criminal act or bringing the company into serious disrepute.

Your Company Handbook and employment contracts should state that an employee dismissed for gross misconduct is not entitled to their notice period pay. You will not need to pay them for their notice period and their final day of employment for payroll purposes is the dismissal date for gross misconduct.

5. Deliver the outcome to the employee

Once you have determined the outcome you wish to provide, you should meet with the employee to explain the outcome to them (including any ramifications as mentioned above). You should then confirm the outcome in writing, citing that they have the right to appeal your decision.

After the disciplinary procedure

Following the disciplinary procedure, there are several things that you, as the employer, need to consider:

Appeals

The employee has the legal right to appeal if they disagree with the outcome, the way the investigation was handled, or if they have new evidence to submit for the case. The way an employee appeals should be cited in the letter to the employee, confirming the outcome of the disciplinary hearing.

If an employee appeals, another employee who is not subordinate to you will need to hear the appeal. They will also need to carry out another investigation (if necessary), consider an alternative outcome, and inform the employee of the decision in writing as soon as possible.

Employment tribunals

Employees who have been continuously employed for less than two years at the time of termination of employment do not have the automatic right to take their case to an employment tribunal.

However, if they have a ‘protected characteristic’ that is protected by the Equality Act 2010, they have the right to an employment tribunal. That is if they cite this as a discriminatory reason for dismissal and an employment tribunal accepts this. The protected characteristics are:

• Age
• Gender reassignment
• Being married or in a civil partnership
• Being pregnant or on maternity leave
• Disability
• Race (including colour, nationality, ethnic or national origin)
• Religion or belief
• Sex or sexual orientation

You should take these protected characteristics into account before deciding whether to dismiss someone who has less than two years of continuous employment.

Employers who are found to have unfairly treated someone with a protected characteristic during a dismissal will be automatically deemed to have ‘unfairly dismissed’ the employee. In turn, this could lead to an uncapped compensation award being made against the company (commonly up to 2 years’ salary).

Employees with over 2 years of continuous employment have an automatic right to request an employment tribunal, and there is no fee required to request one.

Thanks for reading

So, there you have a step-by-step guide to typical disciplinary procedures and how to prepare for them. If an informal approach doesn’t work, you’ll need to schedule a disciplinary hearing and invite all relevant parties, carry out a fair investigation into the matter, and follow up with an appropriate outcome.

The key thing for employers to remember about disciplinary procedures is that they must be fair, impartial, and reasonable. You should always compile evidence as if it was being viewed by an outside observer.

Additionally, you should consider if the employee has any protected characteristics when deciding your outcome, or if they have over 2 years of continuous service.

Thanks for reading. If you have any questions or comments on this topic, please post them below.