The Government’s scrutiny of Acas’s Code of Practice on disciplinary and grievance procedures is one of the less newsworthy aspects of its ongoing review of employment law. But would tinkering with the Code really be a good idea?
Last month saw the close of a call for evidence by the Department for Business, Innovation and Skills (BIS) on Dealing with dismissal and compensated no fault dismissal for micro businesses. Media coverage has understandably focused on the controversial idea of no-fault dismissal, but it now seems highly unlikely the Government will proceed with this, even for small employers. You can read the BIS Dealing with dismissal and 'compensated no fault dismissal' for micro busninesses call for evidence document here.
In contrast, the possibility of revising the Acas Code of Practice remains a live issue. BIS’s call for evidence posed questions around whether the Code provides sufficient flexibility for performance dismissals and how practically burdensome it is for employers. It also asked for comments on whether there should be a separate code for small employers.
Various criticisms can legitimately be levelled at the Code. For example, its language of warnings is more appropriate for misconduct than performance issues, and there is insufficient guidance on troublesome aspects of grievances. How are employers supposed to deal with employees who raise serial complaints? What approach should be taken to resolving overlapping grievances? And so on...
However, a working party set up by the Employment Lawyers Association – which I chaired – has decided that the current version of the Code and its accompanying guidance are sufficiently flexible to apply to most scenarios. We concluded that they are infinitely better than the disastrous statutory dispute resolution procedures they replaced in 2009. The last thing business needs right now is to have to adjust to new regulations, or multiple codes for different scenarios. Confusion and satellite litigation would inevitably follow.
But what about the impact of the Code on small firms with limited resources and no access to sophisticated legal and HR support? The time and cost of handling a disciplinary or grievance process can be disproportionate for such employers. Yet it is unlikely these problems would be solved by creating a new, alternative Code specifically for them.
Even if the problems of clearly defining a “small” or “micro” business could be overcome, there is a fundamental problem with implementing a “procedure lite” code. The current version encapsulates the standards of general unfair dismissal law, which require an employer to establish the facts, inform the employee of the problem, hold a meeting, allow the employee to be accompanied, decide on appropriate action and provide an opportunity to appeal. Any simplified version could be misleading, because small employers would still have to comply with these underlying legal requirements.
The obvious alternative would be to exempt small employers from the regime altogether, but the Government appears to have gone cold on the idea of introducing no-fault dismissal for them. Probably wisely, as that would create a two-tier workforce with rights dependent on the size of your employer. Other models, such as the Australian code for small businesses highlighted in the BIS call for evidence, provide little help because the Australian regime focuses far less explicitly on the procedure followed by the employer in implementing dismissal.
On close examination, there is already significant flexibility in both unfair dismissal law and the current Acas Code. Perhaps the Government could do more to publicise this rather than seeking to create confusing new standards for businesses to get their heads around.