Workplace conflict in the UK costs an estimated £28.5 billion per year overall - an average of around £1,000 for every UK worker. A significant proportion of this comes from the cost of running disciplinary and grievance procedures, estimated at £2.36 billion per year. These figures underline the scale of the problem and the pressing need for more effective, earlier intervention.

When the Acas Code of Practice on Disciplinary and Grievance Procedures was launched in 2009, the aim was to replace rigid, statutory procedures with a flexible, principles-based approach to resolving workplace disputes. A strong emphasis of the Code was on an employer’s ability to use internal procedures to resolve disputes, with the hope of avoiding escalation to formal litigation.

Now, with consultation open on the new, significantly revamped Code, the landscape is changing again and we have written about what’s proposed – and not proposed – in detail here. For many employers and their HR teams, the shift towards informal resolution and mediation represents a significant opportunity to reduce cost, preserve working relationships, and achieve better outcomes for all parties.

Formalising the informal

Under the current Code, informal resolution of workplace issues has largely sat outside the formal statutory framework. While Acas has long encouraged informal approaches as a matter of good practice, the Code itself has been structured around formal disciplinary and grievance procedures. This has often been interpreted as requiring parties to move directly to a formal process in order to demonstrate compliance.

The revised Code will change this by expressly embedding informal resolution as a legitimate, recognised first step within the statutory framework. This means that informal resolution will form part of what employment tribunals have regard to when assessing compliance, and the 25 per cent uplift or reduction in compensation (under the existing Acas Code uplift/reduction regime) can attach to a party’s unreasonable failure to engage with it.

The message is clear: attempting informal resolution where appropriate is no longer merely best practice - it is part of the statutory expectation.

Employer and employee concerns

There is a subtle but deliberate shift in the language used in the Code; a move from the more adversarial terminology of “disciplinary issues” or “allegations” to the softer phrase, “employee or employer concerns”. Significantly, too, the expectation applies to both employee and employer concerns, with a clear statement for each that they are “usually best dealt with informally.” There is an express provision in the revised Code that, once the employer has established the facts, they should consider whether some issues can be resolved through mediation or a facilitated conversation. Whilst this is not much of a surprise for employee concerns – Acas has long advocated for the use of informal resolution where possible in place of grievances – the inclusion of employer concerns will require some further thought. The proposal is that early misconduct concerns will move into a core, statutory part of the Code. There is no definition of what behaviours this includes but the upper limit is clear – the early informal approach is not appropriate for gross misconduct, which must go straight to formal procedures.

The revised Code also recommends that the letter inviting an employee to a disciplinary or grievance meeting should expressly state what steps have already been taken to attempt informal resolution, or the reason why none were taken. This is a significant move towards transparency and demonstrates a clear expectation that informal resolution will be the default starting point, not an afterthought. What remains to be seen is how employers will be able to demonstrate consistency when applying the informal steps to the examples of misconduct.

That said, for employers who have previously been worried about being seen as not taking a concern seriously unless they escalated immediately to a formal process, this shift offers real reassurance. Formal procedures remain appropriate for serious employment issues, but the “informal first” message opens the door to greater use of workplace mediation - which, to date, remains significantly under-used.

Mediation and facilitated conversations

For the first time, the Code includes express provisions on the use of mediation and facilitated conversations “at any stage in a process or afterwards.” These are treated as good practice (though not compulsory) in appropriate cases - and are particularly relevant to breakdowns in working relationships, where mediation can offer significantly better resolution outcomes than a formal grievance. Of course, there are times when a formal process is necessary. The Code is clear that in some situations, mediation will not be possible, such as where someone else needs to make a decision about the dispute, or where there is a significant power imbalance between the parties. But the overriding message is that employers should be making use of these informal solutions either to avoid formal processes being necessary or to prevent conflict from escalating into litigation.

Where mediation is possible, it would pause any formal disciplinary or grievance procedure, enabling the parties to explore informal resolution options with a neutral third party in a confidential setting. This is a significant step and one which we believe will do two things: firstly increase the likelihood of an employee agreeing to a mediation or facilitated conversation in the first place; and secondly reduce the chances of that formal process needing to be re-initiated. On average 70-80% of mediations lead to a successful outcome – a real resolution, where both parties feel heard and relationships are repaired.

Mediation skills gap – the power of your managers

Acas research has found that 33 per cent of organisations do not have the necessary skills within the business to conduct facilitated conversations or mediations. Often HR is left to bridge this gap, but this overlooks the significant role that managers play, both in identifying conflict early and in taking responsibility for trying to resolve it themselves.

The relationship that a manager has with their team directly influences that team’s ability to work together, drawing on everyone’s strengths. Where a manager fails to address performance or relationship concerns early, conflict becomes more likely. A manager who avoids the “difficult” conversation further widens the dispute, often leaving an employee with no option but to raise a formal grievance or resign. In a grievance procedure, there are no real winners.

By contrast, a manager with the skills and confidence to give constructive feedback, or to have a conversation when a disagreement first emerges, has the power to stop a concern or dispute escalating into an entrenched battle ground.

There is a natural alignment between the revised Code’s focus on informal resolution and the wider message to managers about the Employment Rights Act (ERA) obligations to manage performance effectively and engage with teams about workplace behaviours. The two go hand in hand: upskilling managers in having these conversations, dealing with conflict early, and embracing facilitated conversations or mediation where an impartial third-party is needed to help the parties find the solution together.

In a world where it is easy to ask an AI agent how to raise a grievance, complaint, or claim, there is real power in a genuine conversation and the chance to rebuild a working relationship that has gone off track.

How we can help

We are working with clients to prepare for these changes. Our client training team provides a range of training solutions to help businesses upskill their people—not just to be “ERA ready” but to create an environment where conflict is resolved through perspective-sharing and honest dialogue.

We have introduced our “Solutions Pathway” for this purpose, giving organisations a better way of dealing with conflict. This provides tools for employees, managers, and HR teams to enable them to effectively deal with conflict internally and prevent escalation. It is a way to revolutionise the informal stage of your grievance procedure and enhance your culture where conflict creates the least harm possible for your people. Often it is the fear of the unknown that stops employees from agreeing to mediate. We can help to embed the concept into your organisation so that employees and managers understand what is involved and why it is in their best interests to participate. We also have a range of both inhouse and external consultant accredited mediators ready to support you with informal resolution initiatives.

For more information, please contact Lucy Hendley, Workplace Mediator and Director of Client Training, or your usual contact.