Much criticised dispute resolution procedures are repealed

The statutory dismissal and disciplinary procedures, which have been heavily criticised by employers since they were introduced five years ago, have now been repealed.

They have been replaced by a new framework based on the provisions of the Employment Act 2008. Employers should now follow the guidelines in the new ACAS Code of Practice on discipline and grievance, effective from 6 th April.

One of the main aims of the changes is to provide both employers and employees with greater flexibility. The mandatory three step process of letter, meeting and then right of appeal no longer applies. Instead, the ACAS code sets out the principles that employers and employees should apply to achieve a reasonable standard of behaviour.

Many employers will be relieved to hear that the dismissal of an employee will no longer be considered automatically unfair if there is a breach of procedure.

Instead, a tribunal will consider whether a failure to follow the code was unreasonable taking all the circumstances into account, such as the size of the business. A tribunal will still be able to rule that a dismissal was unfair for procedural reasons but it will also be able to adjust the level of compensation if it considers that the procedural failings had no material impact on the outcome.

Tribunals will also have the power to adjust awards by 25% if either side has failed to act reasonably or failed to comply with the code of practice.

Tribunals will also be able to award compensation for financial loss in certain cases, for example, where an employee is making a claim in relation to deductions from wages or redundancy payments.

Whether the changes bring the expected benefits remains to be seen but in the short term there is a danger that they may cause some confusion. Employers may wish to revise their codes of practice and they should certainly seek legal advice before taking any action in relation to their employees.