Statutory Discipline and Dismissal Procedures

by Hazel Phillips

When the Statutory Dismissal and Disciplinary Procedures (DDP) came into force on 1 October 2004, they represented the most significant change in the handling of disciplinary matters since the introduction of the concept of unfair dismissal in 1971.  As the Government starts its review of these procedures, it seems that many employers are still unclear as to what exactly is required of them.

The legislation sets a new minimum standard to follow when dealing with disciplinary action or dismissal situations including both a standard procedure and a modified procedure. These statutory procedures are implied into all contracts of employment and must be followed whenever dismissal or disciplinary action is contemplated. Although the DDP does not have to be followed for warnings or paid suspension, it does need to be used whenever the employer is considering demotion, transfer to a new role or dismissal even on non-disciplinary grounds; for example, ill health, poor performance, individual redundancy and expiry of fixed term contracts.

Those employers who have chosen to implement or maintain contractual dismissal and disciplinary procedures involving more than this statutory procedure should take note of the decision in Masterfoods Ltd v Wilson.  Mr Wilson failed to submit his grounds of appeal in writing as required by Masterfoods Ltd dismissal procedure.  They therefore refused to allow him to appeal.  As the DDP does not require notification of the wish to appeal to be in any particular form, Masterfoods Ltd’s refusal to allow the appeal on those grounds was found to be unlawful. 

The importance of getting the DDP right cannot be underestimated.  Failure by an employer to comply means that a dismissal will be automatically unfair.  No matter how grave an employee’s misconduct nor how certain the employer might be of the employee’s guilt (for example, even when an employee is caught “red-handed” stealing from their employer) an employee who is dismissed without the DDP having been followed will succeed in a complaint of unfair dismissal.  Even if the employer can show that the traditional grounds for a fair dismissal have been met (ie that there was a fair reason to dismiss and that the employer had acted reasonably), recent judgments have shown that there is no need to consider this when the dismissal is automatically unfair because of a failure to follow the DDP.

Although the recent case of Scott-Davies v Redgate Medical Services has confirmed that the procedure does not necessarily need to be followed for employees with less than 1 year’s service, this is a risky option for employers.  The Scott-Davies case confirms that there is no free standing claim for failure to follow the DDP, but if an employee was to be able to bring a successful claim for something else (for example, sex or disability discrimination or failure to pay outstanding holiday pay) then their lack of service will be irrelevant and any award made will be uplifted by between 10% and 50%.

In addition to which, employers should remember that it does not necessarily follow that merely by complying with the DDP, the dismissal will be fair.  To establish a fair dismissal, the employer must not only comply with the DDP but must also be able to show that there was a potentially fair statutory reason for the dismissal and that the actions taken in relation to that dismissal were reasonable in the circumstances.

Standard DDP

The three steps which must be followed under the standard procedure are:

1. The employer must write to the employee setting out the nature of the employee’s misconduct or the circumstances which have led the employer to contemplate dismissing the employee or taking disciplinary action.

2. Having allowed the employee a reasonable opportunity to consider his or her response to that statement, the employer must invite the employee to a meeting to discuss the matter. The employee has the right to be accompanied to that meeting by a fellow worker or trade union representative. After the meeting, the employer must inform the employee of the decision in writing and of the employee’s right to appeal.

3. If the employee wishes to appeal, the employer must invite the employee to a further meeting, which should be heard by a more senior manager if possible.  After the meeting the employer must inform the employee of the final decision in writing.
Recent case law has focused on the content of the so called ‘step one letter’. In Draper v Mears Ltd the EAT found that a Step 1 letter needed to do no more than set out in broad terms the general nature of the employee’s alleged misconduct.  The tribunal found that where the wording of such letters was ambiguous, the tribunal was entitled to consider the whole context including whether the employee knew what the allegations were.

Modified DDP

This procedure should only be followed where the employer has already dismissed the employee in a situation where it is reasonable to do so without notice and without investigating the circumstances.  In practice, it is dangerous to rely on the modified procedure because if the employer is shown to be wrong, the dismissal will be automatically unfair.  Our advice is never to rely upon it and we have therefore chosen not to cover it.  If it is something that you wish to use, you should always seek legal advice first.

Although one of the original aims of these procedures was to reduce claims, there has been no noticeable drop in the numbers.  In fact, the only result has seemed to be that the process of dismissing an employee has become more bureaucratic and confusing.  We can only hope that the Government’s review of the procedures and their impact will lead to fundamental changes but in the meantime, all employers must continue to be aware of the impact of the DDP and ensure that they follow it in all relevant circumstances.

Hazel Phillips is an employment law solicitor at Burnetts, Carlisle. For further information on dismissal and discipline, contact Hazel on 01228 552222.

Mar 2007