Discipline

The principles

In England and Wales, most employers are likely to have a non-contractual disciplinary procedure which they will be expected to follow when disciplining an employee. In addition, ACAS (the Advisory, Conciliation and Arbitration Service) has produced a statutory Code of Practice on Disciplinary and Grievance Procedures (ACAS Code) and a supporting non-statutory guide, Discipline and grievances at work, which set out the general principles of fairness that apply when disciplining an employee.

Failure to follow any part of the ACAS Code does not of itself make an employer liable to proceedings. However, employment tribunals must take the ACAS Code into account, where relevant, when considering whether an employer has acted reasonably or not in an unfair dismissal claim. Furthermore, if the employee wins an unfair dismissal case (or certain other types of case), the tribunal can adjust the amount of compensation by up to 25% either way, if either the employer or employee has unreasonably failed to comply with the ACAS Code.

In the regulated sector, if an employer takes disciplinary action against an employee, this can trigger obligations to:

• consider the individual’s fitness and propriety;
• notify the relevant regulator(s) (the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA));
• make (or consider) adjustments to compensation; and
• make reference to the disciplinary action in references given.

Recent developments

• The SMCR now applies to FCA solo regulated firms. Further details are available on our SMCR Extension Feature, we also offer an SMCR Solution and SMCR Toolkit.

• In the case of Dronsfield v The University of Reading (2019), the Employment Appeal Tribunal (EAT) held that it is fair to remove evaluative opinions from an investigatory report and that these reports should be limited to factual findings and whether there was a prima facie case to answer. The EAT was also surprised by who was responsible for collating the joint report in this case. Best practice would be to assign this duty to an independent investigating officer. Another takeaway was the importance of abiding by your own internal rules and regulations – and to clarify these so that investigating officers know their responsibilities and can correctly carry out the process of investigation.

• In the case of Casamitjana v League Against Cruel Sports (2019) the Court ruled that ethical veganism is a protected characteristic under the Equality Act 2010 as a philosophical belief. This is not binding on other Tribunals, and the respondents were willing to concede this issue so it will not appear before a higher court.

• In Phoenix House Ltd v Stockman (2019) the EAT looked into the treatment of employees who had covertly recorded meetings within dispute situations. The outcome was that the treatment of such employees depended on the purpose of making the recording, and the circumstance in which the recording was made. Parties should continue to advise each other when a recording is made, generally failure to do this will denote misconduct.

• In the case of BC v Chief Constable Police Service of Scotland (2019), it was found that using WhatsApp messages to bring misconduct proceedings against police offers was not unlawful, nor a breach of privacy rights.

• In North West Anglia NHS Foundation Trust V Gregg (2019) the Court of Appeal, found that if a contract does not address the issue of pay during an interim suspension, as a default position, pay should not be deducted from the employee. The trust in this case was permitted to commence a disciplinary procedure whilst a police investigation was simultaneously taking place, as it was not proven that the investigation would cause a miscarriage of justice.

• In Mayor and Burgesses of the London Borough of Lambeth v Agoreyo (2019) the Court of Appeal allowed the appeal and restored the County Court judgment that suspension of a teacher in advance of a misconduct investigation, was not found to be a repudiatory breach of the implied terms of trust and confidence.

Practical tips in an investigation

• Legal, Compliance, HR and investigators should work together, from an early stage of any investigation, and consider how to manage regulatory and employment expectations. For example, in a regulated context, parts of an investigation might be conducted under privilege. If so it's important to be mindful how claims of privilege will need to be squared with the provision of information about allegations to an employee during a disciplinary process; for example, the disclosure of witness interview notes to an employee.

• Similarly, Compliance and HR should ensure that the compliance outcome and the employment outcome are consistent. For example, it will not be helpful to an organisation if regulators have been given one indication as to what might happen to employees and this is not the result of the subsequent disciplinary process.

• The investigating officer must be aware that an investigation report should be a product of their own investigation and that third-party (non-legal) comments should be limited to factual findings. These contributions can be considered but cannot form the material of the evaluative opinion. Otherwise, this can disrupt the fairness of the disciplinary process and a claim can arise.

• In the regulated sector, where an allegation potentially relates to an individual’s fitness and propriety, consider who will make the determination on fitness and propriety and how this will fit into the disciplinary process.

• Finally, in the regulated sector, when considering disciplinary action, consider whether this affects the individual’s fitness and propriety, triggers notification requirements, has remuneration implications or needs to be recorded and included in future references given.

International perspective

Employment and labour laws significantly vary across different jurisdictions. Local legal advice should be obtained when handling disciplinary action overseas as inadvertent breaches of employee rights can result in serious reputational, as well as financial, damage to employers.