Disciplinary and Capability Procedure

What is a Disciplinary and Capability Procedure?

A disciplinary and capability procedure explains what standards of performance and conduct are expected by the company and what will happen if an employee’s performance or conduct falls short of those standards (for example if an employee is not performing, or if allegations of misconduct are raised against an employee). The procedure with respect to underperformance (as opposed to misconduct) is also often known as a PIP or “performance improvement plan”. Such a procedure must comply with certain minimum standards, which are set out in the Acas Code of Practice on Disciplinary and Grievance Procedures. 

Why is a Disciplinary and Capability Procedure important?

The Acas Code of Practice on Disciplinary and Grievance Procedures contains recommendations for the handling of disciplinary situations at work. It is accompanied by a non-statutory Acas guide, which provides guidance on best practice. Where an employer unreasonably fails to follow the Acas Code of Practice on Disciplinary and Grievance Procedures, any compensation awarded to an employee in an Employment Tribunal may be increased by up to 25%, therefore having (and following) a legally compliant disciplinary and capability procedure will reduce or eliminate this risk.

In addition, employees and workers have the right to be accompanied at disciplinary hearings by a fellow worker or a trade union representative. Staff should be informed of this right.

Employers also have a duty under s1 Employment Rights Act 1996 to give the employee a written statement at the start of the employment setting out the key terms of their employment. Usually the employer does this by providing an employment contract. It must include certain details about the company’s disciplinary procedure (including who appeals should be sent to).

Finally, employees need to know what to expect and managers need to know what they must do in situations of poor performance or misconduct. Having a robust and detailed procedure means that managers can follow it, knowing that they are complying with basic legal requirements. 

What are the common pitfalls of a Disciplinary and Capability Procedure?

1. Not having a Disciplinary and Capability Procedure
   Without a disciplinary and capability procedure, the company may not be complying with section 1 of the Employment Rights Act 1996, which could lead to financial penalties in the Employment Tribunal. It may also then not be following the legal requirements of the Acas Code when taking disciplinary action (up to and including dismissal), leading to potential compensation being awarded to the employee in an Employment Tribunal.
   
   
   

2. Having a contractual Disciplinary and Capability Procedure
   The employment contract contains the terms and conditions that govern an employee’s employment. Generally, changes cannot be made to it without the consent of both parties.
   
   Normally an employer will want to make changes to its policies and procedures regularly, and in certain situations (particularly where there is a disciplinary or performance issue) may not want to be tied to following them to the letter. For these reasons, it is usually advisable for the disciplinary and capability procedure to be non-contractual, so that it does not form part of the employment contract and changes can be made. Otherwise, it will need to obtain staff agreement to any changes, however small.
   
   The disciplinary and capability procedure should therefore clearly state that it is not contractual i.e. that it does not form part of the employment contract.
   
   
   

3. Including too much legalese and detail
   The best disciplinary and capability procedures are clear, concise and easy to navigate and understand. Procedures that are long, unwieldy and full of jargon are unlikely to be used or understood.
   
   
   

4. Not giving employees a copy of the Disciplinary and Capability Procedure
   The disciplinary and capability procedure should ideally be given to the employee on the first day of employment, and it should be stored in a readily accessible location (e.g. the company intranet). Employees should also be informed when the disciplinary and capability procedure has been updated.
   
   
   

5. Not keeping the Disciplinary and Capability Procedure up to date
   Employment law in the UK changes frequently. Using a PocketLaw template, and regularly reviewing the finished procedure, ensures that an employer remains legally compliant when changes to the law happen.

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