As readers will be aware, the statutory disciplinary and grievance procedures came into force on 1 October 2004 in accordance with the Employment Act (Dispute Resolution) Regulations 2004 (“the Regulations”). Much has been made in the press of both the need for more comprehensive employment contracts and handbooks, and the possibility of pay awards increasing by as much as 50% if employers fail to follow the minimum requirements. However, much less attention was paid to the fact that aggrieved employees are also now likely to have additional time in which to submit a tribunal claim against their former employer.
The new statutory disciplinary and dismissal procedures will apply to almost all disciplinary and dismissal scenarios and will set a minimum standard whenever an employer contemplates dismissing or taking disciplinary action against an employee. The procedure will be followed not only in conduct and performance situations but will also be relevant in other circumstances, such as redundancy, retirement or the expiry of a fixed-term contract. Similarly, the statutory grievance procedures set a minimum standard where an employee wishes to complain about action which his employer has taken or is contemplating taking against him which could form the basis of a tribunal complaint.
There are restrictions, or limitation periods, in place which prevent employees for bringing claims against their employers after a certain amount of time. The length of the limitation period, and the date on which the limitation period begins, varies according to the particular statutory provision relied upon by the employee. For example, where there is a straightforward dismissal of an employee, any complaint of unfair dismissal must be presented to a tribunal before the end of the period of three months beginning on the effective date of termination. Claims for redundancy payments or equal pay carry a six month limitation period which usually runs from the date of dismissal.
The Regulations provide that in certain circumstances the time limit for bringing a complaint to the employment tribunal is automatically extended for a further three month period. Such an extension runs from the day after the day the normal time limit would have expired. Accordingly, an employee may have six months in which to present a complaint of unfair dismissal, and nine months to bring a claim for statutory redundancy payment. The Regulations are intended to give the parties more time in which to negotiate a settlement and to encourage them not to take the matter straight to tribunal.
The type of dispute resolution procedure followed by the parties will determine how and when the limitation period can be extended.
Dismissal and disciplinary procedures
Where the parties have followed a disciplinary and dismissal procedure, the following criteria must be met in order for the limitation period to be extended by the Regulations:
• the statutory dismissal and disciplinary procedures must be applicable;
• the employee must reasonably believe at the time of the original time limit expiring that a dismissal or disciplinary procedure is being followed by the employer; and
• the employee must present the complaint after the expiry of the original time limit.
The statutory disciplinary and dismissal procedure will generally apply where an employer contemplates dismissing or taking relevant disciplinary action (as defined in the Regulations) against an employee. However, there are certain exceptions where the procedures will not apply (such as: collective redundancies; where the employer’s business suddenly ceases to function because of an unforeseen event; or where it is not practicable to commence or continue with the procedure within a reasonable period). Where the procedures are not applicable, the Regulations will not extend the original limitation period.
Whilst it is necessary for the statutory procedure to be applicable, and for the employee to reasonably believe that the appeals process is ongoing, it is not necessary for the employer to be following the statutory procedure: where the employer follows a procedure which goes beyond the statutory requirements (for example, by having several levels of appeal) the limitation period will still be extended providing all the criteria are met. Therefore, the limitation period for bringing your average unfair dismissal claim will be six months of the effective date of dismissal where the employee reasonably believes that an appeal process is ongoing at the end of the original three month limitation period. It is recommended that employers make it clear in open correspondence to the employee when the process has finished in order to limit the chances of the employee successfully arguing that they have a reasonable belief that the process is ongoing.
In order to encourage the use of the statutory grievance procedure, the limitation periods will also be extended in certain circumstances where the statutory grievance procedures apply (see schedule 4 of the Employment Rights Act 2002). If the claim falls into one of the exceptions where no statutory grievance procedure is applicable (for example because it is not reasonable practicable to send a stage 1 grievance letter within a reasonable period of time) there can be no extension of time.
The normal time limit will be automatically extended by three months where the statutory grievance procedure applies and any of the following criteria are met:
• The employee has submitted a claim within the original time limit but the claim is inadmissible because the employee has not waited 28 days from presenting the stage 1 grievance letter;
• The employee has submitted a claim within the original time limit but the claim is inadmissible because the employee has failed to lodge a grievance; or
• The employee has submitted a stage 1 grievance letter to the employer within the normal time limit.
Therefore, most types of tribunal claims will have the three month limitation period automatically extended to six months.
It should be noted that where the statutory grievance procedures apply yet the stage 1 grievance letter is sent over one month after the expiry of the normal limitation period, the employee is barred from presenting a complaint to the tribunal. Also, employees cannot issue proceedings until they have instigated an internal grievance and waited a minimum of 28 days.
There are a number of steps which employers can take to reduce their exposure.
• Make sure that you have grievance, disciplinary and dismissal procedures in place which meet the minimum requirements of the statutory procedures. The procedures must be set out in either each employee’s written statement of terms and conditions or in a staff handbook which is referred to in the terms and conditions. The employment tribunal can, in certain circumstances, make an award of two or four week’s pay (capped at £270 per week) where an employer has failed to comply with this requirement.
• Follow the procedure carefully. If an employer fails to follow the procedure or does not meet the minimum requirements of the Regulations, the employee’s dismissal may be automatically unfair (if the employee has the qualifying service of one year). The employment tribunal also has the power to increase a compensatory award made to an employee where the employer has failed to follow the statutory procedure by between 10% to 50%.
• Notify the employee as soon as the appeals process has finished. Keep a record of this information.
• Maintain an accurate record of all meetings and keep copies of all grievances and letters sent and received. In particular, you should ensure that the matters complained of; your response; any action taken; the reasons for taking such action; the appeal; and the date the decision is signed off are all accurately recorded