How to Conduct Disciplinary Procedures under UK Labour Law: Employer Obligations

BASE (basic) 5.22

advertisement

Миколаєнко Олена Василівна

Attorney

United Kingdom / England

i

Reading time: 11 minutes Total views: 18

Rate:

0

Publication date: 16.09.2025

Disciplinary procedures in the UK are a critical component of UK labour law, enabling employers to address performance or behaviour issues while upholding employee rights and employer obligations. Properly conducting these procedures, considering legal work status, prevents unfair dismissals and costly legal claims. This article provides a detailed guide on disciplinary steps, covering probation period, National Insurance, working hours, and minimum wage. Legal Marketplace Consultant offers employment advice to create a clear action plan, review employment contract, and ensure compliance with UK regulations.

Under the ACAS Code of Practice on Disciplinary and Grievance Procedures (updated 2025), disciplinary procedures must be fair, transparent, and proportionate, particularly for employees. For workers or self-employment, procedures are less formal, but employer obligations for fairness remain essential. For instance, in cases of misconduct, such as absenteeism or gross misconduct (e.g., theft, violence), a thorough investigation, disciplinary meeting, and written decision with appeal right are required. The Employment Rights Bill 2025 introduces day-one rights against unfair dismissal, but for probation period (3–6 months), a simplified "lighter-touch" process applies from 2025, easing employer actions.

Employee rights include the right to be accompanied at disciplinary meetings (by a colleague or union rep) and to receive evidence in advance. Employers must provide written reasons for the procedure to avoid unfairness claims. A job offer with a clear disciplinary policy is a vital part of the employment contract, helping prevent disputes. National Insurance and PAYE do not directly impact the procedure, but upon dismissal post-procedure, these are withheld until the end of notice period, which depends on working hours and service length (1 week per year, max 12 weeks).

Main Reasons for Disciplinary Procedure

• Misconduct: Breaches like absenteeism, safety violations, or gross misconduct (e.g., theft), leading to warnings or dismissal.
• Poor Performance: Low productivity requiring a capability procedure with improvement plans and support.
• Breach of Contract: Failure to comply with employment contract terms, e.g., confidentiality or working hours.
• Absence Issues: Prolonged illness or unauthorised absences, requiring medical evidence and return-to-work interviews.

Employers must consider legal work status (employee, worker, self-employment), as it affects procedure and employee rights. For workers on zero-hours contracts, disciplinary procedures are simpler, but rights to fair hearing and minimum wage (£12.21/hr from April 2025) apply. For self-employment, job offer typically excludes formal employee rights, but clients must adhere to agreement terms.

Steps for Conducting Disciplinary Procedure

1. Initial Investigation: Collect facts, interview witnesses, review records (e.g., absence or performance data), and check employment contract to assess the issue.
2. Written Notification: Send an invitation to disciplinary meeting detailing the issue, evidence, and right to accompany.
3. Disciplinary Meeting: Hold a formal meeting where the employee can respond; ensure the meeting is recorded for documentation.
4. Decision: Provide a written decision with outcome (first or final warning, dismissal) and right to appeal.
5. Appeal: Arrange an appeal meeting with an independent manager; review the decision and confirm the final outcome.
6. Record Keeping: Retain all records (letters, minutes) for 6 years for potential tribunal claims, including PAYE and National Insurance in payroll.

Employment advice from Consultant helps tailor procedures for self-employment, where job offer lacks full employee rights. 

Risks and How to Mitigate Them

Improper disciplinary procedures can lead to severe consequences, such as Employment Tribunal claims. In 2025, approximately 80% of tribunal claims involve unfair dismissal due to ACAS Code violations, costing employers up to £115,115 in compensation. From 2027, day-one rights will increase claims, especially post-probation period, making employer obligations under ACAS Code critical. Failure to provide evidence or allow a companion can lead to discrimination or unfair dismissal claims.

• Financial Risks: Compensation for unfair dismissal or discrimination can reach £115,115, plus legal costs (£5,000–£20,000).
• Reputational Damage: Negative employee reviews can harm the company’s brand, especially in competitive industries.
• Operational Issues: Poor procedures may demotivate staff or complicate hiring new talent.

Employment advice from Consultant helps verify legal work status, adapt employment contract, and ensure fair procedure. For employees on fixed-term contracts, disciplinary procedures are formal, while for workers on zero-hours contracts, they are simplified, but employee rights to fair hearing and rest breaks (6+ hours worked) remain. For self-employment, job offer typically excludes disciplinary procedures, but breaches of agreement may lead to termination.

Practical Aspects and Examples

Disciplinary procedures vary by issue type. For absenteeism, an informal discussion may suffice for minor cases, but gross misconduct (e.g., workplace theft) requires immediate investigation and possible suspension with full pay, including minimum wage (£12.21/hr). For poor performance, capability procedure involves assessing performance, setting SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound), and offering support like training or mentoring.

Case law underscores fair procedure importance. This highlights the need for ACAS Code compliance and seeking employment advice from Consultant to avoid such errors.

Employers must account for National Insurance and PAYE during suspension or notice period. For example, an employee with 5 years’ service is entitled to 5 weeks’ notice, during which NI is withheld via PAYE. For redundancy post-disciplinary, employees with 2+ years’ service may claim redundancy pay (1.5 weeks’ pay per year after age 40).

Questions and Answers

Tips for Employers

Review Employment Contract: Ensure disciplinary policy is clear, especially for probation period with "lighter-touch" 2025.
 

Adhere to Dismissal Rules: Follow ACAS Code to avoid unfair dismissal claims.
 

Seek Employment Advice: Contact Consultant for guidance on tailoring procedures to UK labour law.
 

Ensure Proper Payments: Include PAYE, National Insurance, and minimum wage in calculations during suspension or notice.