This month, Leeanne Armstrong continues the handbook series with a look at one of the key parts of the employee handbook – Disciplinary Rules and Procedures.

Leeanne reminds us that beyond providing the basic legal minimum, the creation of a comprehensive disciplinary procedure can also prove invaluable to employers managing misconduct and dealing with challenges to sanctions by employees. This article sets out the fundamental elements of the disciplinary rules and procedures, taking into account the requirement to comply with the statutory three-step dismissal and disciplinary procedures (the "Statutory Procedures") that remain in force in Northern Ireland.

This month’s feature includes a downloadable template letter of suspension.

The Employment Rights (Northern Ireland) Order 1996 details what employers must include in an employee's statement of particulars of employment. Amongst the various requirements is information regarding the organisation's disciplinary rules and procedures, or details of where the employee can find that information.

Beyond providing the basic legal minimum, the creation of a comprehensive disciplinary procedure can also prove invaluable to employers managing misconduct and dealing with challenges to sanctions by employees.

In this month's feature, we set out the fundamental elements of the disciplinary rules and procedures, taking into account the requirement to comply with the statutory three-step dismissal and disciplinary procedures (the "Statutory Procedures") that remain in force in Northern Ireland. Of course, it is important to stress that, as with all company procedures, you should draft a policy that reflects and is aligned with the structure of your business and its ethos and values, to ensure that it reflects the standards expected within the organisation.

Consider who the disciplinary rules will apply to

First and foremost, you should consider and specify to whom and to what extent the disciplinary procedures will apply. Commonly, disciplinary procedures will apply to employees only, as it is they who will have legal rights to claim unfair dismissal.

However, if your organisation uses agency workers, consultants or sub-contractors, you should consider to what extent you may be required to conduct your own internal investigation or indeed assist or facilitate the completion of a disciplinary investigation by an external third party in the event of an allegation of misconduct.

Employers may also wish to have a degree of flexibility as to the application of the various stages of the disciplinary rules to employees in their probationary period. They may wish to have the ability to bypass the stages of warnings provided for under the disciplinary rules and instead be able to terminate the employment because of unsuitability at or before the end of the probationary period.

Caution should always be taken to comply, as a minimum, with the Statutory Procedures. Employees with more than one year's service will establish the right to bring an unfair dismissal claim regardless of whether or not they remain in a probationary period, and a failure to follow the Statutory Procedures will render that dismissal automatically unfair.

Even in circumstances where an employee is dismissed with less than one year's service, as is often the case with probationary period dismissals, a dismissal without due regard for the Statutory Procedures could still reflect unfavourably on an employer. This is particularly the case with discrimination claims and whistleblowing, which does not require a minimum level of service.

Suspension

The disciplinary rules should cover rules regarding suspension of an employee pending an investigation into allegations of misconduct. Suspension should not be used simply to keep an employee away from work pending the results of an investigation or disciplinary process. Unless there is good reason, the general rule is that an employee should continue to carry out their normal duties.

Suspension should only be used in limited circumstances and you will need to show reasonable genuine concern that, for example:

• the employee may interfere with an investigation;
• their continued presence may dissuade witnesses from giving evidence;
• there is substantial risk of further significant offences or harm to the employer; or
• the employee may be at risk.

If you decide suspension is necessary, you should be as discreet as possible as such action can damage an employee's reputation, even if an investigation results in no case or further action being taken. Any suspension should be on full pay and benefits. The removal of any company vehicle or access to a company computer or phone must be justified and not punitive.

Suspension should be as brief as possible to allow for investigation.  It can continue during disciplinary proceedings provided there are legitimate grounds to do so.

A template letter of suspension is included with this month's feature as a guide to the essential information that should be communicated to the employee on confirmation of their suspension.

Investigation

Carrying out a full and thorough investigation as quickly as is reasonably possible will be key to the integrity of the disciplinary process, and to the protection of the company in the event of a legal challenge to a dismissal or other sanction. The presence of an independent, fair and impartial investigation will also serve to promote employee confidence in management and the company's processes. No disciplinary action should be taken before an investigation has been completed.

When assessing the fairness of a dismissal the Industrial Tribunal will assess whether the employer carried out as much investigation as was reasonable. Employers are not expected to establish guilt beyond all reasonable doubt (i.e. a criminal standard). Instead, they must establish that there was, on balance, a reasonable belief in the employee's guilt when the decision to dismiss was taken.

The amount of investigation required will vary greatly depending on the allegations made. There is no 'one size fits all' investigation format that you can transpose into the disciplinary procedure or deliver to managers.

HR guidance for managers can often be vital during a disciplinary process. The role of HR is not to interfere with the outcome or findings of the investigation but to provide guidance on matters of process and law. In the case of Ramphal v Department for Transport UKEAT/0352/14, an employee's dismissal was determined to be unfair on the basis that the investigation that led to their dismissal had been significantly influenced by HR. On a practical note, it is therefore important to take care when reviewing investigation reports and recommendations that any changes you wish to make do not significantly alter the findings of the investigating manager.

Other factors that may impact on the extent of the investigation can include:

• whether or not there has been an admission of guilt;
• the severity of the allegations; and
• the extent to which other third parties or witnesses are involved and willing to co-operate with the investigation.

If witnesses are unwilling to provide statements unless their anonymity is protected, you should consider exploring the cause of their reluctance. The witness' right to anonymity should be balanced against the employee's right to a fair hearing, which includes the ability to see and respond to all evidence against them.

There is no legal requirement to have a separate investigating officer, and depending on the size and available resources in your organisation, it may be appropriate that the same manager completes the investigation and subsequent disciplinary process.

There is also no legal requirement to allow employees to be accompanied to investigation meetings but in some cases you may permit this and include provision for it in the disciplinary rules and procedures.

Provide examples of misconduct

Most importantly, employees should never be caught off guard. They should be aware of the standards expected and the types of conduct that will not be tolerated, through the provision of clear rules and training.

A set of clearly defined disciplinary rules containing comprehensive and tailored examples of the types of misconduct that may result in disciplinary action can help to prevent such misconduct from happening. It can also help the employer to use the rules effectively, to take appropriate action and/or encourage improvements in behaviour when required.

A clear but non exhaustive list of examples of misconduct that may result in disciplinary action can be beneficial. This should include common types of misconduct in any organisation, such as:

• insubordination;
• theft;
• assault; and
• damage to company reputation. 

The list should also be tailored to include specific examples of misconduct that are relevant to your business. For example:

• failure to comply with time recording procedures like clocking-in or completing time sheets – provided this is a genuine requirement in your organisation;
• horseplay – particularly in factory or warehouse-based businesses where such behaviour could result in serious injury; and
• improper use of employee discount cards – particularly in retail where incentives are often provided with strict rules on when, how and by whom they can be used.

Misconduct will commonly be divided into two broad categories: minor and major.

Cases of minor misconduct may be appropriately dealt with on an informal basis first and foremost, and thereafter through the issue of appropriate warnings or other sanctions that will remain live on an employee's record for a period of time.

Major or gross misconduct will relate to more serious matters that could result in immediate dismissal of an employee without notice. The Labour Relations Agency Code of Practice on Disciplinary and Grievance Procedures (LRA Code) refers to gross misconduct as an act that strikes at the very root or heart of the contract of employment so as to destroy the essential bond of trust and confidence between the parties to the contract.

In a case of unfair dismissal, the first thing an employer will be required to establish is that the reason or principal reason for the dismissal was one of the potentially fair reasons set out in article 130(2) of the Employment Rights (Northern Ireland) Order 1996. Conduct is one of these reasons. Whilst specifications of certain types of misconduct in the disciplinary rules will not de-facto determine fairness in an unfair dismissal case, it can provide valuable supportive evidence for the decision to dismiss and/or evidence that the employee was aware of the ramifications of such behaviour.

Disciplinary hearings

Your disciplinary rules should set out the process and format of a disciplinary hearing if, at the end of comprehensive investigation, it is determined that the employee has a case to answer.

Employees should be provided with a written invite to a disciplinary hearing that clearly sets out the alleged misconduct that has led the employer to consider taking disciplinary action. Where possible, the misconduct should be categorised by reference to the disciplinary rules. In the case of gross misconduct offences, employees should be clearly warned that if the allegations are upheld, they could be summarily dismissed.

Sufficient advance notice of the meeting should be provided along with copies of the evidence gathered during the investigation in order to allow the employee to adequately prepare.

In some cases, employees may request a postponement. Where there is a genuine reason for doing so – such as illness or the availability of the employee's chosen companion – it is often best practice to re-schedule the disciplinary hearing on at least one occasion. However, in certain circumstances where there have been repeated requests for postponements or the employee has failed to engage, and in the absence of a genuine or medically supported reason, it may be necessary to conduct the hearing in the employee's absence.

The disciplinary rules should specify who will ordinarily be assigned to conduct a disciplinary hearing. In some organisations, disciplinary panels may be constituted and this must be done in accordance with the rules, to preserve the integrity of the process.

It may be necessary to conduct further investigations after the hearing, before delivering an outcome.

Following conclusion of the disciplinary hearing, employees may be advised verbally of the outcome but in order to comply with the Statutory Procedures, the decision must be communicated in writing. The outcome letter should include a rationale for the decision taken. Where dismissal or a lesser sanction is issued, employees should also be clearly advised of their right to appeal the decision and provided with a clearly defined timeframe for doing so.

Disciplinary sanctions

Unless the conduct is serious enough to warrant dismissal for a first offence, employees should be given an opportunity to improve their behaviour through a series of warnings that will remain live on their record for a defined period of time. Your organisation's disciplinary rules should clearly set out the levels of warning that are operated, and specify how long the warning will remain on the employee's record. 

Where there is a live disciplinary warning on an employee's file, employers may take this into account when considering further disciplinary action but be cautious about seeking to rely on a warning that has expired. Reliance on an expired warning to issue a harsher sanction, such as a final written warning, could render employers in breach of the implied term of mutual trust and confidence or, in the case of dismissal, render the decision unfair.

There are no fixed rules as to the length of time a warning should remain on record, but the LRA Code suggests six months is reasonable for oral warnings, and a period of 12 months for written warnings. Except in cases of gross misconduct, there are no prescribed requirements as to the number of warnings to be given to an employee before moving to consider dismissal, but it is good practice to provide for at least two levels of warning in the disciplinary rules. In some organisations a verbal warning may be included as a formal disciplinary sanction. In others it may be treated as an informal step.

You may also wish to include other sanctions in your disciplinary rules, to act as alternatives to dismissal. These might include demotion, a pay freeze or reduction, loss of bonus or transfer to another department. If you are considering dismissal, it is important to be able to evidence that other alternatives were first considered. Providing for a number of alternative types of sanction can act as a useful guide to managers and employees as to the other available sanctions that may be considered. Caution should, however, be taken before exercising such alternatives, particularly where the disciplinary procedure is non-contractual and there is no other contractual basis to take such action, as this could result in a claim.

Appeal

This forms step three of the Statutory Procedures and should form a fundamental part of your organisation's disciplinary rules. If an employee requests it, an appeal hearing should be arranged without unreasonable delay. The appeal process does not need to be concluded before disciplinary action or dismissal takes effect. 

The appeal is an important aspect of the process and can serve to rectify procedural defects that may have otherwise impacted on the fairness of the process.

To help preserve the integrity of the process and avoid any allegations of bias, it is best practice to have the appeal conducted by someone in the business that is more senior than the disciplining manager, and who hasn't had any prior involvement in the process. The appeal manager should fully consider the employee's grounds of appeal and conduct further investigation as may be necessary.

Upon conclusion, the employee must be informed of the decision in writing. The decision on appeal will usually be final unless any further right of appeal or review is permitted under the disciplinary rules. If an appeal against dismissal is upheld, employees will need to be re-instated with no loss of continuity of employment or pay.

Right to be accompanied

With the exception of the initial investigation meeting(s), workers (bearing in mind that the right to be accompanied extends to the broader category of worker as defined under the Employment Rights (Northern Ireland) Order 1996) have a legal right to be accompanied to disciplinary and appeal meetings by a colleague or trade union representative. This entitlement should therefore be specified both in the disciplinary rules and in each written invitation to a hearing during the disciplinary process.

The right to be accompanied applies only if reasonably requested by a worker, but there is no specific legislative guidance on what constitutes a reasonable request. However, in the case of Toal and another v GB Oils Ltd [2013] IRLR 696, the Employment Appeals Tribunal held that the choice of companion is absolute and an employer cannot deny a worker their chosen companion provided they are a fellow worker or trade union representative.

In some instances, the disciplinary rules may provide specific categories of individual who will not be permitted to accompany employees to disciplinary hearings, such as family members. However, in light of Toal, careful consideration should be given before refusing an employee their choice of companion. The LRA Code states that a companion will not be reasonable where it is likely to prejudice the process or present a conflict of interest.

The legal right to be accompanied does not extend to qualified legal representatives. However, there may be instances where this is appropriate, for example because it is permitted under the contract of employment or the outcome of the disciplinary process could have a bearing on the decision of a regulatory body, such as to remove or suspend an individual from professional practice.