It is important that employee performance is carefully monitored to ensure that your workforce remain productive, and their quality of work remains high. However, make sure your disciplinary policies are fit for purpose so that you don’t have disgruntled employees pursuing unfair dismissal claims or even claims for discrimination.
Here we’ll be covering:
- Employee performance or conduct issues
- Tips on employee performance management
- Writing a disciplinary procedure and designing employment policies
- How to conduct a disciplinary investigation into employee performance
- Potential actions and outcomes
- Appeals and further action
Employee performance or conduct issues
Poor performance may mean an employee is not reaching the standards expected or not reaching specific targets or benchmarks set by your business. Conduct issues on the other hand, might include where an employee is not punctual or otherwise does not keep to their hours of work, if the employee discloses the business’ confidential information, does not comply with the terms of their contract, reasonable instructions of managers or company policies (such as health and safety, sickness absence or information and communication policies), or if an employee is offensive, negligent or deemed not to be acting in good faith relating to their employment.
More serious conduct issues, which might result in summary dismissal for gross misconduct might include:
- Theft or fraud by the employee
- Physical violence
- Deliberate and serious damage to or misuse of property
- Serious or repeated failure to follow management instructions or bringing your business and personnel into disrepute
- Unlawful discrimination or harassment
- Serious negligence
- Serious breach of health and safety rules
- Taking a bribe
- Giving false information about qualifications or entitlement to work (including entitlement to work in the UK)
Tips on employee performance management
There are a number of things that you can do as an employer to manage the performance of your employees. Employees need to be clear on exactly what their role is, how they should perform it and what, if any, benchmarks should be met.
A detailed job description and induction at the beginning of an employee’s employment can help you and your employees with making roles clear. If there is clarity about exactly what is expected from an employee from the start and the employee has the opportunity to ask for further clarification where they may need this, creates a strong foundation for future employee performance than where any employee is unclear about your expectations of them.
Where employees are starting a new role, it is advisable that there is a probation period and that this is used to really see if the employee is capable of performing the role to the required standard. You should ensure that the probation period is long enough to be able to assess performance in the particular role being carried out and ideally as the employer you should also reserve a contractual right to extend a probationary period for a reasonable period of time.
An open-door policy can mean that you are aware of any issues which may be hindering employee performance sooner and can help alleviate or remove causes of poor performance such as a stressful working environment or lack of resources. If you are aware that there may be issues in a certain area, you can monitor these and make changes where necessary.
Feedback and Appraisals
It is helpful if managers are trained in how to provide regular informal feedback in a constructive and positive manner and encouraged to hold regular appraisals to confirm the content of performance discussions. This will again serve for communication between your managers and other employees to remain strong, provide opportunities for managers to praise employees for good work and for any issues to be dealt with at an early stage, hopefully before employee performance becomes a real concern. It will also mean that appraisals should cause less anxiety for managers and their direct reports, as they will know what to expect as feedback has been open and honest throughout.
Different individuals within your organisation will have different personalities and perform different functions and so need to be dealt with appropriately and dependent on these. Whilst a consistent performance management procedure is advisable when this becomes a formal concern, the best approach for performance management in the early stages will not be a ‘one size fits all’ approach, as individuals will be motivated by different things and react in different ways to the same situation dependant on their personality.
If performance of an employee is consistently strong, for this to be maintained employees require incentivisation and may be incentivised by different things. If performance is sub-standard an employee may require further support, mentoring or training. The more thought that can be given to this at any early stage, the better, as it may save the requirement for performance improvement plans and other formal meetings in the future.
Also, if an employee has a disability it may be that they require reasonable adjustments to be made to be able to perform their role without being subjected to a disadvantage when compared to an employee without their disability and reach the same level of performance as that comparator. In that case, reasonable adjustments should be put in place before performance management is considered, employee’s should be consulted on adjustments and occupational health advice may be required to advise on those adjustments.
Writing a disciplinary procedure and designing employment policies
It is a statutory requirement to have a written grievance procedure and a written disciplinary procedure. It is a matter for you and your business as to whether you decide to have a disciplinary procedure relating to conduct and a separate one for performance, or whether they both fall within the same procedure, but somewhere this must be written down and made available to your employees. The Acas Code of Practice on Disciplinary and Grievance Procedures (Acas Code) should be carefully considered and abided by. If you do not have a disciplinary procedure and would like this drafting for you or if you would like your business’ disciplinary procedure to be updated, our employment solicitors can help.
Even if you have well-designed employment policies these must be followed carefully and if there are potential liabilities still to resolve after following your procedures you may also want to consider an alternative resolution to avoid litigation. You may look at mediation, redeployment or even offering a settlement agreement to your employee. If you are considering this option it is advisable to seek legal advice.
How to conduct a disciplinary investigation into employee performance
Getting a disciplinary investigation right is the foundation of carrying out a fair disciplinary procedure and so avoiding unfair dismissal claims at a later date. Therefore, it is important that:
- Disciplinary investigations are prompt – investigations should always be carried out even where guilt of an employee may seem obvious. The employee should always be given the opportunity to explain and investigations should be carried out promptly to either exonerate an innocent employee quickly or to understand what has happened quickly and better avoid the likelihood that evidence will be destroyed or hidden.
- Disciplinary investigations are impartial – for example the investigating officer will usually be the line manager of the employee subject to the disciplinary procedure but if the line manager made the complaint being investigated or is a witness, another impartial investigating officer should be chosen.
- Disciplinary investigations are fair – the employee under investigation should be allowed the opportunity to be accompanied to meetings by a colleague or trade union representative, the opportunity to respond to clearly set out allegations, have time to prepare for any meetings and have the right of appeal any decisions you make.
- Disciplinary investigations are clear – employees should fully understand any allegations being made against them, before a formal hearing is held. Also, the investigating officer should be clear on what the allegations are and the type of evidence that will be required before collecting and documenting it in a clear way. They should not use the investigation as an opportunity to collect any and all information about the employee by whatever means as this would likely breach the employer’s implied term of trust and confidence.
- Disciplinary investigations are thorough – for the disciplinary procedure to continue after the investigation the investigation must find there is sufficient evidence for the allegations to be pursued. In order to carry out a thorough investigation without this being prejudiced and particularly if allegations of serious misconduct are being investigated, paid suspension of the employee in question might be considered but should not be used longer than necessary. What is deemed ‘thorough’ will depend on the circumstances, but all of the key facts will need to be established so far as possible at the investigation stage and where allegations are more serious particular time and care should be taken with the investigation.
- Use of witnesses is carefully considered – full notes of all witness interviews must be taken and agreed by the witness afterwards. Witnesses (including the employee subject to the disciplinary procedure) will also need to be clear on their obligations relating to confidentiality and the disciplinary procedure and so you should make them aware of this during the investigation.
- You are clear that this is an investigation and not a disciplinary hearing – This should be an opportunity to gather evidence and establish the facts, not to draw any conclusions. Even if the evidence clearly points against the employee’s innocence or the employee admits guilt during the investigation, you should complete the investigation to establish all of the facts and circumstances and still invite an employee to a formal disciplinary hearing.
When conducting a disciplinary investigation you will clearly always have to bear in mind your business’ disciplinary policy and the Acas Code to avoid unfair dismissal claims, as whether dismissal is fair will depend on the reasonableness of your decision in the particular circumstances and the procedure followed and if there is unfairness under the Acas Code, the Employment Tribunal is entitled to increase compensation up to a maximum of 25% .
A decision to dismiss or take other disciplinary action should not be taken without a disciplinary hearing or meeting, apart from in exceptional circumstances. Even if the employee in question has less than 2 full years’ continuous service and so does not qualify for ordinary unfair dismissal rights, there may be other potential claims, such as automatic unfair dismissal, discrimination or harassment claims which could be brought by that employee in certain circumstances. The non-statutory Acas guidance which accompanies the Acas Code provides practical guidance on the handling of disciplinary matters and so is worth reading and considering when carrying out your disciplinary investigations.
Watch this video of our employment solicitor explaining how to ensure a fair process during any investigations:
Potential actions and outcomes
There is a decision to be made about whether the allegations of misconduct are to be upheld and secondly, if it is upheld, what sanction should you impose?
If an allegation is not upheld, an employee should be informed of this in writing without unreasonable delay and within any timeframes set out in your business’ disciplinary procedure. If any timeframes in your disciplinary procedure are unrealistic, these should be altered, our experienced employment solicitors can help to update your policies.
If you do uphold the allegations, most disciplinary procedures provide for a first written warning, a final written warning, dismissal with notice or summary dismissal. Some procedures also allow for action short of dismissal, such as demotion or, if performance is an issue, a performance improvement plan or further support and training might be considered if this has not already been implemented and might help. It is crucial that you follow the disciplinary sanctions set out in your disciplinary procedure.
- Dismissal – before dismissing an employee ensure that you have not only followed a fair procedure, but that you have reasonable grounds for believing that the employee was guilty of misconduct or that dismissal was within the band of reasonable responses. If in doubt, seek legal advice from one of our employment solicitors first. If you have decided to dismiss, the letter confirming this should: set out the allegations, findings for each allegation, and the reason and factual basis for the decision to dismiss. Previous warnings should be referred to, together with the termination date and length of any notice period and how that will be served and paid. The employee’s pro rata holiday entitlement up to the termination date should be confirmed and any payment or deduction made as a result. Finally, you should provide appeal instructions and the deadline for the appeal.
- Warnings – depending on the severity of the allegations, the Acas Code recommends employees are given at least one chance to improve before a final written warning is issued. There must be a genuine reason for a written warning and it must be proportionate to the offence to avoid you being in breach of the implied term of mutual trust and confidence. Previous warnings can be taken into account if they are still live and also even if they are expired warnings, if dismissal would have been the result in any case.
The previous Acas Code indicated that final written warnings should remain live for 12 months, but the current Acas Code does not set out guidance on the length of warnings and so it is now down to your discretion to assess what is fair and reasonable in the circumstances and advise the employee how long a warning will remain active.
The non-statutory Acas guide indicates that six months for a first written warning and 12 months for a final written warning might be reasonable. If a warning is given, the letter confirming the decision should, as with a letter of dismissal, set out the allegations, findings for each allegation, the reasons for the decision and factual basis. Employees should be made aware of the level of warning, previous live warnings and whether these have been taken into account. The period that any new warning will remain in force (and whether the live period can be extended) and possible consequences of further misconduct or continuing unsatisfactory performance should also be provided. The place where the warning will be stored and what will happen to the warning after expiry should be made clear. Finally, when formally advising your employee of your decision, provide instructions on how to appeal, who the appeal should be addressed to and the deadline for receipt.
- Other sanctions – demotion, redeployment, a performance improvement plan, training or a further written warning might be possible reasonable alternatives to dismissal and would be a good idea to consider in some circumstances. You might also consider fining an employee (e.g. non-payment of bonus) or suspending them without pay. It is possible that the employee could argue that an offer of demotion instead of dismissal on the basis of “accept it or be dismissed” is a repudiatory breach of contract by you, and claim wrongful dismissal, and compensation for unfair dismissal. For these actions you must have explicit employee consent or prior contractual agreement to avoid a breach of contract claim and so do seek legal advice if you are unsure.
Appeals and further action
A right of appeal should be offered where disciplinary action has been taken and the deadline for making that appeal should be reasonable. The Acas guide states that 5 days from communication of a decision to bring an appeal is reasonable, but the Acas Code itself is silent on this point. If you are considering stating that an appeal is out of time, you may want to seek legal advice first. Employees are allowed a companion to attend appeal meetings as with other formal disciplinary meetings and remember to comply with the appeal requirements set out in any contractual procedure, to avoid a successful constructive dismissal claim or a claim for unfair dismissal if the appeal is against a dismissal.
If an employee does not appeal, but submits an employment tribunal claim for unfair dismissal, the employment tribunal may reduce any compensatory award by up to 25%, if it decides the failure to appeal was unreasonable. If an employee wishes to pursue a claim for unfair dismissal, they must issue the claim in time, usually within three months from termination.
An appeal, where possible, should be dealt with impartially by someone not previously involved in the disciplinary action being appealed and usually by someone more senior than the individual who made the first decision. A manager conducting the appeal should have access to all of the original evidence and copies of the notes from the earlier parts of the disciplinary process, but cannot discuss with those previously involved in decision making before the appeal meeting, to avoid bias and so an unfair procedure.
You should ask for the employee to state their full grounds of appeal, in writing, to decide whether the appeal will be a review of the original decision and evidence, or a full rehearing. This way of categorising appeals has limited usefulness, as what is important is whether the disciplinary process as a whole has been fair – and being fair at the appeal stage is critical and can even rectify previous unfairness in a process. Having said this, unfairness at the appeal stage does not necessarily render a previously fair dismissal unfair.
If new evidence arises during the appeal, the employee should have the opportunity to comment on this before a decision is taken, but new evidence can be taken into account to justify a dismissal. In the same way if new evidence exonerates an employee then you should not continue to justify a dismissal decision from original evidence, instead the original decision can be overturned on appeal. New evidence at the appeal stage may only be considered by a tribunal to consider the fairness of a dismissal. If the evidence demonstrates that a different reason would justify dismissal (and not the reason actually given at the disciplinary stage), you would not be able to rely on it to justify the dismissal.
It is not open to you to change a final written warning to a dismissal, if your contractual disciplinary procedure does not specifically allow you to increase a sanction on appeal. If your policies provide for an express power to increase the sanction on appeal this could be used, however, the non-statutory Acas guide states that appeals should not be used as an opportunity to punish employees for appealing the original decision. By increasing the penalty to dismissal after the appeal this may deter individuals from appealing and so would probably not be encouraged best practice.