Disciplinary Clauses in Employment Contracts
How disciplinary procedures should be referenced in employment contracts. Understand contractual vs non-contractual procedures.
Employment contracts should reference disciplinary procedures but typically keep the detailed procedure non-contractual.
Legal Requirements
Written Statement Must Include
The written statement of particulars must specify:
- Any disciplinary rules applying to the employee
- Who the employee can appeal to
- How disciplinary decisions are made
Or state where this information can be found.
ACAS Code
Employers must follow the ACAS Code of Practice on Disciplinary and Grievance Procedures. Failure to follow it can increase tribunal awards by up to 25%.
Contract Clause Options
Reference to Policy (Recommended)
"The Company's disciplinary procedures are set out in the Employee Handbook. These procedures do not form part of your contract of employment and may be varied by the Company from time to time. A copy is available from HR."
Contractual Procedure (Risky)
"The disciplinary procedure set out in Schedule A forms part of this contract. Any amendments require your agreement."
Why this is risky:
- Cannot easily update the procedure
- Breach of contract claims if not followed exactly
- May need to follow even for minor matters
Non-Contractual Statement
Clear Non-Contractual Wording
"The disciplinary and grievance procedures contained in the Employee Handbook are provided for guidance only and do not form part of your contract of employment. The Company reserves the right to amend these procedures at any time without notice."
Why Keep It Non-Contractual?
| Aspect | Contractual | Non-Contractual |
|---|---|---|
| Changes | Require consent | Can update freely |
| Compliance | Must follow exactly | Substantial compliance |
| Breach claims | Yes if not followed | No |
| ACAS Code | Still applies | Still applies |
What to Include in Contract
Basic Reference
"You are subject to the Company's disciplinary procedure, details of which are available in the Employee Handbook."
Gross Misconduct List
"Without limiting the Company's discretion, the following are examples of gross misconduct that may result in summary dismissal:
- Theft, fraud, or dishonesty
- Violence or threats of violence
- Gross insubordination
- Serious breach of health and safety
- Serious breach of confidentiality
- Being under the influence of alcohol or drugs at work
- Discrimination or harassment
- Bringing the Company into serious disrepute"
Right to Dismiss
"The Company may dismiss you without notice in cases of gross misconduct. In other cases, dismissal will be with notice or payment in lieu of notice, following the disciplinary procedure."
Appeal Rights
In the Contract
"If you are subject to disciplinary action, you have the right to appeal. Appeals should be made in writing to [person/position] within [5 working days] of the disciplinary decision."
Minimum Requirements
- Named person or position to appeal to
- Time limit for appeals
- Process for appeal hearing
Suspension
Suspension Clause
"The Company may suspend you on full pay pending investigation of any disciplinary matter. Suspension is not a disciplinary sanction and does not imply guilt."
Key Points
- Usually with pay (unless contract says otherwise)
- Should be for shortest time necessary
- Review regularly
- Maintain confidentiality
Investigations
Investigation Clause
"Where the Company considers it appropriate, it will investigate any allegations before taking disciplinary action. You are required to cooperate with any investigation and may be required to attend investigatory meetings."
Relationship to Dismissal
Unfair Dismissal Protection
Even with good procedures:
- Employees with 2+ years' service have unfair dismissal rights
- Dismissal must be for a fair reason
- Procedure must be followed fairly
- Sanction must be within range of reasonable responses
Following the Procedure
Whatever is stated in the contract:
- ACAS Code must be followed
- Substantial compliance required
- Minor deviations may be acceptable if overall fair
- Major failures likely to make dismissal unfair
Best Practice
For Employers
- Keep detailed procedure non-contractual
- Reference procedure in contract
- State procedure is subject to change
- Include non-exhaustive gross misconduct list
- Specify appeal route
- Ensure procedure follows ACAS Code
- Train managers on procedure
- Document all disciplinary matters
Related answers
Employment Contract Requirements UK
What must be included in a UK employment contract? Learn the legal requirements for written statements of particulars and what happens if you get it wrong.
Disciplinary Procedure Steps UK
A step-by-step guide to running a fair disciplinary procedure in the UK. Follow these steps to stay ACAS-compliant and reduce your tribunal risk.
Frequently Asked Questions
- Must disciplinary procedures be in the employment contract?
- The existence of a disciplinary procedure must be notified in the written statement of particulars. However, the detailed procedure is usually in a separate policy document that should be stated as non-contractual.
- What happens if an employer doesn't follow their disciplinary procedure?
- If the procedure is contractual and not followed, the employee may have a breach of contract claim. Non-contractual procedures are more flexible, but failing to follow them can still lead to unfair dismissal claims.
- Should disciplinary procedures be contractual?
- Most employers make disciplinary procedures non-contractual to allow flexibility to update them. However, they must still be followed substantially to avoid unfair dismissal claims.