Can you impose alternative disciplinary penalty to dismissal?

Can you impose alternative disciplinary penalty to dismissal?

Following a disciplinary hearing, the normal sanctions for confirmed misconduct are either a written warning, final written warning or dismissal. However, those are not necessarily the only penalties available. What else can you consider?

Acas Code and guide

The Acas Code of Practice on Disciplinary and Grievance Procedures provides for first or final written warnings to be issued as disciplinary penalties for confirmed misconduct, with the final stage in the disciplinary procedure normally being dismissal with notice (although dismissal without notice for a first offence can apply in cases of gross misconduct). However, an employment contract may allow for a different disciplinary penalty instead and the non-statutory Acas Code on discipline and grievances at work, which supports the Code, says that such a penalty can be an alternative to dismissal.

Trap. Neither the Code nor the guide mention issuing a different penalty as an alternative to a warning, so only consider them as alternatives where you are contemplating dismissal.

Alternative disciplinary penalties

Alternative disciplinary penalties may include: (1) demotion; (2) disciplinary transfer, such as to another team or role; (3) disciplinary suspension without pay; (4) loss of seniority, e.g. by not being eligible for promotion; (5) loss of an increment, i.e. withholding or reducing a scheduled pay increase; (6) loss of a bonus; and (7) loss of overtime.

Importantly, these penalties may only be applied if either allowed for in the employment contract or with the employee's express (and voluntarily given) consent. If you take any of these steps without the contractual right to do so or the employee's consent, it could result in a claim for breach of contract or, if the penalty affects pay, unauthorised deductions from wages. If the employee resigns because of your actions, you may face a constructive dismissal claim. Tip. These penalties could be contained in a disciplinary procedure, but that part of the procedure would need to be explicitly contractual.

The alternative disciplinary sanction should be confirmed in writing and the right of appeal clearly set out. It may also be accompanied by a final written warning.

Tip. Ensure the penalty is commensurate to the misconduct, i.e. the sanction must not be too harsh in the circumstances, as you must always have regard to the implied duty of trust and confidence. Complying with this duty also means the penalty only being in place for a reasonable temporary, fixed period rather than being permanent.

Tip. Only apply an alternative penalty in very exceptional cases. Remember, you need to treat similar cases consistently so beware of setting dangerous precedents.

Seeking consent

Where you have no contractual right to impose an alternative disciplinary penalty and you wish to seek an employee's written consent to it after the disciplinary hearing, to obtain that consent it may be tempting to put pressure on them to accept. However, it's possible they could try to argue that a threat of "accept the penalty or be dismissed" is itself a repudiatory breach of contract. To avoid this, don't make any threats; instead, set out in a factual and neutral way that dismissal is the likely alternative.

You can impose a different disciplinary penalty for misconduct, such as demotion, disciplinary transfer or loss of an increment, but only as an alternative to dismissal and only if either allowed for in the employee's contract or with their express consent. Even then, reserve it for very exceptional cases and make the sanction only temporary.