ACAS Code of Practice (Quick Reference Guide)

The ACAS codes of practice are advisory documents created by the Advisory, Conciliation and Arbitration Service (ACAS) and approved by parliament. ACAS is a independent, non-governmental public body whose role is to help improve workplace relationships.

Each ACAS code of practice sets out fair behaviour guidelines for employers and employees in five key areas of employment practice:

1. Discipline and grievance: setting out the basic requirements and standards of fairness in workplace disciplinary and grievance procedures.
2. Disclosure of information to trade unions: guidance on the information and documentation employers should disclose as part of industrial relations activity.
3. Time off for trade union duties and activities: guidance on time off for trade union officials.
4. Settlement agreements: detailing the implications of settlement agreements on employment rights and how they are to be used within settlement negotiations.
5. Requests to work flexibly: setting out how employers should handle requests by employees to change working hours or place of work.

 
Employment law issues arise in all workplace environments. Dealing with employment issues effectively when they arise reduces the risk of tribunal claims and fosters a positive and productive working environment.

The ACAS guidelines are designed to provide clarity and certainty in standards for both employers and employees when handling specific issues at work. While not mandatory, employees and employers are expected to follow the guidelines. Failure to follow the codes would not in itself expose a party to proceedings but the tribunal does have powers to reduce or uplift awards in light of a party’s conduct against the ACAS standards.

 

What are the consequences of breaching the ACAS codes?

Failure to adhere to the codes of practice would in itself not give cause to legal proceedings, since the codes act as guidelines and not law. However,the employment tribunal has discretion to evaluate conduct and how well parties have adhered to the code when settling employment-related disputes. Any employer or employee who has not followed the guidelines in the code of practice may be considered to have acted unfairly or unreasonably conduct. In such instances, compensation awards, penalties and the overall outcome of any formal proceedings can be adjusted to reflect any failure to meet the required standards.

As such, employers are advised to use the codes as the basis for consistent and compliant workplace procedures, to help ensure positive workforce relations and reduce legal risk of legal claims.

 

ACAS code of practice 1: Discipline and grievance

Employers and workers should always attempt to address and resolve workplace disciplinary and grievance issues. Disciplinary and grievance matters can in most cases be settled informally. Where this is not achievable, however, formal action may be necessary.

The ACAS code of practice on discipline and grievance provides guidance to employers, employees and representatives seeking to resolve these conflicts in the workplace.

A key provision in the code states that disciplinary and grievance issues should be dealt with informally, wherever possible. Informal action is often the fastest and most effective way to resolve minor cases of misconduct or poor performance in employees. Equally, employers should make every effort to listen to and make reasonable adjustments for employee grievances.

When a grievance or disciplinary issue cannot be resolved informally in the workplace, the employer should consider using an independent third party to mediate a resolution. Otherwise, an employee may be able to bring formal tribunal action against the employer.

This could involve engaging a neutral third party to help address the issue if it is not possible for the parties to resolve the matter themselves. As long as they are not involved in the disciplinary or grievance matter, the third party does not necessarily need to be from outside the organisation but might be an inside mediator, although it is often acceptable in some situations to use an outside mediator.

The ACAS code of practice explains what is expected of organisations and individuals in terms of fairness and transparency, throughout formal disciplinary or grievance proceedings. It is best practice for employers to have written policies in place detailing the relevant disciplinary and grievance procedures for the organisation. The written statement of employment particulars (as required by the Employment Rights Act of 1996) must include a reference to any disciplinary, dismissal, or grievance processes, but the actual procedures may be provided elsewhere, such as in the employee handbook.

 

Disciplinaries

Disciplinaries relate to issues of misconduct and poor performance. Some employers opt to manage poor performance under a separate capability procedure, which should still follow the basic principles of the disciplinary guidance.

Under the guidance, disciplinaries should follow this general outline:

• Notify the employee of the issue
• Invite the employee to a disciplinary hearing
• Disciplinary hearing with right to be accompanied
• Decide on disciplinary action, if any
• Notify the employee of the decision & right to appeal

 

Grievances

Grievances are workplace issues, complaints or concerns raised formally by employees to their employer.

The Code outlines the following as a basic procedure:

• Hold grievance hearing with employee to discuss complaint or concern & right to be accompanied
• Decide on appropriate course of action
• Notify the employee of the decision & right to appeal

 

Key points for employers

Key points from the ACAS code of practice are:

• Employers and employees should seek to resolve problems informally, before considering formal action.
• Employment tribunals must take the ACAS code of practice into consideration when settling discipline and grievance cases.
• Employment tribunals can adjust any financial awards by up to 25 percent if a party has not complied with any code of practice provision and cannot justify this non-compliance with a reasonable excuse.
• The ACAS code of practice on discipline and grievance does not apply to non-renewal of fixed-term contracts or redundancy dismissals.
• Employers are responsible for carrying out thorough and fair investigations to establish the facts of any case.
• Both employers and employees should raise and seek to resolve issues promptly and without unreasonable delay.
• Employees must be allowed to give their side of the story before any decisions are made and should be given the right to appeal any formal decisions.
• Employers should allow employees to be accompanied during formal meetings.

 
Employers should allow and inform employees if their right to appeal any decision.

ACAS expects prompt action by both the employer and employee to resolve issues with no unreasonable delays, such as postponing meetings and protracted decision-making.

In addition to the ACAS code of practice, employers and employees may refer to Discipline and grievances at work: The ACAS guide, which provides non-statutory guidance on discipline and grievance resolution in the workplace.

 

ACAS code of practice 2: Disclosure of information to trade unions for collective bargaining purposes

This section of the ACAS code of practice advises employers which information they may have a duty to disclose to trade unions, in the interest of good industrial relations practice. It serves to protect trade unions from unfair treatment which may prevent them from securing better working conditions for their members.

The Code, alongside the Trade Union and Labour Relations (Consolidation) Act 1992, is applicable both to public and private sector employers. While it does not apply to collective bargaining between employers’ associations and trade unions, such parties may opt to follow the guidelines as best practice.

The Code asserts no legal requirement on employers to disclose specific pieces of information, but it does cover information that employers may be legally obliged to disclose under section 181 of the Act, and in accordance with good industrial relations practice. Breaching the Code would not automatically trigger legal action, but the Act mandates that any applicable requirements be taken into consideration in hearings before the Central Arbitration Committee.

Specifically, the Code of practice refers to information without which a trade union representative may be disadvantaged during collective bargaining i.e. while negotiating wages, benefits and other conditions of employment.

During any formal proceedings, the Central Arbitration Committee will use the provisions set out in the code of practice as reference points to determine whether an organisation has dealt with a trade union fairly. While employers are not legally required to disclose any information, they may be penalised for failing to do so if the ACAS code of practice indicates it would have been the fairest and most appropriate action.

Employers are not required to disclose any information that:

• would be against the interests of national security;
• would contravene a prohibition imposed by or under an enactment;
• was given to an employer in confidence, or was obtained by the employer in consequence of the confidence reposed in him by another person;
  relates to an individual unless he has consented to its disclosure;
• would cause substantial injury to the undertaking (or national interest in respect of Crown employment) for reasons other than its effect on collective bargaining;
  or was obtained for the purpose of any legal proceedings.

 
Information sought by trade unions for collective bargaining should be requested in advance of negotiations whenever practicable. Requests should also be made following an agreed procedure, and should be precise and specific, and supported with the reasons why the information is considered relevant, so as to minimise cost and time and to avoid misunderstandings. Employers should be afforded a reasonable period of time to consider and respond to requests.

 

Key points for employers 

Key points from the ACAS code of practice are:

• The information in question must be in the possession of the employer and must relate to the employer’s activities.
• This code applies to both public and private sector organisations.
• Trade unions may make a formal complaint to the Central Arbitration Committee if they believe an employer has failed to disclose relevant information.
• The Central Arbitration Committee must take provisions in the ACAS code of practice into account during any relevant proceedings.
• If a complaint is upheld by the Central Arbitration Committee and the employer fails to disclose the requested information in a reasonable timeframe, an award may be made in favour of the trade union.

 

ACAS code of practice 3: Time off for trade union duties and activities

Section three of the ACAS code of practice aims to improve relationships between employers and trade unions, by providing advice on how to agree paid and unpaid time off for trade union representatives and members who wish to fulfil duties, conduct training or engage in union activities. The code emphasises the fact that employers and trade unions are jointly responsible for establishing specific, mutually advantageous arrangements which outline how time off for union-related activities and duties will work. ACAS recognises that different provisions should be made, concerning time off for:

• Trade union duties (e.g. collective bargaining or tasks relating to collective bargaining, accompanying union members to formal meetings)
• Training of trade union representatives
• Trade union activities (e.g. attending meetings, voting in union elections)

 
While specific time off guidelines for each of these cases may differ, the ACAS code of practice states that all trade union representatives and members must be permitted reasonable time off for activities and duties. Should a disciplinary or grievance case concerning time off for trade union duties or activities come before an employment tribunal, the tribunal is legally required to consider the code’s provisions when settling the matter.

 

Key points for employers 

Key points from the ACAS code of practice are:

• Trade union members and representatives must be allowed reasonable time off to participate in union activities or fulfil duties.
• Employers who allow union representatives time off for trade union duties must pay them for the time they would have spent in work. Where earnings vary based on the work completed, employers must pay an average hourly rate.
• Employers who allow union members time off to engage in union-related activities are not obliged to pay them for the time they would have spent in work. However, they may choose to offer payment.
• Both employers and trade unions are responsible for deciding what constitutes “reasonable” time off. This must balance the needs of the trade union and the employee with the operational requirements of the organisation.

 

ACAS code of practice 4: Settlement agreements

Section four of the ACAS code of practice deals with settlement agreements, which can be used to resolve serious complaints, disciplinary issues and grievances in the workplace. These contracts are legally binding and if agreed by both parties, will waive the individual’s right to pursue the issue stated in the agreement in court, or before an employment tribunal. Usually, settlement agreements involve termination of the employee’s contract and some form of compensation paid to the employee by the employer, in exchange for the employee dropping the case.

A settlement agreement may be proposed by either party after a complaint has been raised, either before or during formal proceedings. You are under no obligation to consider or accept any settlement agreement proposed by your employer or employee, nor are you bound to accepting initial terms. Even when both parties are amenable to the idea of a settlement agreement, several rounds of negotiation are often required to establish suitable terms.

The ACAS code of practice sets out the rules and guidelines for establishing mutually beneficial settlement agreements. It aims to help employees secure a fair deal while making sure that employers meet conduct and confidentiality requirements.

 

Requirements for a legally-binding settlement agreement

A settlement agreement must meet a number of criteria in order to be compliant. These are:

• The agreement must be in writing.
• It cannot say that the settlement is in ‘full and final settlement of all claims’ and must state which specific claims the employee will be prevented from bringing.
• The employee must obtain legal advice from an appropriate independent expert, such as a lawyer, certified trade union official or certified advice centre worker, who has adequate professional indemnity insurance to protect the employee.
• The agreement must provide full details of the independent adviser.
• It must provide a statement that the relevant statutory conditions regulating the settlement agreement have been satisfied.
• The agreement should outline the employee’s termination date, compensation amount, and timings of payment.

 

Without prejudice discussions

Discussions that are held to negotiate a settlement agreement in connection with an ongoing employment dispute can be, and are typically, conducted “without prejudice“. This means that statements made during a meeting or conversation that is held “without prejudice” cannot be used as evidence in a court or tribunal.

However, if there is no existing dispute between the parties, the “without prejudice” rule cannot apply. Therefore, in order to provide greater flexibility in the utilisation of private conversations as a way of terminating the work relationship, Section 111A of the ERA 1996 was adopted. Under s111A, even in the absence of an employment dispute, the parties may still offer and discuss a settlement agreement with the understanding that their discussions may not be referenced in any subsequent unfair dismissal claims, which will operate alongside the “without prejudice” principle. This Code specifically focuses on the section 111A confidentiality provision.

 

Key points for employers 

Key points from the ACAS code of practice:

• Settlement agreements are voluntary. Parties are not legally required to entertain or agree to them.
• For a settlement agreement to be valid, the employee must have received advice from an independent advisor who is named in the contract.
• Settlement agreements only become legally binding once they are proposed in writing and signed by both parties.
• According to the common law “without prejudice” principle, proposed settlement agreements made in good faith cannot be used as evidence during an employment tribunal. This does not apply in cases where one or more parties have engaged in “improper behaviour” such as undue influence or blackmail.

 

ACAS code of practice 5: Handling in a reasonable manner requests to work flexibly

This section offers guidance to employers and employees on handling requests to work flexibly. All employees have a legal right to request flexible working hours after 26 weeks of employment. Though, they may only submit a request once in a 12-month period. When submitting a request to work flexibly, employees should follow the provisions outlined in the code, which include:

• Submitting the request in writing
• Stating that they are making a statutory request to work flexibly
• Stating their proposed change in working hours and when they would like that change to take effect
• Acknowledging any adverse effects this change may have on the employer and proposing reasonable solutions to deal with them

 

Employers can more effectively manage requests for flexible work arrangements by fostering an environment in which employees are assured that decisions about their requests will be made honestly and fairly, and that they will not be treated poorly because they requested flexible working arrangements.

Employers should consider adopting a policy for handling requests for flexible working. A policy can assist with maintaining uniformity in handling requests and facilitate communications about flexible working to all employees. It can also assist employees understand that the right to request is not limited to parents and caregivers, as the previous right to request was, but employers should not discriminate when evaluating requests for flexible work arrangements.

A policy on the right to request can stand alone or be incorporated into a larger equality or flexible working policy. Some businesses may choose not to have a written policy, but they must still guarantee that their employees understand how to apply and comply with the law.

The policy should be formulated in collaboration with employees and their representatives, as well as recognised trade unions. This can help ensure that the workforce supports the policy and that it is beneficial to the organisation as a whole. Such a policy should address the following:

• How employees should submit their applications, including to whom they should be submitted and what should be included in the application.
• A declaration indicating the employer will review the request and will only deny it for one of the eight business-related reasons.
• Who may accompany the employee to meetings relating to the request
• What procedures are in place for appeals
• The timescales for processing requests

 
Employers are not obliged to approve an employee’s request for flexible working hours. However, they should make every effort to consider and handle the request in accordance with the provisions in the ACAS code of practice, which include:

• Weighing the potential benefit to the employee against any detrimental effect on the organisation
• Meeting with the employee to discuss the request, if it cannot be approved outright
• Considering potentially satisfactory modifications to the employee’s request, if it cannot be approved outright
• Arranging a discussion with the employee as soon as possible after receiving their written request;
• Permitting the employee to be accompanied at this discussion and telling the employee of this right in advance of the meeting.
• Discussing the request with the employee to have a deeper understanding of the requested changes and how they can effect the employee and the business;
• Considering the request genuinely and weighing the benefits of the requested changes against potential negative business effects of implementing them;
• Notifying the employee in writing of the outcome of their request as soon as possible;
• If the proposal is granted as-is or with amendments, consider the optimal timing for implementing the changes;
• If the request is denied, it must be for one of the eight acceptable business reasons;
• If the request is denied, the employee should be allowed to appeal the decision;
• Ensure that all requests and any appeals are reviewed and determined within the three-month decision timeframe, unless an extension is agreed upon.
• Allowing the employee the right to appeal, if the request is denied

 
An employer who rejects a request to work flexibly must be able to show that they have done so due to one of the justifiable business reasons set out in the ACAS code of practice:

• The burden of additional costs
• Inability to reorganise work amongst existing staff
• Inability to recruit additional staff
• Detrimental impact on quality
• Detrimental impact on performance
• Detrimental effect on ability to meet customer demand
• Insufficient work for the periods the employee proposes to work
• Planned structural changes to the business

 
Should denial of a flexible working request become a factor in formal proceedings, the employment tribunal will use the ACAS code of practice to determine whether the employer acted lawfully.

 

Pitfalls to avoid 

In practice, there are common errors made by employers when dealing with workplace issues that are affected by the ACAS code. These include:

 

Failing to provide relevant disclosure 

Employers should ensure that they are meeting any relevant obligation or requirement to disclose information, documentation or evidence, whether in relation to a disciplinary or grievance hearing or in the course of industrial relations. To avoid unnecessary delays in procedures or allegations of failing to disclose as required, disclosures should be made in the required format and in a timely manner.

 

Right to be accompanied 

The ACAS Codes specifically refers to the employers’ duty to allow employees to be accompanied during certain hearings, even though this is a statutory entitlement. Employers should remind employees of their right and allow them to avail of it as appropriate.

 

Record-keeping 

Contemporaneous records should be maintained as standard practice by managers and HR. These can be relied on in the event of tribunal claims, in preference over witness recollection.

 

Unreasonable delays 

The tribunal typically frowns on unjustified delays in processes, with the onus on both the employer and employee to make reasonable efforts to resolve matters expeditiously – although more complicated or challenging cases (such as those involving allegations of fraud or a criminal offence) would obviously take longer. Employers should ensure they know and work to relevant timeframes and deadlines, as well as where reasonableness is expected.

 

Specialist guidance 

As specialist employment lawyers, DavidsonMorris can advise on any aspect of the codes of practice.

For employers, we provide specific advice and support through our employment law support services and consultancy guidance on HR policy development.

We also deliver training to help ensure HR teams, line managers and supervisors have the skills and knowledge to implement the codes of practice correctly. For advice on meeting the ACAS guidelines, contact us.

 

ACAS Code of Practice FAQs

What is ACAS Code of Practice?

The ACAS Code of Practice sets out guidance and standards to promote fairness in the workplaces. Employment Tribunals use the Codes when deciding on cases.

Is ACAS Code of Practice legally binding?

Although the Code is not legally binding in itself, Employment Tribunals will take the Code into account and can adjust awards by up to 25% if either party unreasonably fails to comply with it.

What does ACAS stand for UK?

ACAS stands for Advisory, Conciliation and Arbitration Service.

What is the main role of ACAS?

ACAS is an independent public body whose role is to help improve workplace relationships.

Last updated: 23 September 2022