THE FIRST FULL REWRITE OF ACAS’ CODE OF PRACTICE ON DISCIPLINARY AND GRIEVANCE PROCEDURES SINCE 2009

In our recent article, “Changes to Unfair Dismissal Rules in Great Britain“, an update was provided in relation to the forthcoming changes to the law relating to unfair dismissal, how these changes will create greater financial and legal risks for employers, and how employers can navigate these changes when dismissing employees.

On top of these changes ACAS has published their draft Code of Practice on Disciplinary and Grievance Procedures for consultation on 30 July 2026; this draft represents the most significant overhaul of workplace dispute management guidance in over 15 years.

If implemented, the extensive revisions will replace the existing Code which has remained substantially unchanged since 2009. However, the new version will still ensure that its core principles of fairness and procedural justice are preserved.

For employment lawyers, HR professionals and employers, the proposed reforms are particularly important because Employment Tribunals must take the ACAS Code into account when determining relevant cases, and unreasonable non-compliance can lead to compensation awards being increased or reduced by up to 25%.

ACAS Aims to Reduce Employers’ £2.36 Billion Annual Spend

ACAS has positioned the consultation as part of a broader effort to improve workplace relations and address the growing costs associated with unresolved workplace conflict.

According to ACAS, formal disciplinary and grievance procedures cost UK employers an estimated £2.36 billion annually, while workplace conflict remains widespread. The draft Code seeks to encourage earlier intervention and resolution before disputes escalate into formal procedures or litigation.

The consultation remains open until 23 September 2026.

The Core Principles

Despite the extensive rewrite, the draft Code retains the fundamental procedural principles that have underpinned fair disciplinary and grievance processes for many years. These include:

• Investigating matters appropriately.

• Informing individuals of concerns and potential consequences.

• Providing an opportunity to respond.

• Acting reasonably.

• Progressing matters without unnecessary delay.

• Providing a right of appeal.

The Biggest Change: Informal Resolution Moves to Centre Stage

The most notable reform is the elevation of informal resolution from good practice guidance to a central feature of the statutory Code itself. Under the current framework, informal resolution is mentioned only briefly, particularly in relation to grievances. The draft Code embeds informal resolution within the main body of the Code and applies it to both employer concerns (such as misconduct or performance issues) and worker complaints.

In the employer’s case, for example, it will be expected to consider informal discussions before commencing formal processes. This may involve using mediation where appropriate or providing coaching or training.

The significance of this change should not be underestimated; because the Code can influence tribunal awards, a failure to consider informal resolution may lead to adjustments to compensation of up to 25%.

Greater Emphasis on Mediation

Closely linked to the focus on informal resolution is a new emphasis on mediation and facilitated conversations. The draft Code includes a dedicated section on mediation, highlighting its potential role in resolving disputes before positions become entrenched.

Although mediation will not be mandatory, ACAS clearly intends employers to give serious consideration to alternative dispute resolution mechanisms where appropriate. This reflects a growing policy preference for constructive workplace dialogue rather than adversarial processes.

New expectations for documentation

The draft Code also introduces more detailed requirements regarding disciplinary and grievance correspondence.

For example, disciplinary invitation letters should explain:

• What informal steps have already been taken; or

• Why informal resolution was not considered appropriate.

Similarly, workers raising grievances may be expected to explain the nature of their concerns and the outcomes they seek.

This reflects a broader shift towards demonstrating procedural thoughtfulness and ensuring there is a clear evidential trail regarding attempts to resolve concerns.

A More Restrictive Approach to Suspension

Another important development concerns the use of suspension during disciplinary investigations.

The draft Code introduces a stronger expectation that suspension should only be used where genuinely necessary, rather than as a routine precaution. While many employers with good HR practices will already adopt this approach, employers will be expected to be able to demonstrate alternatives have been considered and any decision to suspend is justified.

This reflects the direction of recent employment case law, which has increasingly recognised that suspension can have significant implications for an employee's reputation and wellbeing, and can impact negatively on the employment relationship. As the suspension will only be possible in limited circumstances there will need to be a documented audit trail.

Focus on Equality and Reasonable Adjustments

The proposed Code contains stronger references to avoiding discrimination and making reasonable adjustments throughout disciplinary and grievance procedures. Employers are encouraged to consider whether adjustments may be required for disabled workers and to ensure that processes are conducted fairly for all participants.

This reflects modern workplace expectations and aligns the Code more closely with Equality Act obligations.

Broader Scope of Referencing – “Workers” rather than “Employees”

A significant change is the replacement of references to “employees” with references to “workers” throughout much of the draft Code. This potentially brings a wider range of individuals within its practical scope. Interestingly, the 25% uplift in compensation will only be available to employees.

Conclusion

The draft ACAS Code does not fundamentally alter the established requirements of procedural fairness. However, it represents a significant philosophical shift – rather than focusing primarily on managing disputes once formal proceedings begin, the new Code seeks to encourage employers and workers to resolve concerns earlier, more collaboratively and with less escalation.

For employers, the message is clear: informal resolution, mediation and proactive conflict management will no longer be peripheral considerations.

Under the proposed framework, employers will need to place greater emphasis on what constitutes reasonable workplace practice. With tribunal uplifts of up to 25% remaining available for unreasonable failures to follow the Code, Employers should be doing the groundwork now as it is likely that given the shift to increased workers’ rights, the Code will be updated.  

If your business wants to reduce its litigation exposure and be ready for the changes to unfair dismissal rules and the proposed changes to the Code, the FG Solicitors Employment Team can help you get ready – starting with contract and policy reviews, manager training, and support in managing your disciplinary and grievance procedures.

Contact FG Solicitors today on 08081 729 322 or complete our quick contact form for a no obligation discussion!

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  This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.