How to craft a disciplinary policy that's fair and effective
Your disciplinary policy helps make your workplace harmonious, productive and fair.
It maintains workplace standards and ensures that your business stays compliant with UK employment law.
A well-made workplace disciplinary policy doesn’t just protect your employees and team members: it creates a foundation for a fair, transparent, and respectful workplace environment.
This is a tricky balance to maintain in small businesses, where interpersonal team dynamics can reverberate through the whole organisation.
I’ve been helping small businesses make workplace policies that reflect their needs and company culture for years. I’d like to draw on that insight in this guide on disciplinary policies for small businesses in the UK.
Understanding disciplinary policies
A disciplinary policy outlines the steps and procedures taken in response to employee misconduct.
In principle, your disciplinary policy should seek to correct the behaviour rather than punish. You should clearly state your company’s rules and the consequences of breaking them.
In the UK, workplace disciplinary policies must align with the Advisory, Conciliation, and Arbitration Service (ACAS) guidelines. That helps ensure the rules are fair, that all your employees are held to the same standard, and that actions taken are fair and consistent across the board. It also covers your bases in case of legal disputes.
Key components of a disciplinary policy
As a small business owner, you have eyes and ears on everything in your business. The way you respond to employee misconduct sets a precedent for what kind of workplace you want to be.
That’s why it’s worth taking special time and consideration into making your disciplinary policy. Broadly speaking, this is what should go in it.
- Scope and application: Every employee who works for you is beholden to the disciplinary policy, regardless of who they are and what they do. At a small business, that extends to stipulations for different roles and probationary periods. Set clear expectations for everyone on the team.
- Informal vs. formal procedures: Not every issue requires a formal investigation. Most minor issues can be resolved through a quick conversation and a warning - particularly in a small business setting where everyone knows each other. More serious or repeat violations require more formal measures.
- Investigation process: The key here is to stay fair, impartial, and transparent. Gather the facts, then make a decision. That’s tricky in a small business with a tight-knit team. Nevertheless, it’s important to stay neutral in these matters.
- Employee rights: Employees have the right to be accompanied in disciplinary hearings. Clear communication at every step of the way is vital here. That helps to maintain an environment of trust and respect, where employees are given a chance to defend themselves at all times.
Crafting a disciplinary policy: a step-by-step guide
Disciplining employees who violate your rules and policies isn’t about punishment, it’s about correcting the behaviour and preventing it from happening again. Suppose an employee behaves unethically or does something to hurt or harass a fellow team member and you say and do nothing. In that case, you are sending a message that the behaviour is acceptable. Prompt and fair action sets the stage for a fair, safe, positive workplace.
Here are the steps you’ll want to take in making your workplace disciplinary policy.
Step 1: Assessing business needs
What makes your small business unique? Spend time considering your small business culture and values. This will help make your disciplinary policy align with your company’s purpose.
Step 2: Writing the policy
Then, it’s time to write the disciplinary policy. There are three steps to take at this stage:
- Outline clear rules and expectations: Spell out what counts as misconduct, and the consequences for the behaviour. The procedure ought to be straightforward and accessible.
- Procedure for reporting issues: Include steps that your team members can take to report any concerns they have or any misconduct they see.
- Stages of disciplinary action: Consider a stage of escalating consequences for repeat or more serious violations - starting from verbal warnings, and ending in termination. It’s important in a small business setting that the steps taken in response to employee misconduct are proportionate and reasonable.
Step 3: Implementing the policy
When the policy is drafted, introduce it at team meetings, emails, and accessible documentation.
The Charlie HR platform has a policy document management system where you can keep your workplace disciplinary policy and employee handbook — this way, anyone can read it anytime they have questions or concerns.
Having your disciplinary policy accessible to everyone helps make your procedures more fair and transparent, as GoSquared’s CEO can tell you:
“One of the things I like about Charlie is that there's a lot more transparency to the team. They know this is the place where information resides. They can upload documents themselves and they know they will be in Charlie rather than lost in some ‘cloud’ or email thread.”
Offer training to managers to make sure they know how to apply the policy in a way that’s consistent and fair.
Encourage feedback and input from your employees and ask them what they think - then refine your policy over time. Employee pulse surveys, like the ones you can run using software like Charlie, can be useful here to get a sense of how your team feels about your disciplinary policy.
Disciplinary policy template
I thought it would be helpful to include an example of what a disciplinary policy for your organisation might look like, so I’ve included a template below. Feel free to customise it to your own small business needs and core values.
Disciplinary policy template example
This policy is designed to ensure that there are effective and equitable arrangements for handling disciplinary and related matters. The purpose of the disciplinary procedure is to set out the standards of conduct expected of all team members and to provide a framework within which managers can work with staff to maintain those standards and encourage improvement where necessary. The policy complies with the Acas Code of Practice on Disciplinary and Grievance Procedures.
In order to ensure consistent and fair treatment, this procedure applies to all members of staff, although it may not always be followed during a probationary period. It does not apply to agency workers or self-employed contractors.
Minor conduct issues can usually be resolved informally with your manager. This procedure sets out formal steps to be taken if the matter is more serious or cannot be resolved informally.
Matters relating to poor performance are dealt with via the Company’s capability procedure, and matters relating to genuine sickness absence are dealt with by via the Company’s sickness absence policy.
This policy and the procedure set out within it does not form part of any employee’s contract of employment and we may amend it at any time. Dependant on the particular circumstances of the case, the Company reserves the right to resolve matters without recourse to this policy, or to only apply certain aspects of the disciplinary procedure.
Before any disciplinary hearing is held, or any disciplinary action is taken, the matter will be investigated in order to establish the facts. Any meetings and discussions as part of an investigation are purely for the purpose of fact-finding and should in no way be considered to be a disciplinary hearing. No disciplinary action will be taken without a disciplinary hearing.
In some cases we may need to suspend you from work while we carry out the investigation. Suspension is not considered to be a disciplinary action, and is not indicative of any prejudgment of the matter. You will remain on full pay and benefits during any period of suspension.
Having investigated all the facts the Company will decide whether:
- No action is needed, or;
- The matter should be dealt with informally, or;
- Formal disciplinary action is necessary.
If formal disciplinary action is the appropriate course of action, a disciplinary hearing will be arranged. You will receive written notice of the date, time and venue of the hearing, including information about the alleged misconduct and its possible consequences. You will normally be given copies of relevant documents and witness statements. You will have a reasonable period of time prior to the hearing to consider and prepare your response.
Where practicable, a different person to the one carrying out the investigation will carry out the disciplinary hearing.
An HR representative will normally be present at any formal hearing or interview and will take notes of the proceedings.
You may be accompanied at the hearing by a trade union representative or a colleague, who will be allowed reasonable paid time off to act as your companion. No-one is obliged to act as a companion if they do not wish to do so. If the Company considers your choice of companion to be unreasonable (for example if they have a conflict of interest or may prejudice the hearing), we may require you to choose someone else.
If you or your companion cannot attend on the date proposed, you can offer an alternative time and date so long as it is reasonable and is within five working days of the date proposed by the Company.
You should let us know as early as possible if there are any relevant witnesses you would like to attend the hearing or any documents or other evidence you wish to be considered.
At the hearing you will be presented with the allegations and evidence against you. You will be given the opportunity to respond to the allegations and put forward any mitigating circumstances to be taken into account. Your companion may make representations to us and ask questions, but should not answer questions on your behalf. You may confer privately with your companion at any time during the hearing.
We may adjourn the hearing if we need to carry out any further investigations in the light of any new points you have raised.
We will inform you of the decision either at this hearing or as soon as possible after it has taken place (usually within one week). You will be provided with written reasons for the decision and advised of your right to appeal.
Disciplinary action and dismissal
The usual penalties for misconduct are set out below. No penalty should be imposed without a hearing. We aim to treat all employees fairly and consistently, and a penalty imposed on another employee for similar misconduct will be usually be taken into account. However no sanction should be treated as a precedent, and each case will be assessed on its own merits.
Stage 1: First written warning
Where there are no other active warnings on your file you will usually receive a first written warning. This will usually remain active for six months, if the disciplinary procedure is not invoked again during that time. This written warning (and any subsequent written warnings) will state:
- The misconduct or other matters complained of;
- The action necessary to remedy the situation;
- Any review period which may be agreed;
- The consequences of failure to comply with the warning (either a final written warning, or dismissal with notice).
Stage 2: Final written warning
For more serious matters, or in case of further misconduct where there is an active first written warning on your record, you will usually receive a final written warning. This warning will usually remain active for twelve months, if the disciplinary procedure is not invoked again during that time.
Stage 3: Dismissal or other action
In instances of gross misconduct, or where your conduct has continued to fall below our standards after due warnings have been given, you may be dismissed. Examples of gross misconduct are given below. In cases of gross misconduct, the dismissal will usually be summary (ie without notice).
We may consider other sanctions short of dismissal, including demotion, redeployment to another role or a period of suspension without pay (where permitted by your contract), and/or an extension of a final written warning with a further review period.
Any decision will be confirmed in writing.
If you are not satisfied with a disciplinary decision, you may appeal within one week of being told of the decision. Your appeal should be made in writing, and should indicate the full grounds upon which your appeal is made.
The appeal hearing will, where possible, be held by someone senior to the person who held the original disciplinary hearing. You may bring a colleague or trade union representative with you.
On appeal a decision may be to confirm the previous decision, or to impose a lesser or greater penalty, or no penalty at all. We will inform you in writing of our final decision as soon as possible, usually within one week of the appeal hearing. There will be no further right to appeal.
If you are appealing against dismissal, the date on which the dismissal takes effect will not be delayed pending the outcome of the appeal. However, if your appeal is successful you will be reinstated with no loss of continuity or pay.
We aim to deal with disciplinary matters sensitively and with due respect for the privacy of any individuals involved. All employees must treat as confidential any information communicated to them in connection with an investigation or a disciplinary matter.
Any documentation (such as witness statements, letters, warnings and meeting summaries) will be stored securely, and only shared on a ‘need to know basis’.
Examples of misconduct
Examples of misconduct which could lead to disciplinary action include, but are not limited to:
- Unauthorised absence, or failure to comply with any aspect of the sickness absence policy;
- Poor time keeping and/or time wasting;
- Failure to comply with a specific instruction;
- Excessive use of personal email or internet usage;
- Impropriety, whether or not within working hours, which the Company reasonable considers to be detrimental to the interests of the Company;
- Failure to disclose any personal interest which represents a conflict of interest with the Company or its clients;
- Breach of confidentiality;
- Failure to maintain health and safety standards;
- Impaired work due to the consumption of alcohol and/or drugs;
- Persistent or regular unavailability for work due to illness, injury or otherwise;
- Abusive or unacceptable behaviour;
- Bullying and harassment of another staff member;
- Minor breaches of your contract.
- Any review period which may be agreed;
Examples of gross misconduct
We regard certain issues as so serious as to warrant dismissal without notice. Such matters include, but are not limited to:
- Physical and verbal violence / assault;
- Serious bullying, harassment or victimisation, particularly of a discriminatory nature;
- Making untrue allegations in bad faith against a colleague;
- Deliberate and serious damage to property;
- Fraud or deliberate falsification of records (eg in job applications, documents relating to sickness absence, or expense claims);
- Undertaking unauthorised paid or unpaid employment during your working hours;
- Accepting or offering a bribe or other secret payment;
- Serious negligence which causes or might cause unacceptable loss, damage or injury;
- Serious incapacity at work caused by being under the influence of alcohol or drugs;
- A serious breach of confidence;
- Deliberately accessing internet sites containing pornographic, offensive or obscene material;
- Disclosure of any confidential information relating to the Company, especially if such information is subject to a Non-Disclosure Agreement (NDA);
- Serious insubordination or rudeness to managers, colleagues, clients, suppliers or professional contacts;
- Bringing the Company into serious disrepute;
- A serious breach of health and safety rules;
- Conviction on a criminal charge relevant to the employee’s employment, or damaging to the Company’s interests.
- Conviction on a criminal charge relevant to the employee’s employment, or damaging to the Company’s interests.
Where your conduct at work is the subject of a criminal investigation, charge or conviction we will investigate the facts before deciding whether to take formal disciplinary action.
A criminal investigation, charge or conviction relating to conduct outside work may be treated as a disciplinary matter if we consider that it is relevant to your employment.
We will not usually wait for the outcome of any prosecution before deciding what action, if any, to take. Where you are unable or have been advised not to attend a disciplinary hearing or say anything about a pending criminal matter, we may have to take a decision based on the available evidence.
Common disciplinary challenges and solutions
The disciplinary procedures that work for a major enterprise won’t necessarily work for a small team. Here are some of the common challenges I see in a lot of small businesses, and what you can do about them.
Balancing firmness and fairness
One of the trickiest things is striking a balance between being firm and fair.
- Clear communication: Always explain the reason behind disciplinary actions, and why you came to the decision that you did.
- Employee support: Offer resources like training or counselling in response to minor misconduct. People make mistakes, and misunderstandings happen. This gives the employee a chance to grow from the experience.
For more sensitive issues that require a delicate touch, having empathy and respect for confidentiality for everyone involved is key.
Above all, apply the workplace disciplinary policy consistently to everyone.
- Document everything. Have clear, written procedures for all types of disciplinary action.
- Conduct regular sessions for managers
- Review any disciplinary actions taken, and get regular feedback from your employees to make sure they’re applied fairly and equally to everyone
Use technology and HR expertise to make a fair workplace disciplinary policy. Dedicated HR software can help you effectively create and manage your workplace disciplinary policy.
Charlie’s document storage system keeps records of all your workplace policies and helps you make quick policy updates as your needs change. Want to try it? Simply start a free trial today!
If your small business disciplinary policy needs a more hands-on approach, I or another HR advisor at Charlie can help you create a disciplinary policy that fits your core needs and values. Book a free call today, and be on your way to making a disciplinary policy that doesn’t just punish employees, but helps them grow.