The disciplinary procedure for a small business: the Acas Code, step by step
Fifteen people, no HR department, and a problem that informal chats haven't fixed. Here's the fair procedure the law expects from you anyway - each step sized for a small company, with the letters you'll need to write.
There's no small-business exemption from fair process. The Acas Code of Practice sets the minimum: establish the facts, inform the person in writing, hold a meeting without unreasonable delay, allow a companion, decide and confirm in writing, and offer an appeal to someone not previously involved. Tribunals can adjust awards by up to 25% for unreasonably failing to follow it - and from 1 January 2027 employees can claim unfair dismissal after just 6 months' service, so the procedure matters earlier in every employment. First, though: check it's actually a conduct issue and not a capability one - they take different routes.
What does a fair disciplinary procedure look like in a 15-person company?
The Acas step-by-step starts before the formal procedure does: for most first-time, lower-level issues, a private informal conversation is the right opening move, and often the last one needed. When informal hasn't worked, or the issue is too serious for it, the formal steps run like this:
- Investigate. Establish the facts before forming a view - gather documents, talk to anyone involved, write down what you find. In a small company this can be one manager and a few hours; it must not be the same person who later hears the case, if you can possibly avoid it.
- Invite in writing. A letter or email with the specific allegations, the evidence, the possible outcomes, the hearing details and the right to be accompanied. Skeleton wording below.
- Hold the hearing without unreasonable delay. Explain the evidence, then genuinely listen. The employee responds to each allegation, calls their own evidence and asks questions. Someone takes notes.
- Decide, then confirm in writing. Decide after the hearing, not before it. The outcome letter states the decision, the reasoning, any warning's duration, and the right of appeal.
- Hear the appeal impartially. The Code says appeals should be dealt with "impartially and, wherever possible, by a manager who has not previously been involved in the case".
| Step | In a 15-person company | Written record |
|---|---|---|
| 1. Investigate | A manager not connected to the incident; hours, not weeks | Short investigation note + any statements |
| 2. Inform in writing | Letter or email from whoever will chair the hearing | The invite letter, with evidence attached |
| 3. Hold the hearing | Chair + note-taker; employee + companion; private room | Meeting notes, shared afterwards |
| 4. Decide & communicate | Chair decides after the hearing - never before | The outcome letter |
| 5. Offer an appeal | A director or owner who has stayed out of it - or an external consultant | Appeal letter + appeal outcome letter |
The hardest row for a small company is the last one - which is why you plan the cast before step 1. If the owner investigates, chairs and decides, nobody impartial is left for the appeal. Split the roles on day one, even if it feels like overkill for fifteen people.
What must the disciplinary invite letter contain?
The Code is specific: the notification must carry "sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case", plus "copies of any written evidence, which may include any witness statements", the time and venue, and the right to be accompanied.
"I am writing to invite you to a disciplinary hearing on [date, time] at [place], with [chair's name]. The hearing will consider the following allegation(s): [specific and dated - e.g. 'that on 14 and 21 July you made deliveries without completing the safety checklist, contrary to the depot procedure']. I enclose the evidence we will rely on: [investigation note, statements, records]. If upheld, the possible outcomes include [first written warning / final written warning / dismissal]. You have the right to be accompanied by a fellow worker or a trade union representative. Please confirm you can attend, and tell us in advance about any evidence or witnesses you wish to raise."
The commonest failure is vagueness. "Your recent conduct" and "poor attitude" give the person nothing to answer - and an allegation nobody could prepare against is the start of an unfair procedure, whatever happens later.
What should the outcome letter and appeal look like?
Two more letters finish the process properly. Neither needs legal prose - they need the decision, the reasons, and the road ahead:
"Following the hearing on [date], I have decided that the allegation that [allegation] is [upheld / not upheld / partially upheld], because [the key reasoning, referencing what was said at the hearing - including the parts of the employee's account you accepted]. The outcome is [no action / a first written warning, which will remain active for [6] months / a final written warning, active for [12] months / dismissal with notice, ending your employment on [date]]. [For warnings: what improvement is expected, and what happens if the issue recurs.] You have the right to appeal this decision: please write to [name] within [5] working days setting out your grounds."
The employee appeals in writing with their grounds - new evidence, procedure complaints, or the severity of the sanction. It is heard without unreasonable delay by [director/owner name], who has had no prior involvement, and may confirm, reduce or overturn the outcome (an appeal should never be used to increase it). The result is confirmed in writing: "Having reviewed [the grounds], I have decided to [uphold / vary / overturn] the original decision because [reasons]. This decision is final."
What happens if we skip the Code - the 25% uplift
Two costs. First, skipped procedure is usually what makes a dismissal unfair at all: tribunals judge how you dismissed at least as hard as why. Second, where a claim succeeds, the tribunal can adjust the award "by up to 25 per cent" for an unreasonable failure to comply with the Code - a surcharge on top of the underlying award, applied precisely when you've already lost. And the population who can bring claims is about to grow: from 1 January 2027, six months' service is enough, and the compensatory award cap goes at the same time. The procedure above costs perhaps two weeks and three letters. It is the cheapest insurance in employment law.
What mistakes do small businesses make most?
- One person plays every role. Investigator, judge and appeal court in one chair - the most common structural failure, and the most avoidable.
- The decision precedes the hearing. If the outcome letter could have been written before the meeting, a tribunal will usually be able to tell.
- Sacking on the spot. Even suspected gross misconduct needs investigation and a hearing first. Suspension on full pay is the holding move, not dismissal.
- Treating a capability problem as conduct. Disciplining someone for what they can't do skips the support a fair capability process requires - our capability vs conduct guide covers the test, and the PIP template covers the right route.
- No notes. A year later, memory is not evidence. Date every conversation, keep every letter.
- Forgetting the companion. The right to be accompanied is statutory; leaving it out of the invite - or refusing it at the door - is a self-inflicted wound.
How CoDash keeps the file for you
Every step above turns on the record: who was told what, when, in writing. CoDash's ER case records keep the investigation notes, letters, hearing notes and outcomes on one timestamped trail per case - built as you go, not reconstructed under pressure eleven months later. See how it fits together.
Frequently asked questions
Does a small business have to follow the Acas Code?
Yes - it applies to employers of every size, with no small-business exemption, and tribunals can adjust awards up to 25% for unreasonably failing to follow it. Process can be proportionate to your size; the spine cannot be skipped.
What must a disciplinary invite letter contain?
Specific allegations and their possible consequences, copies of the evidence including witness statements, the time and venue, and the right to be accompanied. Vagueness is the classic failure.
Can an employee bring someone to the meeting?
Yes - a statutory right to be accompanied by a fellow worker, a trade union representative, or an official employed by a trade union. State it in the invite letter.
Who hears the appeal when there's no HR department?
Someone impartial and, wherever possible, not previously involved - in practice a director or owner who stayed out of the earlier steps, or an external HR consultant. Plan the cast before step one so someone is left.
What if we skip the procedure entirely?
Skipped procedure usually makes the dismissal unfair in itself, and a successful claim can then be uplifted by up to 25% for the Code failure. From January 2027, six months' service is enough to claim.
Keep reading: All 66 HR guides · 30 free templates · 24 calculators
Fair process, on the record
CoDash keeps ER case records - investigation notes, invite and outcome letters, hearing notes and appeals - on one timestamped trail, so the fair procedure you followed is the fair procedure you can prove. Try it in the demo.
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