Most small employers dread their first disciplinary. There’s no HR department to lean on, the person involved may have worked with you for years, and a mistake in the process can cost more than the original problem. The procedure itself is short, though, and it’s set out in a national code anyone can read. This guide walks through each stage, from the informal chat to the appeal, and covers the paperwork you’ll need if a claim follows.

Start informally where you can

Not every problem needs a formal process. If someone is late a few times, or their standards have slipped, a private conversation will often fix it. Say what you’ve noticed, ask if there’s a reason, agree what needs to change, and make a note of the date and what was said.

Formal action is for cases where the informal route hasn’t worked, or where the matter is too serious to start there. Theft, violence and serious breaches of safety rules fall into that second group.

Two kinds of problem look similar but need different handling. Misconduct is a breach of the rules, such as lateness, unauthorised absence or rudeness to customers. Poor performance is where someone is trying but isn’t reaching the standard. This guide covers the formal route for both, but poor performance usually needs support and a chance to improve before any warning.

The Acas Code and why it matters

The Acas Code of Practice on disciplinary and grievance procedures sets out what a reasonable employer does. It isn’t law in itself, but tribunals take it into account in any unfair dismissal claim, and they can raise a compensation award by up to 25% if you unreasonably failed to follow it. They can also reduce an employee’s award by the same amount if the employee ignored it.

A rewritten Code is on the way (see section 10), but for now the 2015 version still applies.

Investigating first

Before you start any formal process, find out what happened. Do it promptly, because evidence goes stale quickly and the employee will worry while they wait.

An investigation meeting isn’t a disciplinary hearing, and it shouldn’t lead straight to a sanction. Its job is to establish whether there’s a case to answer.

Inviting the employee to a meeting

If the facts suggest there is a case to answer, tell the employee in writing. The letter should say:

• What the allegation is, in enough detail for them to understand and respond to it.
• What could happen, including that dismissal is possible if it’s a serious matter.
• When and where the meeting will be, with enough notice for them to prepare. A few working days is the usual minimum.
• The evidence you’ll rely on, with copies of documents and any witness statements.
• Their right to be accompanied by a colleague or trade union representative.

Sending the allegation on the morning of the meeting, or springing new evidence on the day, is one of the most common reasons these cases go wrong.

Holding the meeting

Choose a private room and allow enough time. Explain the allegation, set out the evidence, and give the employee a proper chance to respond, ask questions, put forward their own evidence and call relevant witnesses. Employees should tell you beforehand if they want to call any.

The right to be accompanied. Where a meeting could result in a formal warning or other action, the employee has a legal right to bring a work colleague or trade union representative. If their chosen companion can’t attend on the proposed date, you must postpone the meeting to a time the employee proposes, provided it falls within five working days of the original date. The companion can address the meeting, sum up and confer with the employee. They can’t answer questions for them.

Make adjustments where someone needs them, for example if they have a disability, a health condition or a language barrier. Failing to do so can lead to a separate discrimination claim.

Deciding and issuing a warning

After the meeting, decide whether the allegation is made out and whether action is justified. Tell the employee the decision in writing. If you’re issuing a warning, say:

• what the problem was
• what needs to change, and by when
• how long the warning stays live (often six to twelve months)
• what happens if the problem continues

The sanction has to fit the offence. A warning for a first occasion of minor lateness is reasonable, and dismissal for it isn’t. Think about how you’ve dealt with similar cases before, because treating people inconsistently can make a fair decision look unfair.

Dismissal and gross misconduct

Dismissal is the last step, and the decision should be made by someone with the authority to do so. The employee needs to be told the reason, the date employment ends, their notice period and how to appeal.

Gross misconduct is conduct serious enough to destroy the trust between you, such as theft, fraud or violence. It can justify dismissal without notice for a first offence. You still have to follow a fair process. That means investigating, holding a meeting and letting the employee respond before you decide. A dismissal that skips those steps is likely to be unfair, however bad the conduct.

If a dismissal is for redundancy instead, a different process applies. Our guide to redundancy for small employers covers it. If the problem is long-term sickness, see our statutory sick pay guide, because absence through illness is handled differently from misconduct.

Appeals

Employees who’ve been given a warning or dismissed should be able to appeal. Ask them to put the appeal in writing and explain their grounds, and hear it promptly. Wherever possible, someone who wasn’t involved in the original decision should hear it and look at the matter afresh. The employee is again entitled to be accompanied. Confirm the outcome in writing.

An appeal can reduce, confirm or overturn the original decision. A well-run appeal also gives you a second chance to spot a mistake before it reaches a tribunal.

Keeping records

If a claim is made, your records are your evidence. Keep:

• Notes of informal conversations, with dates
• The investigation notes, witness statements and evidence
• Every letter sent to the employee
• Notes from the meeting, ideally agreed with the employee
• The decision and the reasons for it
• Appeal papers and the outcome

These contain personal data, so store them securely and don’t keep them longer than you need to. Our GDPR guide for small businesses explains how long and why.

Changes to the rules

Several changes affect disciplinary cases, and some dates may still move.

• Tribunal time limits. From 1 October 2026 the time limit for bringing most employment tribunal claims rose from three months to six. If the problem began before that date, the old limit can still apply.
• Unfair dismissal. The qualifying period is due to drop from two years to six months for dismissals on or after 1 January 2027, and the cap on compensation is due to go. Claims such as discrimination and whistleblowing never needed a minimum length of service.
• A new Acas Code. Acas issued a draft revised Code in July 2026, and consultation closed in September. It hasn’t been finalised. Among other things, it would encourage early, informal resolution and update guidance on companions.
• Fire and rehire. Dismissing someone to re-engage them on worse terms is due to become automatically unfair in most cases, from March 2027.

Check GOV.UK or Acas before relying on any of these dates.

Common mistakes

Useful resources

• Acas — Code of Practice on disciplinary and grievance procedures
• Acas — Employment Rights Act 2025 changes
• Our guide to redundancy for small employers — when the role is going, not the person
• Our guide to hiring your first employee — contracts and paperwork
• Our GDPR guide for small businesses — keeping employee records safely