A New Era for Workplace Disputes? ACAS Consults on Code Changes

ACAS has launched a consultation on a new draft Code of Practice on Disciplinary and Grievance Procedures, representing the first comprehensive review of the Code since 2009. The consultation opened on 30 July 2026 and closes on 23 September 2026. If adopted, the new Code will replace the current version and is likely to have significant implications for employers' HR and employee relations practices.

While the draft Code retains the fundamental principles of fair disciplinary and grievance procedures, it places much greater emphasis on the early and informal resolution of workplace concerns. ACAS has highlighted research suggesting that formal disciplinary and grievance procedures cost UK employers approximately £2.36 billion each year, whereas resolving issues informally is substantially less costly and can help preserve working relationships. 

The core principles remain familiar:

• Prompt handling of issues.
• Thorough investigation of the facts.
• Informing workers of allegations and potential consequences.
• Allowing individuals to present their case.
• Acting reasonably and fairly.
• Providing a right of appeal. 

Perhaps the most significant development is the expectation that employers will actively consider informal measures before commencing formal disciplinary or grievance procedures.

Examples include:

• Informal discussions and facilitated conversations.
• Mediation.
• Additional support, training or coaching.
• Clarifying expectations regarding conduct or performance.
• Exploring reasonable adjustments where appropriate. 

Under the draft Code, employers may need to explain what informal steps have been taken before moving to a formal process, or alternatively, why informal resolution was not appropriate in the circumstances. 

The proposed Code introduces additional guidance in several areas, including:

• Use of suspension.
• Reasonable adjustments.
• Manager training and capability.
• Mediation and facilitated discussions.
• Disciplinary and grievance correspondence. 

The draft Code also replaces references to "employees" with "workers" throughout much of the document, reflecting a broader scope of application. However, the Employment Tribunal's power to adjust compensation by up to 25% for unreasonable non-compliance with the Code remains linked to employee claims. 

Employment Tribunals must take the ACAS Code into account when considering relevant claims. A failure by an employer or employee to follow the Code can result in compensation awards being increased or reduced by up to 25%. The proposed revisions therefore have potentially significant legal and financial consequences. 

The timing is also significant. The proposed changes coincide with wider reforms under the Employment Rights Act 2025, including the forthcoming day-one unfair dismissal regime due to take effect from January 2027. Many commentators anticipate an increase in workplace disputes and tribunal claims, making effective workplace conflict resolution more important than ever. 

Although the revised Code is not yet in force, employers should begin preparing by:

• Reviewing disciplinary and grievance policies and procedures.
• Assessing whether managers are equipped to handle workplace concerns informally.
• Considering mediation and alternative dispute resolution processes.
• Training managers on early intervention and conflict management.
• Monitoring the outcome of the ACAS consultation and any final version of the Code. 

The proposed ACAS Code signals a shift away from an automatic reliance on formal processes and towards a culture of early intervention, informal resolution and constructive workplace dialogue. Employers that invest in effective conflict management now are likely to be better placed to manage risk, maintain employee relations and comply with the evolving employment law landscape. 

This bulletin reflects the draft ACAS Code currently under consultation and not yet in force. Employers should await publication of the final Code before making definitive procedural changes.