What SME’s need to know about the Acas 2026 draft Code of Practice on Disciplinary and Grievance Procedures
If you run or manage a small business, disciplinary and grievance procedures may not be something you think about every day, but when an issue arises, having a fair, practical process matters.
Acas released its draft 2026 Code of Practice on Disciplinary and Grievance Procedures for consultation in July, marking the first full rewrite since 2009. The consultation is open until 23 September 2026, and it is an important opportunity for smaller employers to make their voice heard.
The final Code will influence how workplace concerns are handled and how employment tribunals assess fairness and reasonableness. For small organisations, where time, resources and HR capacity are often stretched, the proposed changes are worth paying close attention to.
1. Early, informal resolution moves centre stage
One of the most significant changes is the greater emphasis on early, informal resolution. Acas is making it clearer that workers and employers should consider informal steps before moving into a formal process, where it is appropriate to do so.
For smaller employers, this is both helpful and important. Handled well, early conversations can resolve concerns quickly, protect working relationships and avoid unnecessary cost or disruption. The key is not to create process for the sake of it, but to make sure conversations are fair, clear and properly recorded.
- Managers must feel confident holding early, human‑centred conversations.
- Organisations will need to document informal steps clearly.
- Jumping straight to formal action could increase tribunal risk, as failure to follow the Code can lead to a compensation uplift of up to 25%.
Point to consider: Is the guidance on informal resolution practical and proportionate for small teams, and do managers have the confidence to hold those early conversations?
This is also where mediation skills or support can be especially valuable. Not every workplace concern needs a formal process, but early conversations still need structure, confidence and care.
2. Clearer recognition of SME resource constraints
The draft Code recognises that not all employers can follow every step in exactly the same way. Tribunals will consider the size and resources of the employer when deciding what was reasonable.
That recognition is welcome. However, employers with limited HR capacity may still need clearer guidance on what is expected in practice. Many small organisations do not have:
- Dedicated HR teams
- Formal investigation capacity
- Multiple layers of management
- Time to produce extensive documentation
Point to consider: Does the Code explain clearly enough how small employers can meet expectations without creating unnecessary burden?
3. Stronger expectations around timeliness, fairness & adjustments
The draft Code places more emphasis on acting promptly, avoiding unnecessary delays and keeping processes fair from start to finish. It also strengthens the guidance on reasonable adjustments and adapting processes to avoid discrimination.
In practice, this means small employers may need to think about:
- Clearer timelines for responding to concerns
- Greater responsibility to consider adjustments for a diverse workforce
- More consistent documentation of decisions and conversations
These are positive expectations, but they need to be supported by simple, workable processes that managers can use confidently.
Point to consider: Are the expectations achievable for smaller organisations, and are the examples of adjustments realistic and easy to apply?
4. New documentation requirements
The draft Code also expects disciplinary and grievance letters to explain what informal steps were taken, or whyinformal action was not appropriate.
This makes early resolution more than good practice. It means employers should be able to show that they considered informal options and kept clear records of decisions and the reasons behind them.
For small employers, this is a good time to review:
- Letter templates
- Manager guidance
- Record‑keeping practices
Point to consider: Do managers have the tools and confidence to record informal steps consistently and proportionately?
5. A more thoughtful approach to suspension
The draft Code takes a more careful approach to suspension. It introduces a necessity test, meaning suspension should only be used where it is genuinely needed.
For employers, this is a useful reminder not to default to suspension, even where allegations are serious. Instead, managers should pause and consider whether there are other ways to manage risk while the issue is investigated.
- Clear justification
- Alternative risk‑management options
- Better communication with employees
Point to consider: Does the Code give enough practical guidance on what “necessary” means for small organisations dealing with real workplace issues?
Once the consultation closes, Acas will propose it’s revised Code and government will consider the responses before any final Code is confirmed and brought into effect. Early indications are that this will be in 2027. In the meantime, there are some practical steps small employers can take now.
What should small employers think about now?
1. Feed into the consultation
This is a useful opportunity for smaller organisations to influence the final Code. Feedback could focus on whether the draft guidance feels:
- Proportionality
- Practicality
- Clarity
- Realistic expectations for small organisations
2. Review your current disciplinary and grievance processes
Look at where early resolution already works well and where managers may need more support, clearer guidance or simple prompts to help them respond confidently.
3. Update templates and documentation
Check whether your letters, notes and manager guidance reflect the proposed expectations around informal steps, reasonable adjustments and clear record keeping.
4. Build manager confidence
Early intervention requires confidence as well as common sense. Managers may benefit from short, practical guidance on early conversations, documentation, fairness and when to seek support.
5. Seek support where needed
External HR and mediation support can help employers prepare for the changes, review current processes and build early-resolution confidence before issues escalate.
Final thought
SME’s are the backbone of our economy. Their realities, e.g. limited resources, close-knit teams and the need for practical and human-centred processes, should help shape the final Acas Code. The consultation is an opportunity to supportfairness and clarity without creating unnecessary burden. If you are unsure how the proposed changes could affect your policies, templates or manager guidance, this is a good time to review your current approach and identify any practical gaps.
Seton HR Solutions 