Employment Edit: 6 August 2026

Legal updates

Acas code on disciplinary and grievance procedures

Last week, Acas launched a consultation into proposed changes to its draft Code of Practice on disciplinary and grievance procedures.

The Code is significant as tribunals must take it into account in relevant cases (including unfair dismissal cases relating to misconduct or performance) and can adjust the compensatory award made in such cases by up to 25% where an employer unreasonably fails to comply with the Code. This uplift is going to increase in significance once the cap on unfair dismissal compensation is removed from 1 January 2027.

The proposed changes to the Code include the following:

• Using the term “worker”, rather than “employee” in the majority of relevant places in the Code as Acas believes it is good practice for organisations to follow the Code’s guidance in relation to both workers and employees. In seeking views on this potential change, Acas asks if it may have unintended consequences noting in particular that the power of a tribunal to award an uplift to compensation where the Code is breached only applies to employees.
• Moving the guidance on informal resolution into the body of the Code, meaning that a failure to try and resolve matters informally could be something that a tribunal takes into account in relevant cases. The amended Code does, however, note that informal resolution will not be appropriate in some situations, for example where there are concerns about gross misconduct.
• More detailed guidance on suspending an individual during a disciplinary investigation and the limited circumstances in which suspension may be appropriate.

In the consultation, which closes on 23 September 2026, Acas also seeks views on whether there are issues arising from the use of AI in disciplinary and grievance procedures that Acas should address in the Code or in associated non-statutory guidance. We know that lots of employers are concerned about the impact of employees using AI tools to prepare grievances – this consultation provides an opportunity to have your say on this, in the hope that the updated Code can include some guidance to help make grievances more manageable.

Repaying training costs

A former employee was not required to repay training costs after he left, because the repayment term in his contract amounted to an unlawful restraint of trade.

Mr Watts was employed as a trainee engineer on a salary of £18,000. He signed an agreement in which he agreed to repay training costs of over £8,000 either through work contribution (with a proportion of the debt being written off for every month worked after his first year of employment) or through monthly payments if his employment ended before the debt was written off in full. He resigned after eight months’ employment to take a new job paying £30,000. The employer brought a claim to recover the training costs, alleging breach of the repayment term by Mr Watts.

On appeal, the Court of Appeal held that the repayment term was an unreasonable restraint of trade and was therefore unenforceable. In reaching this conclusion, the Court of Appeal noted that:

• save for redundancy, the repayment obligation arose regardless of the employee’s reason for leaving, including if he was dismissed or if he left for reasons unrelated to using his new skills elsewhere.
• given his salary, the arrangement in effect meant that Mr Watts’s employment would in retrospect have been reduced to an unpaid internship.

For those employers seeking to rely on clawback arrangements for training or similar costs, this case is a useful reminder of the importance of carefully drafting such provisions to ensure that they are reasonable and do not go further than they need to.

(Geeks Limited v Watts)