The answer to the question is that it is a matter of choice for an employer but one which should always be exercised carefully after weighing up the various pros and cons.

If an employer makes a disciplinary procedure contractual, it should be able to require employees to cooperate with the procedure, as a refusal by an employee to take part will amount to a breach of contract. It can also help provide certainty for both the employer and the employee, ensuring that both parties are aware of their rights and obligations relating to the procedure.

But one significant disadvantage to the employer of having a contractual disciplinary procedure is that it will be more difficult for the employer to change it. A change to the procedure would require a change to each employee’s contract and an employer would therefore have to consult with employees and seek their consent to the variation. If employees refused to agree to the changes, then the employer could potentially dismiss them and re-engage them under new contracts, but such a practice would increase the risk of claims for unfair dismissal.

However, the main disadvantage is that, where a contractual disciplinary procedure exists but the employer does not follow it, the employer will be in breach of contract. An employee dismissed on disciplinary grounds where the employer has failed to follow its own contractual disciplinary policy could bring a claim for wrongful dismissal (in other words, a dismissal in breach of contract), although damages for such a breach would normally be limited to payment for the notice period and for the time it would have taken to carry out the contractual disciplinary procedure.

The ability to bring a breach of contract claim would certainly benefit any employee who does not meet the eligibility requirements for bringing a claim for unfair dismissal (currently 2 years’ continuous service). But, if the procedure is not contractual, then the employee would be able to argue only that a failure to follow the procedure should be taken into account in an unfair dismissal claim.