The current Code has been in place since 2009, and this new draft aims to bring the Code in line with how workplace dispute resolution has developed since then, including a greater emphasis on informal resolution, mediation, reasonable adjustments and manager capability.
Key Proposed Changes in the ACAS Code of Practice Draft
Informal resolution moves inside the Code
At present, informal resolution is only referenced in the Foreword to the Code, which carries less weight in tribunal decisions than the body of the Code itself. The draft moves informal resolution into the statutory Code, which, if adopted, failure to attempt informal resolution, without good reasons, could, for the first time, be treated as an unreasonable failure to comply with the Code, and could therefore factor into the section 207A uplift on compensation.
New letters requirement
The draft introduces a new requirement that disciplinary invitation letters and grievance letters must state what informal steps have been taken, or explain why none were. This would make the informal resolution obligation an explicit paper trail, rather than something that could be quietly bypassed.
Suspension: a new necessity test
Existing case law already establishes that suspension is not a neutral act. The draft codifies this position by introducing a ‘necessity test’, meaning suspension would only be appropriate in limited circumstances rather than as a default response to serious allegations.
Terminology: “worker” replaces “employee”
The draft uses the term “worker” throughout in place of “employee”, which would widen the scope of who is covered by the Code. However, the section 207A power to adjust compensation remains employee-only under statute. This would create a scope mismatch between the Code’s coverage and the tribunal remedy, which employers who engage workers on non-employee contracts (contractors, casual workers, gig arrangements) would need to think through carefully.
New sections on reasonable adjustments, manager training and mediation
The draft adds new sections on reasonable adjustments in disciplinary and grievance processes, expectations around manager training, and the use of mediation and facilitated conversations, with formal processes potentially paused while mediation is underway. These are areas that have developed in practice and case law over the last decade, and codifying them would raise the bar on what tribunals treat as a reasonable employer response.
What this could mean for employers
If the draft is adopted broadly as written, employers would be expected to demonstrate they had attempted informal resolution and considered mediation before moving to a formal process. Managers would need clearer training on when a matter should be handled informally and how to run those conversations constructively. Documentation, particularly disciplinary and grievance letters, would need to reflect the informal steps taken.
For SMEs, the biggest area of exposure is manager capability. A manager who is not trained to recognise when an informal conversation is the right response, or how to run one, or document one, will struggle with the expectations the draft sets. Preparing now, while the current Code is still in force, buys time to build that capability rather than react to a published change. A lot of the draft, could actually be seen as best practice, so why not plan to build that capability anyway.
What SME employers can do now
Read the draft Code and the consultation questions on the ACAS website. If you have a view on any of the proposed changes, you can respond to the consultation before 23 September 2026.
Audit your existing grievance and disciplinary policies against the draft to understand where the biggest gaps would be if the draft was implemented.
Consider whether your managers are aware of the current Code and have had formal training on running difficult conversations and handling early-stage disputes. Good management development is where the informal resolution obligation lives or dies in practice.
If your grievance and disciplinary letter templates are due a refresh anyway, the draft is a useful reference point for the kind of information the Code is potentially moving toward requiring. Our HR shop has policies and templates to help.
How Limelite Can Help
Our team includes professionally qualified mediators, and we support SMEs across Worcestershire, the West Midlands and the wider UK on grievance and disciplinary matters, policy reviews, manager training and mediation.
If you would like to talk through what the draft could mean for your business, or you would like help with a current dispute, take a look at our HR support for complex employee issues or our retained HR support.
Book a free 30-minute discovery call to talk it through with us.
Book a free 30-minute discovery call
Related reading
What Your Employment Contract Must Include. Understand the foundations of every employment relationship and what UK law requires.
Employment Rights Act 2025: The Changes SMEs Need to Act On Now. What the biggest UK employment law reform in a generation means for SME employers.
About the author
Laura Weston MCIPD is a Director at Limelite HR & Learning. She specialises in employment law, HR compliance, change management and policy support, helping organisations navigate complex people challenges with confidence. Connect with Laura on LinkedIn.
