Workplace Conflict Is Changing. Is Your Business Ready?
Disagreements at work are an unfortunate reality for every business. Whether it’s a disciplinary issue or a grievance, how you respond can have a lasting impact, not just on the individuals involved, but on your legal risks too.
That’s why employers need to take notice of ACAS’ latest draft Code on Disciplinary and Grievance Procedures, published for consultation on the 30th of July 2026.
It’s the most significant update to the Code in the last 15 years, and the proposed changes send a clear message. Resolving workplace conflict early, fairly and constructively is becoming more important than ever, not just good practice, but increasingly the standard tribunals will judge you against.
The Financial Risk You Cannot Afford to Ignore
Here’s the bit that should get every employer’s attention. Under the existing rules, tribunals can already adjust compensation awards by up to 25% where a party has unreasonably failed to follow the Code. What’s changing is that informal resolution, currently only mentioned in the Code or Workplace Policies as an option, is now being proposed to become a statutory obligation.
In practice, this means that failing to attempt informal resolution before jumping to formal proceedings could, for the first time, factor into that 25% uplift or reduction. Getting the early stages right isn’t just about good working relationships anymore; it has a direct financial consequence attached to it.
What’s Changing in Practice
We have outlined a few of the proposed changes below, because they are likely to affect how your existing policies and letters are worded (please note these are only proposed changes presently, but will likely come in to force in the very near future):
New letters requirement.Disciplinary invitation letters and grievance letters will need to state what informal steps were taken to resolve the issue, or explain why none were.
A necessity test for suspension.Suspension should only be used in limited, specific circumstances, formalising what case law has already established, that suspension is not a neutral act.
The term ‘Worker’ replaces ‘Employee’ throughout the Code, widening who the guidance applies to, although the 25% uplift power itself remains employee-only under existing legislation.
New sections on reasonable adjustments, manager training, and mediation, with formal disciplinary or grievance processes potentially paused while mediation takes place.
Why This Matters
Formal disciplinary and grievance procedures don’t just take time. They consume management resources, affect productivity, create substantial financial costs and can have a significant impact on employee wellbeing.
When conflict isn’t addressed quickly or appropriately, it can damage working relationships, lower morale, and increase the likelihood of grievances, tribunal claims, or employees leaving the business altogether. The proposed changes reflect a growing recognition that supporting positive workplace relationships benefits everyone involved.
A Natural Link to Reasonable Adjustments
The new section on reasonable adjustments is particularly relevant if any of your workforce is neurodivergent. Concerns, conduct issues, or communication difficulties sometimes stem from a lack of the right adjustments being in place, rather than a genuine conduct or performance problem. Getting this right early, before a situation escalates to a formal process, protects both the employee and the business.
What Should Employers Be Doing Now?
Although the consultation is still open, now is a good opportunity to review your current approach to handling workplace concerns. Ask yourself:
Do your managers feel confident handling difficult conversations?
Are your disciplinary and grievance procedures up to date?
Could some workplace issues be resolved more effectively through informal resolution or mediation?
Are you creating opportunities to resolve concerns before they escalate?
Are reasonable adjustments genuinely being considered before a conduct or performance issue becomes formal?
Preparing now will put your business in a much stronger position, whatever the final version of the Code looks like. The consultation closes on the 23rd of September 2026, and you can read the full draft Code on the ACAS website.
How Inspired HR and Inspired Minds Neurodiversity Services Can Help
At Inspired HR, we work alongside businesses to help them manage workplace concerns with confidence, whether that’s reviewing your disciplinary and grievance policies, training your managers to handle difficult conversations, or providing mediation to resolve conflict before it escalates.
Where neurodiversity is part of the picture, Inspired Minds Neurodiversity Services works alongside our HR team to make sure reasonable adjustments are properly considered from the outset, not added as an afterthought once a process has already begun
What sets our mediation apart is that it can include a DISC profile or neurodiversity screening as part of the process. This gives real insight into each individual's behaviour, communication style and preferences, so we can hit the ground running for a successful resolution.
If you’d like support reviewing your current approach ahead of these changes, get in touch with our team.