How to handle employee disputes fairly and legally 

Workplace disputes are inevitable. People come from different backgrounds, have varying personalities, and interpret situations through their own lens. While this diversity can be a strength, it can also lead to misunderstandings, disagreements, and occasionally more serious conflicts.

As a business owner or HR professional, your goal isn’t to eliminate all disputes, that’s impossible, but to handle them fairly, consistently, and within the law. Doing so not only maintains trust and morale, but also safeguards your organisation from potential legal claims. For many leaders, having access to dedicated HR support for small businesses can make all the difference in navigating these challenges with confidence.

At SafeHR, the focus is on helping employers build robust processes, ensure legal compliance, and create a workplace culture where fairness isn’t just a buzzword, it’s standard practice. Here’s a comprehensive guide to approaching employee disputes in a way that protects both your people and your business.

1. Put clear policies and procedures in place

The best defence against a messy dispute is a good offence, clear, documented policies that everyone understands. 

Why this matters: 

• Employees know what’s expected of them. 
• Managers have a consistent framework to follow. 
• You can demonstrate fairness and transparency if challenged. 

Your staff handbook should include grievance and disciplinary procedures that are easy to follow and compliant with UK employment law. Policies should: 

• Define what constitutes misconduct and gross misconduct. 
• Outline who handles grievances and at what stage. 
• Explain timeframes for each step of the process. 
• Include rights to accompaniment and appeals. 

If your current handbook is outdated or inconsistent, SafeHR’s expert team can help you update it in line with current legislation and best practice. 

2. Follow the ACAS Code of Practice

In the UK, the ACAS Code of Practice sets the standard for how disciplinary and grievance issues should be handled. While it’s not legally binding, employment tribunals will take it into account, and failing to follow it could result in higher compensation awards against your business. 

Key principles include: 

• Informing the employee of the problem in writing. 
• Giving them the opportunity to state their case before any decisions are made. 
• Allowing them to be accompanied at formal meetings. 
• Providing the right to appeal decisions. 

By embedding the ACAS Code into your policies and training managers to follow it, you not only stay compliant but also show employees that you’re serious about fairness. 

3. Investigate fully and keep records

Before you take any formal action, you must gather the facts. This means conducting an impartial investigation, which could involve: 

• Interviewing the employee concerned. 
• Speaking to witnesses. 
• Reviewing relevant documents, CCTV, or emails. 

Document every step, notes from meetings, evidence collected, and communications sent. If a dispute ends up in a tribunal, this documentation can be the difference between successfully defending your case and losing it. 

SafeHR often supports clients by advising on how to conduct investigations, ensuring they’re thorough, lawful, and unbiased. 

4. Try informal resolution first

Not every dispute needs to become a formal disciplinary matter. In fact, jumping straight to formal proceedings can unnecessarily escalate tensions. 

If the issue is minor, say, a misunderstanding between colleagues or a small breach of protocol, a quiet, informal conversation may be enough to resolve it. This approach: 

• Preserves working relationships. 
• Prevents the stress and disruption of formal processes. 
• Demonstrates that you’re open to dialogue and collaboration. 

However, if informal attempts fail or the matter is serious, you should move to a structured formal process. 

5. Use a structured disciplinary process

When a formal approach is required, structure is key. SafeHR recommends a step-by-step process: 

1. Establish the facts – Conduct your investigation and gather evidence. 
2. Notify the employee – Explain the allegations in writing and invite them to a disciplinary meeting, giving reasonable notice. 
3. Hold the meeting – Present the evidence and allow the employee to respond. They should have the right to be accompanied. 
4. Make a decision – Decide on an outcome that is reasonable, proportionate, and consistent with past decisions in similar cases. 
5. Confirm in writing – Communicate your decision clearly, including reasons, consequences, and the right to appeal. 
6. Allow an appeal – Have another manager (not involved in the original decision) hear the appeal wherever possible. 

This approach ensures fairness, consistency, and compliance with the law. 

6. Act early to avoid tribunal risks

Many disputes escalate simply because they’re left too long without intervention. Addressing issues promptly shows you take concerns seriously and can often stop them from spiralling. 

If a situation does head towards a tribunal claim, ACAS Early Conciliation offers a chance to resolve matters without a hearing. Early engagement can save time, stress, and money. 

7. Don’t forget the human side

Policies and procedures are vital, but so is empathy. Employees involved in disputes are often under significant stress, especially if their livelihood feels at risk. 

Show compassion by: 

• Listening actively. 
• Avoiding assumptions. 
• Communicating clearly and respectfully. 

Even if you must take disciplinary action, handling the matter with dignity can prevent bitterness and protect your reputation as an employer. 

8. Bring in expert help when needed

Some disputes, particularly those involving allegations of discrimination, harassment, or whistleblowing, can be complex and high-risk. Getting it wrong could mean costly legal consequences and reputational damage. 

SafeHR offers: 

• Expert advice on handling grievances and disciplinaries. 
• Support with investigations and documentation. 
• Mediation services to help resolve disputes amicably. 
• Policy reviews and updates to keep you compliant. 

By involving professionals, you gain peace of mind that you’re acting fairly, legally, and strategically. 

Final thoughts 

Employee disputes can feel daunting, but they don’t have to derail your business. With the right policies, consistent processes, and a fair approach, you can navigate conflicts confidently and protect both your people and your organisation. 

If you’re looking to strengthen your approach to dispute resolution, review your current policies, or get hands-on support with a live issue, SafeHR’s experienced team can help you every step of the way.