Ten steps to an effective disciplinary procedure

Managing employee behaviour and performance is essential to the success of your business. When things go wrong—whether due to misconduct, underperformance, or breaches of company policy—a clear, fair, and consistent disciplinary procedure is crucial.

Not only does this protect your business, but it also ensures employees are treated fairly and given the opportunity to address issues before serious action is taken.

Here’s a step-by-step guide to implementing an effective disciplinary procedure in line with Australian employment laws and best practices. If you need help with any part of the procedure, you can contact HR and employment relations experts through our 24/7 advice line. 

Step 1: Establish a clear disciplinary policy

Before any disciplinary action takes place, it’s essential to have a written disciplinary policy in place. This policy should be outlined in your employee handbook or contract and communicated to all staff. It should cover:

• The behaviours and actions that may lead to disciplinary action (e.g., misconduct, poor performance, absenteeism, etc.)

• The steps of the disciplinary process

• The possible outcomes of disciplinary action, such as warnings or dismissal

Step 2: Identify the issue

The first step in any disciplinary procedure is identifying the problem. This could be an issue with an employee’s performance, conduct, or behaviour, such as:

• Repeated lateness or absenteeism

• Failure to meet performance targets despite support

• Breaches of company policy (e.g., health and safety)

• Gross misconduct, such as theft or harassment

Once the issue has been identified, it’s important to assess whether it can be handled informally or if formal disciplinary action is necessary.

For more information on disciplinary issues and the actions you can take, see what is a disciplinary at work?

Step 3: Conduct an investigation

After you have identified the issue, the next step is to carry out a thorough investigation. This is a key part of the disciplinary procedure as it ensures that any action you take is based on clear facts and evidence.

During the investigation, you should:

• Gather all relevant information, such as performance data, timekeeping records, emails, or witness statements

• Speak to relevant parties, including the employee involved and any witnesses

• Keep detailed records of the investigation

The investigation should be fair, impartial, and timely. In cases of gross misconduct, you may decide to suspend the employee while the investigation takes place, but this should be on full pay and should not imply guilt.

For more information on the investigation, see Disciplinary Investigations.

Step 4: Attempt to resolve informally

After your investigation if the issue is minor, an informal discussion with your employee may be all that’s needed. This can involve a private conversation where you:

• Explain the issue and why it is a problem

• Give the employee a chance to respond and explain their side

• Offer support, guidance, or additional training if necessary to help the employee improve

Many small problems can be resolved through this approach, without the need for formal action. However, make a note of the conversation in case the issue persists, and formal steps are required later.

Step  5: Invite the employee to a disciplinary hearing

If the investigation reveals sufficient grounds for formal disciplinary action or the informal approach has failed, you must invite the employee to a disciplinary hearing. This invitation should be in writing and must include:

• The date, time, and location of the hearing

• A clear explanation of the allegations and the evidence gathered

• The potential outcomes of the hearing (e.g., a warning, dismissal)

• The employee’s right to be accompanied by a colleague or trade union representative

The employee should be given reasonable time to prepare their case and gather any relevant evidence or witnesses they want to bring to the hearing.

Step 6: Hold the disciplinary hearing

The disciplinary hearing is a formal meeting where the employer and employee discuss the issue. This is the employee’s opportunity to present their side of the story, challenge the evidence, and offer explanations or mitigating factors.

During the hearing:

• Clearly outline the issue and present the evidence you have gathered

• Give the employee the chance to respond, explain their actions, and provide any evidence or witnesses

• If the employee has a representative, they can support and advise but not answer questions on the employee’s behalf

Ensure the hearing is conducted fairly, respectfully, and without bias. Depending on the complexity of the case, you may need more than one hearing.

Step 7: Make a decision

After the hearing, it’s important to take time to carefully review the evidence, the employee’s response, and any mitigating circumstances before making a decision.

Do not make the decision during the hearing itself—this gives the appearance of bias and undermines the fairness of the process.

Possible outcomes of a disciplinary hearing could include:

• No further action if the evidence does not support the allegations

• A verbal or written warning for less serious issues

• A final written warning for more severe or repeat misconduct

• Dismissal for gross misconduct or failure to improve after previous warnings

If the decision involves dismissal, you must ensure that the process has been fair and that you have followed both your company’s procedures and those set under the Fair Work Act 2009.

Step 8: Communicate the disciplinary outcome

The outcome of the disciplinary hearing should be communicated to the employee in writing. This letter should include:

• The decision and the reasons behind it

• The steps the employee needs to take to improve (if applicable)

• The consequences of further misconduct or failure to improve

• The employee’s right to appeal the decision and the process for doing so

Make sure the letter is clear, professional, and outlines the next steps in the process.

Step 9: Offer the right to appeal

While not a legislative requirement, it's best practice to give employees the opportunity to appeal any disciplinary decision if they believe it was unfair or if new evidence comes to light. Your disciplinary procedure should clearly outline the appeal process, including:

• How to submit an appeal and the timeframe for doing so (typically within 21 days)

• Who will handle the appeal (an impartial person not involved in the original decision)

• The format of the appeal hearing, which should be a fresh and fair review of the case based on all available evidence

Providing a clear, fair appeal process aligns with procedural fairness principles and helps maintain trust and transparency in the workplace. It also reduces the risk of disputes escalating to the Fair Work Commission or other tribunals. While the Fair Work Commission handles appeals of its own decisions through a formal process requiring permission to appeal, your internal appeal process is a vital part of effective disciplinary management for Australian SMEs.​

Step 10: Follow up

Once disciplinary action has been taken, it’s important to follow up with the employee to ensure they have the support they need to improve. If a warning was given, you may set a timeframe for monitoring their performance or conduct, offering feedback and support along the way.

This demonstrates that the aim of the disciplinary process is to help the employee succeed, not simply to punish them.

Get your disciplinary procedure right

A clear and fair disciplinary procedure is essential for managing employee issues in a way that is legally compliant and respectful to your staff. By following these steps—investigation, hearing, decision, and appeal—you ensure that any action taken is based on evidence and carried out in line with Australian employment laws.

This helps protect your business from potential legal claims while providing employees with the opportunity to correct their behaviour and continue contributing positively to your organisation.

And to help you make sure your procedure is right, fair and in line with law—we’ve got you covered. With 24/7 HR and employment relations advice and a comprehensive HR library packed with policies, templates and disciplinary documents, all designed to save you time and keep your business in line with the law.

Book a free demo to see for yourself how BrightHR can help you and your business today!