The effect of the regulations is that the employer is required to show that the minimum statutory procedures - as well as the employee's relevant contractual procedures - are followed when disciplining or dismissing an employee.

The SDDP applies in cases where the employer is contemplating either the dismissal of the employee or taking disciplinary action short of dismissal because of misconduct or incapability.

It is advisable to follow the procedures for all forms of disciplinary action including oral and written warnings.

Three-step procedure

The SDDP outlines a three-step procedure which must be followed: Step 1 is the written statement and invitation to meeting, which requires that the employer must set out the grounds for the dismissal or disciplinary action and send this to the employee. The employee must also be invited to a meeting to discuss the contents of the statement.

Step 2 is the meeting, which must be held between employer and employee before any action is taken (except where the disciplinary action consists of suspension).

Before this meeting takes place, the employer must inform the employee what the basis was for the grounds given in it and give the employee a reasonable opportunity to consider a response to that information.

At the end of the meeting, the employer informs the employee of his decision and notifies the employee of his or her right to appeal the decision.

Step 3 covers the right of the employee to appeal against any decision by the employer. If the employee wishes to appeal, he or she must inform the employer. The employer will then hold a meeting with the employee, with a more senior member of staff hearing the appeal. At the end of the appeal, the employer will inform the employee of his final decision.

No unreasonable delay

At all times throughout the SDDP, each step and action must be taken without unreasonable delay; the timing and location of meetings must be reasonable; meetings should be conducted in a manner enabling both employer and employee to explain their cases and employees must be informed of their right to be accompanied by either a fellow employee or trade union official.

Where the SDDP is followed, it must also conform to the principles of natural justice throughout: the employee should be given an opportunity to state his or her case; the employee should know the nature of the allegations against him; the disciplinary tribunal should act in good faith.

The MDP applies only in the case of dismissals in very limited circumstances. The MDP effectively dispenses with the need for the employer to hold a meeting for the basis of the dismissal to be discussed, but allows the employer to dismiss the employee by a written statement alone.

The employee still has a right of appeal but the requirement to hold the initial meeting is removed.

The MDP should be used only where the dismissal is without notice on the ground of conduct; the employee is entitled to dismiss the employee without notice (or pay in lieu) by reason of that conduct; the dismissal takes place at the time that the employer became aware of the conduct or immediately thereafter and it was reasonable, in the circumstances, to dismiss the employee without conducting any investigation into the act of the misconduct.

Neither the SDDP nor the MDP will apply if the party has reasonable grounds for believing that it would result in a significant threat to him or herself, any person or any property; the party has been subject to harassment and has reasonable grounds to believe that following the procedure would result in further harassment and it is not practicable to commence or comply with the procedure within a reasonable period (eg for reasons of illness, capacity, cessation of the employer's business etc).

Whilst following the statutory procedures, the employer must take care also to ensure that any contractual procedures which relate to disciplinary action and dismissal are also followed.

The employee has a statutory right to be accompanied by a work colleague or trade union official to a disciplinary or grievance hearing.

How much compensation?

A basic compensation award is calculated in units of a week's pay and will usually depend on an individual's age and length of service and level of pay. The maximum possible basic is £8,400 and if an individual is dismissed for certain inadmissible reasons there is a minimum basic award of £3,600.

If a compensation award is to be calculated on the basis of what is just and equitable, matters such as the loss of earnings between the dismissal and the date of the hearing at which the tribunal decides on compensation, the estimated loss after the hearing, ie future loss, expenses incurred as a consequence of the dismissal, the loss of statutory employment protection rights and the loss of pension rights must be taken into consideration.

Award can be reduced The statutory limit is £56,800, but this award can be reduced by the employee failing to mitigate his or her loss.

Supplementary rewards or reductions can be made where the employer/ee failed to take advantage of an appeals procedure and additional awards must be made where an employer fails to comply with a reinstatement/re-engagement order. The current maximum award under this head is £14,560.

The maximum award for breach of contract in the Employment Tribunal is £25,000.

An employee cannot be awarded more than once (ie under multiple heads) for the same wrong.

Note that there are no limits on compensation involving sex, race and disability discrimination dismissals. , nor are there limits on dismissals involving "whistleblowing", or for specified health and safety reasons.

Following a finding of unfair dismissal, an employment tribunal is required to explain to the complainant that an order for reinstatement or reengagement may be made. If the complainant asks for reinstatement or re-engagement the tribunal must consider whether it would be practicable for the employer to comply. An employer can address the tribunal as to whether or not this would be practicable.

Jonathan Exten-Wright is a partner and Eleanor Winslet is a trainee solicitor in the Employment Department of DLA Piper Rudnick Gray Cary UK LLP.