Our Policies Conduct and Capability

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1. SCOPE AND AIM The Conduct and Capability policy applies to all colleagues in Kelda Group Ltd and its wholly owned group companies in the UK, including Yorkshire Water Services, Keyland Developments, and Kelda Water Services which includes KWS Alpha, KWS Defence and KWS Grampian and Loop. People play a vital part in the success of our business. This Policy has been developed to ensure that there is a strong management framework and key principles to support people at work. The purpose of the policy is to allow managers to deal effectively with colleagues when their conduct, performance or attendance falls below acceptable standards. It provides an infrastructure of guidance and rules in which people can operate effectively, and should ensure that the organisation will comply with the relevant employment law. Through close partnership with its people and Trade Unions, the organisation will endeavour to meet its responsibility to provide clear direction and a safe, supportive environment in which colleagues can utilise their skills and abilities to drive the business forward. 2. OVERVIEW “Capability” covers the areas where an individual becomes incapable of carrying out their duties due to either unsatisfactory work performance or incapacity due to sickness absence whereas “Conduct” covers misconduct issues, for example: poor timekeeping, breach of Company rules or theft. It is the responsibility of management to initially select and then provide each employee with the appropriate induction, training, guidance, support and coaching in order to do their jobs to the best of their capabilities, within the opportunities arising. There is a clear responsibility on everyone to ensure an environment that is safe from harm of both a physical and psychological nature. We should also respect the diversity that people bring to the job by recognising that differences in cultures, perceptions, experience etc. all combine to enrich the working operation. Management will rigorously ensure that employees operate in an environment free from bias, discrimination, harassment and bullying, where opportunities and standards are the same for all. It is also the responsibility of all employees to ensure that they meet the company requirements for a competent workforce by ensuring that they accept guidance and training through the formal and informal processes available to them. All employees should take full responsibility for their own conduct, professionalism and personal development and in doing so, take feedback and guidance in the spirit of continuing improvement. 3. HOW TO USE THIS POLICY This overall Conduct and Capability policy includes three separate procedures; discipline, sickness absence and performance improvement. Whilst they share a similar approach and principles, it is important to understand that they are not interchangeable. Whilst some issues may appear to be similar it is not possible to move from one stage in one to the next stage in another. It may be, however, that more than one process is being applied to an individual at the same time. For issues of misconduct the disciplinary policy (Part 1) should be followed. Examples of misconduct are; continued lateness, failure to follow management instruction, abuse of the company computer systems, negligence, unauthorised absence, theft and inappropriate behaviour. Where the issue involves absence through illness then the sickness absence policy (Part 2) should be followed. In these instances an employee should be dealt with sympathetically and offered support. However, unacceptable levels will still be managed through a formal procedure.

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Finally when the issue involves the individuals’ performance, in particular their capability to perform the role, then the performance improvement policy (Part 3) should be followed. 3.1 Previous Procedures The procedures set out in this document are effective from 1 July 2004 and were amended on 1st June 2008. These procedures replace all previous disciplinary and absence management policies including version 1 of the Conduct and Capability Policy which was effective between 1 October 2002 and 30 June 2004. 4. PRINCIPLES The overall principles to be adopted are as follows:-

• Conduct and capability matters will be handled consistently, fairly, without discrimination and with careful consideration being given to the individual circumstances in each case.

• At all stages in the process those involved will respect the confidentiality of the issues and people

involved.

• Any formal action will only be taken by a person with the appropriate authority. The immediate manager or the manager at the next level upwards will normally carry out first/second stage warnings or review meetings. More serious decisions i.e.: final written warning and dismissal will normally be heard by a more senior manager than the investigatory manager, but in any case, the manager holding the disciplinary hearing must not have been involved in the investigatory stage.

• An employee will have the right to appeal against any formal action taken against them.

Employees may be represented or accompanied at formal investigatory or disciplinary meetings with management by a trade union representative or fellow employee at any stage of the procedures. Employees will be advised of this right and it is their responsibility to make any necessary arrangements. Further principles will apply to individual sections of this policy.

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PART 1 - DISCIPLINARY Index Section 1 Disciplinary Policy 4

1.1 Introduction 4 1.2 Disciplinary principles 4 Section 2 Disciplinary Procedure 6

2.1 Investigation 6 2.2 Precautionary suspension 6 2.3 Disciplinary hearing 7

2.4 Disciplinary outcomes 8

2.4.1 No action 8 2.4.2 First stage warning 8 2.4.3 Second stage warning 9 2.4.4 Final written warning 9 2.4.5 Dismissal 9

2.5 Expired warnings 10

2.6 Redeployment 10

2.7 Appeals against disciplinary action 10

2.8 Effective date of termination 11 2.9 Pay for performance 11 2.10 Gross misconduct 12 2.11 Role of person accompanying at the hearing 13 2.12 Records of the meeting 13 2.13 Grievance / claims of harassment 14 2.14 Sickness absence 14 2.15 Flowchart of disciplinary procedure 15

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SECTION 1 - DISCIPLINARY POLICY 1.1 Introduction The success of the business depends on all colleagues operating together in an environment:-

• which features good working relationships; • where our Values and Behaviours are consistently demonstrated; • which values service to customers and; • within which people demonstrate commitment, competence and application to the organisation.

All managers have a continuing “day to day” responsibility to give colleagues feedback about their behaviour and to counsel them about any difficulties, with the aim of seeking improvements without the need to use the disciplinary procedure. However, there may be occasions when due to the seriousness of the issues, or the repeated/persistent nature of the behaviour, disciplinary procedures must be followed. The Company believes that having responsible, contributing, and committed employees negates the need for a long and detailed set of disciplinary rules. There may however be specific rules in documents appropriate to particular work activities such as Codes of Practice, Safe Working Procedures and Drivers' Handbooks that are mandatory and which managers should bring to the attention of individuals in their team. If individuals have any doubt about what is, or is not, acceptable, in terms of work performance or behaviour they should discuss this with their manager to avoid any misunderstandings. 1.2 Disciplinary Principles The Disciplinary Policy applies to all colleagues in Kelda Group Ltd and its wholly owned group companies in the UK. It has been developed following consultation with our recognised Trade Unions. Further consultation will take place should any amendments be made to this policy. It is expected that the following principles will apply in all cases:

• Disciplinary matters will be handled consistently, fairly, without discrimination and with careful consideration being given to the individual circumstances in each case.

• No individual will normally be dismissed for a first breach of discipline, other than for cases of

gross misconduct.

• As early in the investigation as possible, the employee will be made aware of the alleged misconduct. At each stage thereafter (i.e. when invited to attend a formal meeting), the employee will be informed in writing of the procedure including their right to representation.

• Employees who are invited to a Disciplinary Hearing will receive notification in writing, stating the

allegations and purpose of the hearing. Individuals will normally be given at least 2 days notice of any disciplinary hearings. This notice can be waived in appropriate circumstances, by mutual agreement of both parties.

• At all stages in the process those involved will respect the confidentiality of the issues and people

involved.

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• An employee will have the right to appeal against any disciplinary action.

• A manager taking disciplinary action must have the relevant authority from their respective Head of Department to award the penalty imposed. These levels of authority will be agreed between the relevant HR Manager and the Head of Department and will be reviewed from time to time to ensure they are appropriate.

• All formal meetings will be organised at a reasonable time when all parties concerned are

available. If an employee is unable or fails to attend a formal meeting that has been communicated to them, after re-arranging the hearing once, it is for the disciplinary or investigation manager to consider in the circumstances if it is reasonable to continue in their absence.

• Any appeal hearing will be heard by a more Senior Manager than the Manager who awarded the

original disciplinary outcome. However, in exceptional circumstances (e.g. due to holidays or previous business commitments) appeals may be heard by a Manager at the same level as long as he/she has had no previous involvement in the case.

• Employees may be represented or accompanied at formal investigatory or disciplinary meetings

with management by a trade union representative or fellow employee. Employees will be advised of this right and it is their responsibility to make any necessary arrangements.

• Recording devices of any nature will not be permitted in meetings, unless prior permission has

been expressly given by the disciplinary manager in conjunction with the Employee Relations Manager. Without such permission, covertly recording a meeting or an adjournment is a disciplinary matter and will be dealt with accordingly.

• If disciplinary action is being taken against a Trade Union Representative, the full circumstances

of the case should first be discussed in confidence with the relevant Full Time Trade Union Officer.

• The time limits referred to in the process may be varied by joint agreement.

• Following a breach or suspected breach of the Information Security Policy, the incident will be

investigated in accordance with the Conduct and Capability Procedure. The Human Resources Manager/ Human Resources will notify the Information Security Manager of any investigations taking place

The ACAS Code of Practice on Discipline and Grievance came into force on 6 April 2009 and represents a minimum standard of practice which must be followed by all employers. The Conduct & Capability Policy incorporates ACAS’s code of practice and goes beyond the minimum standard of practice. A Tribunal will determine whether a dismissal is fair by reference to ACAS Code provisions and the company’s procedure. Failure to follow company procedure could lead to a Tribunal ruling a dismissal as unfair, even if the failure would have made no difference to the decision to dismiss.

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SECTION 2 - DISCIPLINARY PROCEDURE 2.1 Investigation For the disciplinary procedure to be invoked, a manager must have reasonable grounds to believe that alleged misconduct has taken place. As such there is a need to establish the facts before disciplinary action is taken. This should be done through an investigation that should be conducted promptly and comprehensively. The investigating manager must remain impartial and record everything during the course of his/her investigations. As part of the investigation the employee will be required to attend a formal fact find meeting in order to explore the allegations. In such cases it should be made clear to the employee that this is a preliminary investigatory interview and not a formal disciplinary hearing. The employee should be made aware of their right to representation. Once the investigating manager has exhausted the fact-finding process and given the employee the opportunity to explain the alleged misconduct, he or she must decide whether the issue is a disciplinary matter. It is for the manager to decide whether they believe there is a case to answer. In cases where the evidence is limited or inconclusive, this should not itself prevent the matter proceeding to a disciplinary hearing. The key question for managers to answer is; on the face of the facts available, could the alleged misconduct conduct have taken place. Only, if the answer is yes, should the case proceed to a disciplinary hearing. It is for the disciplinary hearing to establish if the misconduct did take place on the balance of probabilities. If all parties are in agreement, the investigating manager may subsequently hold the disciplinary hearing but will be limited to issuing a first stage warning or second stage warning. However, if an individual has reasonable grounds to believe that they won’t be treated fairly and objectively by the investigating manager, they have the option before the hearing commences to request that an independent manager undertakes the disciplinary hearing. If a request is made HR will allocate an alternative manager who has had no previous involvement in the investigation. More serious cases should be referred to another manager to conduct the disciplinary hearing. This would normally be a more senior manager than the investigatory manager. In any event, (for more serious cases) the manager holding the formal disciplinary hearing should not have been involved in the investigatory stage. Even in cases of admitted misconduct, the formal disciplinary process must be followed with referral to a formal disciplinary hearing. 2.2 Precautionary Suspension An employee may be placed on precautionary suspension with full pay at any point during the investigation process. Before suspending an employee, careful and full consideration must be given to the specific circumstances of the case. Suspension can be considered in the following circumstances:

• When the allegations are for gross misconduct. • Where an employee was incapable of performing their duties. For example, under the apparent

influence of alcohol or drugs. • When a continued presence at work could be prejudicial / detrimental to the health & safety of the

employee or to the health & safety of others. • Where the presence of the colleague could prejudice the fact-finding investigation • Where the misconduct places others at risk, e.g. cases of bullying or violence.

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• Where continuation at work could be detrimental to the company or relations with employees, customers or suppliers.

The employee should be advised verbally and then in writing of the suspension. The letter should detail any restrictions or obligations required of the individual during the period of suspension. The period an employee is placed on suspension should be kept to a minimum and should be regularly reviewed. The employee should be advised of time-scales. It should also be made clear to the employee that suspension is a precautionary step, not a disciplinary outcome and is not an inference of guilt. In some instances, it may be appropriate for the suspension to be kept in place until a decision has been made following a disciplinary hearing. It is important to maintain contact with a suspended employee. They will need support throughout the process. This improves the chances of maintaining good relationships if and when they return to work. 2.3 Disciplinary Hearing Prior to the disciplinary hearing the employee should be informed in writing of the allegations against them and provided with a copy of the disciplinary policy at least 2 days before the hearing. The invitation should also confirm the individual’s right to representation. Any evidence to be used in the disciplinary hearing must be made available to the employee and their representative in advance of the hearing or reconvened hearing. Alternatively an adjournment of sufficient length should be given during the disciplinary hearing for the employee and their representative to review the evidence. In addition, if the employee concerned has any evidence or information which is to be presented at the hearing, it must be made available in advance of the hearing or reconvened hearing to the manager hearing the case. Alternatively, an adjournment will be taken during the hearing to review the new evidence. There may be occasions where it seems natural and timely to move straight to a disciplinary hearing after the investigatory interview (e.g. in less serious cases). If both parties agree to waive the minimum 2 days’ notice period, then the hearing may go ahead provided that written notice of the hearing, with details of the allegations, is given before the hearing commences. An employee who cannot attend a scheduled hearing should inform the disciplinary manager in advance of the meeting. If the employee is unable or fails to attend a meeting, after re-arranging the hearing once, it is for the disciplinary manager to decide, after careful consideration of the circumstances whether it is reasonable to continue in the individual’s absence. For example, if the hearing is re-arranged and the employee refuses without reasonable grounds to attend the rescheduled hearing, the manager should proceed in their absence. In some circumstances where employees are unable to attend a disciplinary hearing e.g. ill health, they may nominate a third party to attend on their behalf (Trade Union Representative or fellow employee). In these circumstances employees should fully brief their representative prior to the hearing and also inform the disciplinary manager of the alternative arrangements. The disciplinary hearing must be held by a manager able to award a disciplinary outcome appropriate to the type of misconduct under investigation. (see 1.2 Disciplinary Principles). The disciplinary manager, where possible, should have HR or another manager present during the hearing. The role of the HR representative in these circumstances is to actively support the manager during the proceedings. In addition, they will advise on procedure, assist in taking notes as requested and to advise the manager hearing the case on issues of fairness and consistency. In the absence of HR, the role of the supporting manager will be to witness and provide active support during the proceedings. Any party may request an adjournment during the disciplinary hearing. It is for the disciplinary manager to decide whether an adjournment is necessary or desirable, particularly if it is to enable further pertinent

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information to be gathered, additional witnesses to be questioned etc. The purpose and expected length of the adjournment should be made clear to all parties. The key responsibility of the manager hearing the case is to take into account all the information available to him/her at that time, to consider the “reasonableness” of the situation, and to make a fair decision on the balance of probability and taking into account any mitigating circumstances. At the hearing the employee will have the opportunity to put forward their case and respond to any allegations against them. Following the disciplinary hearing if it is decided that disciplinary action is appropriate then the company will apply whichever of the following levels of disciplinary measures it deems appropriate. This will depend on the severity of the misconduct and any mitigating factors that have been taken into account. 2.4 Disciplinary Outcomes Warnings issued for misconduct will be appropriate to the seriousness and nature of each case. Therefore, warnings for misconduct do not have to work chronologically through first stage, second stage etc. There will be occasions where individuals are awarded, for example, a second stage warning (even for a first offence) if the nature of the misconduct is serious enough to warrant a warning greater than a first stage. 2.4.1 No action Following a disciplinary hearing, the manager may decide that no action is necessary e.g. if the employee was unclear about what was expected from them and they agree to try and resolve the issue via additional support or counselling. Alternatively, the case may not be proven on the balance of probabilities. 2.4.2 First Stage Warning For a minor offence, a first stage warning may be given, making it clear that any further misconduct will render the employee liable to further disciplinary action involving more severe consequences. First stage warnings will normally be given by the immediate manager or the next level upwards. The warning must make clear the nature of the misconduct and any action required of the employee to remedy the matter, giving an appropriate time-scale over which the improvement is required. This must be confirmed in writing including an explanation of the appeal process. Generally, first stage warnings will be disregarded for disciplinary purposes after 6 months. Legitimate requests to gain access to conduct and capability records (in accordance with the provisions of the Data Protection Act) can be made to Kelda Payroll. 2.4.3 Second Stage Warning For more serious offences, or for the repetition of lesser offences, a second stage warning should be given, setting out the nature of the offence and warning that further misconduct is liable to result in further disciplinary action involving more severe consequences. Second stage warnings will normally be given by the immediate manager or the next level upwards. The warning must make clear the nature of the misconduct and any action required of the employee to remedy the matter, giving an appropriate time-scale over which the improvement is required. This must be confirmed in writing including an explanation of the appeal process.

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Second stage warnings will be disregarded for disciplinary purposes after 12 months. Legitimate requests to gain access to conduct and capability records (in accordance with the provisions of the Data Protection Act) can be made to Kelda Payroll. 2.4.4 Final Written Warning A final written warning is appropriate for serious misconduct, or misconduct which warrants dismissal but where the manager decides to mitigate the decision because of particular circumstances. It may also result from previous current unexpired disciplinary warning(s) without the employee improving to acceptable standards during the review period. A final written warning may also be awarded to an employee with less than 6 months’ continuous service even where no previous warnings have been given. A final written warning should only be issued by a Senior Manager with the relevant authority (or a nominee acting on their behalf) acting with the advice of an appropriate representative from the Human Resources Department. In any event, the manager holding the formal disciplinary hearing should not have been involved in the investigatory stage. Final written warnings will be disregarded for disciplinary purposes after 12 months. In exceptional circumstances where misconduct has been very serious and would normally lead to dismissal, it may be appropriate for the warning period to be extended beyond 12 months for a specified period. Legitimate requests to gain access to conduct and capability records (in accordance with the provisions of the Data Protection Act) can be made to Kelda Payroll. 2.4.5 Dismissal Summary dismissal (i.e. without notice) is appropriate in cases of gross misconduct or where there is a fundamental breach of trust between a manager and employee. Alternatively where no improvement takes place following the issue of a final written warning, dismissal with notice may be appropriate. Dismissal is an extremely serious step, and should be taken by a Senior Manager with dismissal authority (or a nominee acting on their behalf) acting with the advice of an appropriate representative from the Human Resources Department. In any event, the manager holding the formal disciplinary hearing should not have been involved in the investigatory stage. 2.5 Expired Warnings Previous “expired” warnings and records of discussions can only be taken into consideration at the investigatory and disciplinary stage if they are relevant to forming a belief, on the balance of probabilities, about whether misconduct has occurred. For example, a record of a meeting in which a manager informs an individual of the importance of the Company’s IT Security Policy would be relevant in a subsequent case if the individual then denied any knowledge of the policy. If there is persistent misconduct of a similar nature over a protracted period, there may be circumstances where “expired” warnings may be taken into account when determining the appropriate level of any future disciplinary penalty. In cases where dismissal is a potential outcome, expired warnings should not be relied upon as contributing to the reason to dismiss but can be one of the factors to be taken into account, when deciding whether or not dismissal is reasonable in the circumstances, along with any mitigating factors raised by the employee. 2.6 Redeployment

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On occasions, an appropriate outcome may include the transferring of the individual to a different role, department or location depending on the case. This should be a comparable role in terms of status and benefits. Where a transfer takes place in conjunction with a first stage, second stage or final warning, then this should not be at the financial detriment of the individual in terms of basic salary and benefits package, in other words, “Mark Time Pay” and/or “Maintained Pay” would apply. Where redeployment is an alternative to dismissal, this may include a demotion i.e. to a role with a lower salary/benefits package. In this instance the disciplining manager should consider whether it is appropriate to implement any reduction in stages over a 12 month period, according to the circumstances of the case. The disciplinary manager may also issue or extend a final written warning where redeployment is an alternative to dismissal. 2.7 Appeals against Disciplinary Action Employees have the right to appeal against any disciplinary action. This should be explained in writing by the manager making the disciplinary decision, including details of who to address the appeal to. If they wish to exercise this right, the appeal must be registered in writing to the manager who will be hearing the appeal, within 7 calendar days of receiving the written notification of the disciplinary action, stating the grounds for the appeal. An appeal can be made on grounds of:

• perceived unfairness of the decision • disputing the facts of the case including new evidence coming to light • procedural non-compliance • severity of the penalty awarded

The ground(s) of appeal and facts relied upon in support should be clearly stated on the written appeal. The employee should be invited in writing to attend an appeal meeting, which will normally be held within 14 days of their notification of appeal being received. Employees should be notified of their right to representation and should be given at least 2 days’ written notification of the scheduled appeal hearing. Where an individual is unable to attend the scheduled hearing, the hearing should be rescheduled at least once before it is heard in their absence. If an individual refuses without reasonable grounds to attend a rescheduled hearing, the manager should proceed in their absence. Where possible the manager hearing the appeal will be the manager of the person who made the original decision. However, there may be occasions when the organisation structure prevents this from happening. In such instances a senior manager from another part of the business may hear the appeal and every effort should be made to ensure that this manager (hearing the appeal) is more senior than the original disciplining manager, although it recognised that this may not always be practicable. The manager hearing the appeal should not have had any previous active involvement in the decision which is being appealed and should be supported by a representative from HR. At the appeal meeting the manager will consider the points on which the appeal is based, together with any supporting evidence provided by the employee and their representative. In addition, they may invite the manager who made the original decision to respond and put forward their case. The manager hearing the appeal may also request further investigations/evidence as they see fit in order to review the case. The manager hearing the appeal may uphold, withdraw or vary the disciplinary outcome. This does not include increasing the severity of the original outcome. The employee should be notified in writing of the appeal decision within 14 days and advised that there is no further right of appeal. 2.8 Effective Date of Termination.

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If an appeal against dismissal is unsuccessful the effective date of termination will be the original date of dismissal. If the appeal is upheld, the individual will be re-instated and their employment will be regarded as continuous. 2.9 Pay for Performance An employee who receives a disciplinary warning will be assessed as “unsatisfactory conduct” for the quarter the penalty is awarded and will therefore not receive a performance award for that quarter. Depending on the severity of the warning and any improvement in the individual’s conduct, the individual may receive a performance award in the following quarter, at the manager’s discretion. If it is decided that they are not to receive a performance bonus for more than one quarter, the assessment rating on MSS for each relevant quarter should be “unsatisfactory conduct”. There may occasionally be circumstances when an employee who is already undergoing formal or informal performance management is issued with a disciplinary warning for misconduct. In this situation, the individual’s assessment rating will be “unsatisfactory conduct” on the performance management documentation, and on MSS. The manager should also note on the performance management documentation that there is an ongoing performance issue and make an assessment of the person’s performance in addition to this. It is important to note that the performance management process will continue or commence alongside the disciplinary warning, and subsequent action may be taken under the performance management process if there is insufficient improvement in performance. A record of all performance and conduct discussions will be held on the employee’s file. For example: Employee A has been with the company for 2 years. Six months ago, their manager identified issues with their performance and arranged support in the form of training, coaching and mentoring sessions. Unfortunately the individual is still not performing to the required standard. The employee has been issued a first stage warning for performance and their performance is still being closely monitored and managed. The individual’s performance rating has been listed as ‘improvement needed’ on the system for the last two quarters. In the past two weeks, the employee has been disciplined for poor timekeeping, and has received a first stage warning for conduct. In their performance review for the current quarter, their manager will discuss both their conduct and their work performance, and then record their rating as “unsatisfactory conduct” on MSS. In the paperwork for the meeting, the manager will also need to note that there is an ongoing performance issue. The following quarter, as long as there are no further conduct issues, and if there is insufficient improvement in performance, the manager will record ‘improvement needed’ on MSS. LOOP employees – Performance in the Round An individual who receives a disciplinary warning will be assessed as “Did not achieve” and will therefore not receive a performance award for that quarter. Depending on the severity of the warning and any improvement in the individual’s conduct or performance, the individual may be able to receive a performance award in the following quarter. 2.10 Gross Misconduct The following, whilst not exhaustive, are examples of incidents which may be considered as gross misconduct as these issues fundamentally undermine the basis of trust between the Company and the employee concerned:

• Theft • Fraud • Dishonesty and actions such as deliberate falsification of information,

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• Any action which may be in breach of the Gifts Policy held within the Company’s Code of Ethics. This could include the giving or receiving of gifts and/or corporate hospitality which may ultimately contravene the Bribery Act,

• Bribing another person, accepting a bribe, bribing a foreign public official and/or a failure to report suspicions or knowledge of breaches of anti corruption / bribery policies, and/or any other action which may be in breach of the Bribery Act,

• Interfering with company documents, property or information systems - including the introduction of computer viruses or breach of the Data Protection Act,

• Gross insubordination – the failure to comply with reasonable instructions, Company Policy or legislation,

• Breaches of health, safety and environmental rules, • Negligence, • Violent behaviour, harassment, bullying or other conduct either at or away from work which

significantly undermines working relationships with managers, colleagues or customers, • Any action that may bring the company’s name into disrepute, • Being under the apparent influence of alcohol which has an adverse effect on your ability to carry

out your role (in accordance with the Company’s Drugs and Alcohol at Work Policy), • Unauthorised consumption of alcohol on company premises, • In the possession of, consuming or under the influence of illegal drugs (in accordance with the

Company’s Drugs and Alcohol at Work Policy), • Unauthorised absence without due cause, • Acting in a manner detrimental to company interests – e.g. disclosure of confidential or sensitive

information (except within the scope of the Public Interest Disclosure Act), breach of the company Code of Conduct,

• Abuse of the Company’s time and/or resources, including using the telephone, e-mail, internet and computer facilities for personal use, which contravenes the Company’s IT Security Policy,

• Accessing, storing, downloading, transmitting or otherwise forwarding material that could be considered libellous, racist, sexist or otherwise offensive or distasteful via the Company’s e-mail, internet and computer facilities,

• Covertly recording a meeting or an adjournment without express permission. In all cases, the relevant facts and mitigating circumstances will be taken into account in reaching a decision, but actions amounting to gross misconduct will normally result in summary dismissal. 2.11 Role of person accompanying at the hearing The person accompanying the employee may be a trade union representative or fellow employee. They must not be a witness involved in the particular case and must not have had any material involvement in the case in question. There is no duty on an individual to accept a request to act as a companion and no such pressure should be placed on an individual. Colleagues and lay trade union representatives should be allowed a reasonable amount of paid time off to fulfil this responsibility. The representative (whether a trade union representative or colleague) can address the hearing but does not have the right to answer questions on the individual’s behalf unless the representative is acting for the individual in their absence e.g. due to ill-health. They may also confer privately with the individual. Any formal meeting (whether an investigatory meeting or a disciplinary hearing) should be arranged on a convenient date for the Manager, employee and representative. However, if the representative cannot attend on the proposed date the hearing will be postponed for up to five working days from the original date.

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2.12 Records of the Meeting Notes will be taken at all stages of the disciplinary process by either a HR representative or a supporting manager. These will be available to employees and their representative after each meeting. Employees and / or their representatives may also choose to make their own notes. Recording devices of any nature will not be permitted in meetings unless prior permission has been expressly given by the disciplinary / investigation manager in conjunction with the Employee Relations Manager. Without such permission, covertly recording a meeting or an adjournment is a disciplinary matter and will be dealt with accordingly. 2.13 Grievances and harassment claims during an on-going disciplinary process If an employee raises a grievance that is related to a disciplinary process, the Company will consider whether to (i) suspend the disciplinary process and/or appoint another manager to deal with the grievance or (ii) continue the disciplinary process. There are a number of possible scenarios: In disciplinary cases where the employee is subject to allegations of harassment and the employee makes counter allegations of harassment, the disciplinary process will normally be suspended until the counter allegations have been fully investigated. Where the disciplinary action taken or contemplated by the company is dismissal, and the employee raises a related grievance, in most cases the grievance will be dealt within the context of the disciplinary process, for example where the grievance relates to the conduct of the investigation. Similarly, where the company is contemplating paid suspension or disciplinary action such as a warning or other action short of dismissal and is conduct or capability related, the grievance will be dealt with under the disciplinary procedure. If the grievance is that the Company’s action amounts, or would amount, to unlawful discrimination, or if it is alleging that the true reason for the action is not the reason given by the Company, the grievance will normally be dealt with at the disciplinary hearing and/or disciplinary appeal hearing, unless the disciplinary hearing has already taken place, in which case the grievance will be dealt with under the Company’s Grievance Procedure or Dignity at Work Procedure. Any grievances which are not related to the disciplinary procedure will be dealt with under the Company’s Grievance Procedure or Dignity at Work Procedure. 2.14 Sickness Absence If during the course of the disciplinary procedure an employee becomes absent from work due to illness, the hearings which they are required to attend (e.g. fact find or disciplinary hearing) should be temporarily postponed until the individual is medically fit to attend or until they have been given reasonable time to arrange for a third party to represent them. In cases where the disciplinary process is the underlying cause of the absence; following a reasonable period of postponement and subject to the consideration of medical advice, the disciplinary process should proceed.

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2.15 Flowchart of Disciplinary Procedure This flow chart is a summary of the key steps of the Disciplinary Procedure and should be used in conjunction with the detailed procedure Alleged misconduct takes place

Consider suspension on full pay e.g. if clear evidence of misconduct exists

Investigation Interview - hold investigatory interview (right to representation) - consider suspension in light of the investigation - establish the facts

No misconduct taken place Grounds for disciplinary hearing No action Relatively Minor Incident Serious incident Likely penalty – First or Second Stage Likely penalty – Final Written or Dismissal Written Warning Refer to more Senior Manager Hold formal disciplinary hearing - invite verbally and in writing (min of 2 days notice) - right to representation Outcome

No Action First Stage Warning Second Stage Warning Final Warning Dismissal Live for 6 months Live for 12 months Live for 12 months Explain

Explain Explain Explain - reason - reasons - reasons - reasons - right of appeal - future expectations - future expectations - future expectations (within 7 calendar - possible action if - possible action if - possible action if days of written further misconduct further misconduct further misconduct notification) occurs occurs occurs - right of appeal - right of appeal - right of appeal Redeployment Appeal Hearing (normally held within 14 days of receipt of letter) Outcome of Appeal (normally issued in writing within 14 days of hearing)

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PART 2 – SICKNESS ABSENCE Index Section 1 Sickness Absence Policy 17

1.1 Introduction 17 1.2 Responsibilities 17

1.2.1 Managers 17 1.2.2 Employees 17 1.2.3 Trade Union Representative 18

1.3 Occupational Health 18 1.4 Company Sick pay 18 1.5 Misconduct 19 1.6 Injury at work 19 1.7 Precautionary Suspension 19 1.8 The Equality Act 2010 19

1.8.1 Definition of disability 19 1.8.2 Examples of physical and mental impairments 20 1.8.3 Duty to make reasonable adjustments 20 1.8.4 Access to Work 20

Section 2 Short Term Absence Procedure 21

2.1. Persistent short term absence 21 2.2 Identification of short-term absence issues and Informal Counselling 21 2.3 Formally managing sickness absence 21

2.3.1 Stage 1 Review Meeting 22 2.3.2 Stage 2 Review Meeting 23 2.3.3 Stage 3 Review Meeting 23 2.3.4 Stage 4 Review Meeting 24

2.4 Ongoing monitoring/review 25 2.5 Right of appeal 25 2.6 Pay for Performance 26 2.7 Summary of short term absence procedure 27

Section 3 Long Term Sickness Absence Procedure 28 3.1 Introduction 28 3.2. Managing long term absence 28 3.3 Terminal Illness 29 3.4 Facilitating a return to work 29 3.5 Termination of employment 30

3.5.1 Referral to Occupational Health 30 3.5.2 Formal Review Meeting – Line Manager 31 3.5.3 Case Review 31 3.5.4 Employment Review Meeting - Senior Manager 31

3.6 Right of appeal 32 3.7 Summary of Long Term Absence Procedure 34

SECTION 1 - SICKNESS ABSENCE POLICY

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1.1 Introduction The management of sickness absence is vital if managers are to fulfil their strategic objectives and maintain customer service. It is recognised that people will be ill from time to time, however, the cost of sickness absence and the impact on our customers and colleagues needs to be minimised as far as possible. Managers therefore need to balance business requirements with the individual circumstances. 1.2 Responsibilities 1.2.1 Managers Must ensure accurate records of all periods of absence for people in their team are either input into MSS or reported to the relevant department. This not only ensures accurate monitoring at both individual, unit and company level of absence levels, reasons for absence etc. but also gives the essential data and evidence to allow managers to take action where necessary and to recognise good attendance. Detailed absence data (for example: reasons for absence) is classed as personal sensitive data and must therefore be recorded, stored and processed in accordance with the terms of the Data Protection Act. Managers are responsible for the day to day management of absence including fair, reasonable and consistent application of this policy and supporting procedure. They are responsible for minimising absence levels within their areas of responsibility by:

identifying instances of regular, intermittent and high absence; taking appropriate action in accordance with this policy; developing safe systems of work and working environment which help to minimise

absence including well designed jobs. Managers must take appropriate action for persistent short term absence. Long term absence cases should initially be managed by keeping in regular contact with employees whilst off work. In cases of long-term absence the Manager will be required to liaise with Human Resources and the Occupational Health Unit. Additionally, managers should manage the return to work. This may include making adjustments, as appropriate, to ensure the requirements of The Equality Act (2010) are met, for example; changes to workstations or working environment. For more information see Para. 1.8 below. It is important that managers conduct a return to work discussion with the individual after each period of sickness absence. This should take place, where possible, within 2 days of the return to work. This allows a manager to welcome employees back to work, update them on business issues, assess whether they are fully recovered and able to perform normal duties, assess if any further support is needed, review recent absence history and remind the individual they were “missed” and the impacts absence has on the business. 1.2.2 Employees To help ensure that the company achieves its business objectives and a safe and healthy working environment is maintained, it is important that all employees fulfil the following obligations:-

Maintain good health and fitness for work and attend work when they are fit to do so. Phone in and speak to the relevant person within an hour of their normal start time on the

first day of absence and keep in touch with their manager at agreed intervals thereafter. Maintain MSS records with periods of sickness absence on return to work (for absences

up to 7 days) (This is not applicable to LOOP) Provide a doctors certificate for periods of absence of 8 or more calendar days Co-operate with the Occupational Health Specialist and Occupational Health Team to

facilitate overall management of the situation.

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Refrain from undertaking any activities during their absence that may impede or impact on their rehabilitation and recovery.

Return to work when they are fit to do so Report any work related illness / accident immediately to their manager and follow the

Company Accident Reporting Procedures Promptly complete and return consent forms to enable the Company to obtain relevant

medical reports from the employee’s GP or from a specialist. 1.2.3 Trade Union Representatives Have a responsibility to understand and support the company’s objectives and in representing their members to ensure consistency in their approach and compliance with the company’s agreed procedures. 1.3 Occupational Health At any time the company may require an individual to see a member of the Occupational Health Team ( occupational health nurse or physician). In addition there may be occasions when it is necessary for the Occupational Health Team to seek an individual’s permission to obtain a medical report from their own GP or from a specialist involved in their medical treatment/care This is to enable the occupational health team to help the manager to get a clear understanding of: an individual’s health / condition, how it is impacting on their ability to work and whether there is anything the company can do to support the individual in their current role or back to work if they are absent. The medical reports received from Occupational Health may also be taken into account when making decisions about an individual’s future employment. Individuals may independently approach Occupational Health at any time, without a referral from their manager. The content of these conversations will remain confidential between the individual and Occupational Health. If an individual does not co-operate in providing medical information, they should be made aware that the company will have to consider their case and this could include a decision such as whether or not their employment should be terminated, on the basis on the information available. 1.4 Company Sick Pay If an individual is unable to work as a result of sickness or injury, they are entitled to receive occupational sick pay in line with company sick pay provisions. Occupational sick pay is a benefit provided by the company and intended to provide financial help to those who are unable to work due to sickness. The company reserves the right to withhold an individual’s sick pay entitlement should they fail to co-operate with the company absence procedure or legal provision governing eligibility for Statutory Sick Pay (SSP). 1.5 Misconduct Whilst this policy is not a disciplinary procedure, it may be necessary in some cases to take disciplinary action. For example, claiming occupational sick pay or SSP fraudulently is a dismissible offence if the company has reasonable grounds to believe that sick pay is being claimed in circumstances where an employee is fit to work. These matters would be dealt with under the disciplinary procedure. In addition to withholding sick pay (as outlined in 1.4), an individual’s failure to comply with their obligations under the sickness absence policy, could lead to their absence been treated as “unauthorised”. This is a disciplinary offence and will also be dealt with under the disciplinary procedure

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1.6 Injury at work All accidents and any physical injury, however slight, which occur during the course of someone’s employment, must be reported immediately to an individual’s manager and the company accident reporting procedures must be followed. 1.7 Precautionary Suspension Suspension may be used when the continued presence at work could be prejudicial / detrimental to the health of the employee or other employees. The company has a duty of care to all employees under the Health & Safety at Work Act 1974 and its regulations and approved codes of practice. Any period of suspension under the Sickness Absence Policy will be paid at full pay and will not be treated as a disciplinary sanction. The employee should be advised verbally and then in writing of the suspension. The letter should detail any restrictions or obligations required of the individual during the period of suspension. The period an employee is placed on suspension should be kept to a minimum and should be regularly reviewed, while further medical advice is sought and / or adjustments made to the work place / role. Throughout the suspension period, it is important that the line manager maintains regular contact with the employee. Before suspending an employee, the manager should consult the Employee Relations Manager and inform the appropriate trade union official. 1.8 The Equality Act 2010 (“the Act”) The Act makes it unlawful to “unjustifiably” discriminate against an individual on the grounds of his/her disability in relation to recruitment, promotion, training, benefits, terms and conditions of employment and dismissal. It also requires employers to make “reasonable” adjustments to ensure employability of individuals who meet the definition of disabled under the terms of the Act. In particular this can have an impact on how sickness absence cases can be managed. It is important therefore that managers seek appropriate specialist advice from HR and Occupational Health when an illness is identified to ascertain any implications of the Act. 1.8.1 Definition of a Disability The Act states that “a person has a disability if he/she has a physical or mental impairment which has a substantial and long term adverse effect on his/her ability to carry out normal day to day activities”. Contact HR for more detailed information on the definition of “disabled” within the terms of the Act. 1.8.2 Examples of physical and mental impairments Examples of physical and mental impairments that may constitute a disability include chronic fatigue syndrome, schizophrenia, rheumatoid arthritis, diabetes, epilepsy, impaired hearing and dyslexia. These are simply examples and are not an exhaustive list. A person who has cancer, HIV infection or multiple sclerosis is deemed to have a disability regardless of symptoms. Therefore people affected by those progressive illnesses will be treated as disabled for the purposes of the Act as from the point of diagnosis. 1.8.3 Duty to make Reasonable Adjustments An employer has a duty to make reasonable adjustments for any employee with a disability.

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Below are some examples of reasonable adjustments that may be made:-

• making adjustments to premises • allocating some of the disabled person’s duties to another person • transferring him/her to fill an existing vacancy • altering his/her working hours • transferring him/her to a different place of work • allowing him/her to be absent during working hours for rehabilitation, assessment or

treatment • arranging further training • acquiring or modifying equipment • modifying instructions or reference manuals • providing supervision

Reasonable adjustments are not extended to additional sick pay or unlimited sick leave. However, it may be appropriate to make reasonable adjustments to absence triggers. The following factors should be considered when determining whether an adjustment is a reasonable adjustment:-

the extent to which making the adjustment would prevent the effect in question (e.g. dismissal or inability to work)

the extent to which it is practicable for the employer to make the adjustment the financial and other costs which would be incurred by the employer in making the

adjustment and the extent to which making it would disrupt any of the employer’s activities the extent of the employer’s financial and other resources

1.8.4 Access to Work When an individual becomes disabled, it may be necessary for the line manager to gain specialist advice. This may be advice about purchasing specialist equipment or advice about modifying premises. The Access to Work programme is run by Jobcentre Plus. It provides specialist support and financial assistance towards the extra costs of employing someone with a disability. To find out more about the service and how to apply for support, please contact HR who will provide guidance and support.

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SECTION 2 – SHORT TERM SICKNESS ABSENCE PROCEDURE It is accepted that individuals will occasionally be off sick and this should normally not give rise to any issues. Absence that needs to be managed falls into two categories: persistent short term and long term. 2.1 Persistent Short Term Absence When an individual’s short-term, intermittent absence level becomes an area of concern the manager should review the absence history to decide what, if any, action they should take. This review may be necessary if an individual’s attendance level has reached one of the trigger points detailed below, or if the manager has concerns about the welfare of the individual or the impact of the individual’s absence on the team:-

4 or more occurrences of absence in a rolling 12 month period 8 days in a rolling 6 month period where circumstances indicate a need to review the level of absence

It is important to note that maternity related absences should not be included in the above assessment. There are also other types of absence that should be excluded from this process including paternity leave, dependants and parental leave as these are not related to sickness and are permitted within the Company’s policies. 2.2 Identification of Short-Term Absence Issue and Formal Counselling Once an attendance issue has been identified the manager should gather any necessary evidence (e.g. sick absence record) and discuss with the individual. In particular the individual should be given the opportunity to ensure the record is accurate and to explain any reasons for the absences. During the discussion the manager should consider the reasons for the absences (e.g. pattern of absences, overall absence history). Any underlying health issues raised by the individual should be assessed, in conjunction with Occupational Health if appropriate. It should be established at this stage and also throughout the procedure, whether or not the individual is classed as Disabled within the meaning of the Act. If so, the Company must undertake its obligations in terms of reasonable adjustments. If the absences are not related to a health reason any further action may need to be taken under the terms of the disciplinary policy. Equally, any personal issues raised should be taken into account. Following the above discussion it is important to agree an action plan and / or expectations over a defined review period. Particular attention should be made to ensuring the individual is provided with the necessary support, which may include referring their case to Occupational Health. Employees should approach HR to access / obtain advice these policies. 2.3 Formally Managing Sickness Absence Where there has been insufficient improvement in attendance after counselling or supporting interventions which have been agreed through on-going attendance management discussions, the formal short -term absence procedure should be followed. The purpose of the formal procedure is to manage unsatisfactory absence and support individuals to improve their attendance levels.

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At each stage of the formal procedure the employee should be informed in writing of the purpose of the meeting and provided with a copy of the absence policy at least 2 days before the review meeting. The invitation should also confirm the individual’s right to representation. In advance of the meeting individuals should be provided with details of their absence records and any other documents that will be referred to in the meeting. Alternatively, an adjournment of sufficient length should be given during the review meeting. There may be occasions where both parties agree to waive the minimum two days notice period. In these cases the review meeting may go ahead provided that written notice of the meeting and its purpose has been given. All formal meetings will be organised at a reasonable time when all parties concerned are available. If an employee fails or is unable to attend a formal meeting that has been communicated to them, after re-arranging the meeting once, it is for the manager to consider in the circumstances if it is reasonable to continue in their absence. For example, if a formal meeting is re-arranged and the employee refuses without reasonable grounds to attend the rescheduled meeting, the manager will proceed in their absence. . For employees with less than 6 months’ continuous service the manager has the discretion to enter the procedure at Stage 4, even where there have been no previous formal stages. 2.3.1 Stage 1 Review Meeting This is the first stage of the formal procedure to manage an individual’s unsatisfactory attendance levels.

In reviewing attendance the line manager should present accurate records to illustrate an individual’s absence and should discuss:-

Whether there are any underlying health problems and how these are being supported. Whether the individual considers they have a disability which might be affecting their attendance. Whether there are any other reasons i.e. personal, domestic or other circumstances, which might be

affecting their attendance. Whether it is appropriate to seek medical information and / or advice from the Occupational Health

Team There are two possible outcomes of a Stage 1 Review Meeting, which will be confirmed in writing to the individual. These are:-

• First stage warning • No formal action is required at this stage.

If there is a need for further improvement, the individual will be given a first stage warning and will be provided with a clear expectation of what level of improvement is required and in what timescale. (N.B. The timescales in which future improvement is required does not necessarily have to be the same timescales as the expiry period of the warning). The manager will determine when the next review will take place e.g.: based on trigger points i.e. number of absences, time period etc and will make clear the potential consequences of continuing to fail to meet acceptable levels of attendance. (N.B Triggers to proceed to the next review stage will be determined by the manager on a case by case basis and may not be aligned with the trigger points stated in paragraph 1.1.) The warning will expire after 6 months. Where no formal action is taken, support and encouragement should be given to the individual and a review / monitoring period should be agreed. The individual should be advised that if their attendance deteriorates, then it could result in future formal action. The outcome of the meeting should be confirmed in writing.

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Individuals will have the right to appeal against the outcome of a Stage 1 meeting (see 2.5 below). 2.3.2 Stage 2 Review meeting Where a first stage warning was awarded at Stage 1 and there has been no significant and sustained improvement in attendance levels i.e. the trigger levels have been reached, a Stage 2 Review Meeting should be arranged as soon as possible. (N.B. If attendance levels deteriorate following the expiry period of the first stage warning, Stage 1 should be re-commenced). The meeting should follow the same format as Stage 1, with managers presenting accurate absence records and exploring any underlying issues. If advice from Occupational Health has been sought, the findings should be shared and discussed in the meeting. If any recommendations for reasonable adjustments have been made these should be explored fully. If medical advice has not yet been sought careful consideration should be given to making a referral. If there has been no sustained and significant improvement, the individual will be given a second stage warning and will be provided with clear expectations of what level of improvement is required in the future and when the next review will take place e.g.: based on trigger points, time period etc. (N.B. The timescales in which future improvement is required does not necessarily have to be the same timescales as the expiry period of the warning). The warning will expire after 12 months. The outcome of the Stage 2 Review will be confirmed in writing to the individual and make clear the potential consequences of continuing to fail to meet acceptable levels of attendance. Individuals will have the right to appeal against the outcome of a Stage 2 meeting (see 2.5 below). 2.3.3 Stage 3 Review Meeting Where a second stage warning was awarded at Stage 2 and there has been no significant and sustained improvement in attendance levels i.e. the trigger levels have been reached, a Stage 3 Review Meeting should be arranged. (n.b. If attendance levels deteriorate following the expiry period of the second stage warning, Stage 1 should be re-commenced) The meeting should follow the same format as Stage 1, with managers presenting accurate absence records and exploring any underlying issues. If advice from Occupational Health has been sought, the findings should be shared and discussed in the meeting. If any recommendations for reasonable adjustments have been made these should be explored fully. If medical advice has not yet been sought careful consideration should be given to making a referral. If there has been no sustained and significant improvement, the individual will be given a final written warning and will be provided with clear expectations of what level of improvement is required in the future and when the next review will take place e.g.: based on trigger points, time period etc. (N.B. The timescales in which future improvement is required does not necessarily have to be the same timescales as the expiry period of the warning). The warning will expire after 12 months. The outcome of the Stage 3 Review will be confirmed in writing to the individual and will make clear the potential consequences of continuing to fail to meet acceptable levels of attendance. The letter detailing the Stage 3 outcome must make it clear that this is a final opportunity to improve attendance and that dismissal may be the result of any future failures to improve within the time-scale. Individuals will have the right to appeal against the outcome of a Stage 3 meeting (see 2.5 below). 2.3.4 Stage 4 Review meeting

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Where a final written warning was awarded at Stage 3 and there has been no significant and sustained improvement in attendance levels i.e. the trigger levels have been reached, a Stage 4 Review Meeting should be arranged. (n.b. If attendance levels deteriorate following the expiry period of the final written warning, Stage 1 should be re-commenced) The Stage 4 Review meeting will be at the end of the process of managing an individual’s unsatisfactory attendance levels. As such, the purpose of the interview is to make a decision about their future employment, taking all factors into consideration. For employees with less than 6 months continuous service the manager has the discretion to enter the procedure at Stage 4, even where there have been no previous formal stages. The outcome of a Stage 4 meeting will be:

• A further review period to improve attendance levels (N.B For this outcome the final written warning will be extended and will expire after 12 months)

• Termination of employment on the grounds of incapability or unacceptable absence from work Dismissal is an extremely serious step, and may only be taken by a Senior Manager with dismissal authority (or a nominee acting on behalf of the Senior Manager) acting with the advice of an appropriate representative from the Human Resources Department. In any event, the Senior Manager making this decision should not have been involved in the previous Stages. The Senior Manager holding the formal review meeting should consider the following areas before reaching a conclusion:-

• how soon the individual’s attendance is likely to improve; • what improvement (if any) has taken place; • is the absence caused by an underlying medical condition, and if so, whether the individual is fit

to undertake alternative work and whether alternative work is available; • the effect of the absence on the team, business unit and organisation; • whether the individual has a disability and therefore whether the Company has complied with its

responsibilities in terms reasonable adjustments and less favourable treatment. In any event, a decision to dismiss under this procedure will not be made without medical information (unless the employee has failed to co-operate in the provision of, or refused to provide medical information or attend a medical examination [subject to gaining individual consent]). The individual has a right to appeal against the Stage 4 outcome, to a more senior level of management (see 2.5 below). 2.4 Ongoing monitoring/review The purpose of all Review Stages of the procedure is to help the individual to achieve expected levels of attendance and to provide appropriate support. Following any stage of the procedure, the line manager has the responsibility to provide the individual with continuing feedback on how the attendance is progressing. Feedback, both positive and negative, should not be saved for the next Review Stage. Indeed, it is important to recognise that earlier feedback could lead to improvements in attendance which might prevent the need for further formal Stages. If at any point in the process it is shown that absence is not genuinely as a result of sickness then action should be taken under the disciplinary procedure. 2.5 Right of Appeal

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Employees have the right to appeal against the outcome of any formal Stage within the procedure. This should be explained in writing by the manager when confirming the outcome of the review meeting, including details of who to address the appeal to. If they wish to exercise this right, the appeal must be registered in writing to the manager who will be hearing the appeal, within 7 calendar days of receiving the written notification of the decision, stating the grounds for the appeal. An appeal can be made on grounds of:-

• perceived unfairness of the decision • disputing the facts of the case including new evidence coming to light • procedural non-compliance • severity of the stage within the procedure

The ground(s) of appeal and facts relied upon in support should be clearly stated in the written appeal. The employee should be invited in writing to attend an appeal meeting, which will normally be held within 14 days of their notification of appeal being received. Employees should be notified of their right to representation and should be given at least 2 days’ written notification of the scheduled appeal hearing. Where an individual is unable to attend the scheduled hearing, the hearing should be rescheduled at least once before it is heard in their absence. If an individual refuses without reasonable grounds to attend a scheduled hearing, the manager will proceed in their absence. Where possible the manager hearing the appeal will be the manager of the person who has made the original decision. However, there may be occasions when the organisation structure prevents this from happening. In such instances a senior manager from another part of the business may hear the appeal and every effort should be made to ensure that this manager (hearing the appeal) is more senior than the manager who made the original decision, although it recognised that this may not always be practicable. The manager hearing the appeal should not have had any previous active involvement in the decision which is being appealed and should be supported by a representative from HR. At the appeal meeting the manager will consider the points on which the appeal is based, together with any supporting evidence provided by the employee and their representative. In addition, the manager who made the original decision may be invited to respond and put forward their case. The manager hearing the appeal may also request further investigations/evidence as they see fit in order to review the case. The manager hearing the appeal may uphold or withdraw penalty. Where the penalty was dismissal, if the individual is re-instated or re-engaged, the hearing manager may impose an extended final written warning. The employee should be notified in writing of the appeal decision within 14 days and advised there is no further right of appeal. 2.6 Pay for Performance Unlike a disciplinary warning (misconduct), an employee who receives a formal warning for short term absence will not be automatically assessed as “improvement needed” for the quarter the penalty is awarded. An individual’s performance assessment should be based on their overall contribution and performance that quarter.

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2.6 Summary of Short Term Sickness Absence Procedure This flow chart is a summary of the key steps of the Short Term Absence Procedure and should be used in conjunction with the detailed procedure.

Ongoing management of attendance - back to work discussions - one to one discussions/counselling - monitor attendance levels - monitor absence levels of team members fairly Absence level becomes unsatisfactory – informal stage - gather relevant information e.g.: absence history - any underlying health issues - consider if Disabled - consider support from Occupational health - discuss future expectations over a defined review period If there is no significant and sustained improvement Stage 1 Review Meeting - understand the facts - present accurate records to illustrate absence levels - establish any underlying factors e.g. health, domestic, work - consider referral to Occupational Health - consider if disabled - discuss future expectations - agree review period / triggers - right to representation - if no improvement issue first stage warning - right of appeal - confirm outcome of stage 1 in writing If there is no significant and sustained improvement Stage 2 Review Meeting - review progress during review period against expectations - right to representation - explain level of improvement required - if no improvement issue a second stage warning - confirm review period / triggers - confirm outcome of stage 2 meeting in writing

- right of appeal If there is no significant and sustained improvement

Stage 3 Review Meeting - review progress during review period against expectations - right to representation - explain level of improvement required - if no improvement issue a final written warning - confirm review period / triggers - confirm outcome of stage 3 meeting in writing - right of appeal If there is no significant and sustained improvement

Stage 4 Review meeting To be conducted by appropriate Senior Manager - further opportunity to improve attendance - termination of contract - confirm review period and outcome in writing - confirm outcome in writing - right of appeal - right of appeal

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SECTION 3 LONG TERM SICKNESS ABSENCE PROCEDURE 3.1 Introduction Once it becomes apparent to a manager that an individual’s absence is likely to be long term, the following procedure should be adopted. In some cases, this may be within the first few days or weeks of absence, but in any case the manager should have commenced this procedure by the time the individual has been absent for a continuous period of 14 days . In cases where the individual’s absence is due to Stress (work and non-related work ) or Muscular Skeletal issue a referral should be completed on day one of the absence to provide early Occupational Health intervention and support. In long term absence cases, a timely and sustained return to work is much more likely to be achieved if the individual is supported from an early stage by the manager in conjunction with Occupational Health and HR. There should be regular contact between the individual and the Company (normally their immediate manager, unless the employee alleges that it is the manager’s conduct e.g. harassment, which has caused their long term absence) who should make a referral to Occupational Health for an assessment of the individual’s condition. Where an employee is going to be absent due to an operation with an expected period of recovery, it is still necessary to refer to Occupational Health, because even in these cases, the Occupational Health team may be able to recommend interventions, such as physiotherapy, which will speed the recovery process and prevent longer term injury and ensure that a return to work/normal activities can be sustained. The role of Occupational Health is to ascertain the individual’s medical condition in liaison with their medical practitioner or specialist as appropriate . They will also provide advice on interventions which will facilitate a return to work, identify the likely return to work date and advise what reasonable adjustments may be needed once the individual returns to work. Long-term absence cases should be discussed with a member of the Human Resources team, to establish what, if any action should be taken. 3.2 Managing long term sickness absence The length of absence in these cases will differ greatly, depending on the seriousness of the illness/injury, the period of recovery and the ability to provide reasonable alternative work, where appropriate. It is important therefore to take a case management approach to ensure that:-

ongoing communications between the individual and the Company are timely and appropriate medical information and advice is sought from Occupational Health at the appropriate time HR is involved and is kept up to date with the progress of the case review meetings between the manager and the individual are held regularly and notes taken the individual is kept up to date with the process

Although it is difficult to determine a specific number of review meetings to take place throughout the length of the absence, the manager is expected to meet with the individual and make written notes of discussions / actions at key stages for example:- once it is known that the absence is expected to be long-term following any medical information / advice regular intervals (as agreed with the individual) before a return to work

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File notes should be kept by the manager to ensure clear and accurate records are maintained on individual personal files in accordance with the Data Protection Act (for more information refer to the Kelda Data Protection Policy). The appropriate method of regular communication should be determined in each case. Where possible, face to face contact is recommended and this should be the main method of communication. On occasions, it may also be appropriate to have telephone or written contact for example, during hospitalisation or to update the individual on work related issues. There are a number of potential outcomes when managing a long term sickness case. These are:-

Return to work which may be facilitated via a rehabilitation programme or phased return ( occupational health will offer advice regarding either of these options)

Redeployment Termination of employment on the grounds of incapacity (n.b. prior to any decision to terminate

an employee’s contract, consideration should be given to whether they are eligible for an occupational ill health pension)

When determining the outcome of the long-term absence case, the manager with the support of HR should consider the following:-

how soon the individual’s health and therefore attendance is likely to improve; whether alternative work is available; the effect of the absence on the team, business unit and organisation; whether the illness/injury is a result of a disability (see Part 2 section 1.8 for more information on

the Act). 3.3 Terminal Illness In cases of terminal illness, the manager should consult with the HR Manager and Group Pensions to ensure the terminal illness process is followed. 3.4 Facilitating a Return to work To enable an individual to return to work, the manager may have to consider a period of rehabilitation. This may include a temporary period of reduced hours, limited duties etc. It is important that specialist advice from the Occupational Health Team and / or the individual’s GP/ Specialist is sought on this issue if appropriate and also that there is a clearly agreed and documented time-scale for such rehabilitation. A phased return to full hours/duties will not extend beyond 4 weeks, during which period the individual will receive pay for their full contracted hours. When an individual returns to work, even in cases of temporary limited duties or reduced hours, medical advice should be sought. There may be occasions whereby a permanent change in role and/or reduction in hours is required for medical reasons. In these cases, the offer of revised working arrangements should be made to the individual. This must only be implemented on the basis that the individual is voluntarily accepting a variation to their contract and will be employed under the salary and other terms and conditions normally associated with the new role. 3.5 Termination of Employment As the absence continues there may come a time where, for operational reasons, the manager may have to consider termination of employment. No decision to terminate employment will be taken without reviewing medical evidence and consulting with the individual. Where the decision is to terminate employment then, depending on individual circumstances and the relevant pension scheme criteria being met, an ill health pension may be payable.

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Prior to reaching any decision to terminate a colleague’s employment the individual’s manager must consider:

Previous discussions with the individual about their absence / employment The possibility of redeployment Timetable for recovery and likelihood of returning to work Impact on the job, department and colleagues of continued absence The length of absence to date Whether the illness is as a result of a disability

In cases where the employee has a disability the manager should assess whether there are any reasonable adjustments that can be made to enable the employee to continue in employment. An individual’s employment is likely to be terminated when:

He / she is permanently incapable on medical grounds of undertaking their or any other available role within the organisation, or

He / she is likely to remain absent for medical reasons for such a period that the company decides it cannot reasonably continue their employment any longer, considering the need for the job to be done.

There is no fixed time period before this decision will be reached, however managers should ensure the efficient management of all cases. It may take immediate effect in the case of terminal illness or where it is apparent early in the sickness absence that a disabling illness injury / illness will result in long term incapacity. 3.5.1 Referral to Occupational Health Prior to any meeting with the employee which may result in the termination of employment on the grounds of incapacity, an up to date medical report should be sought from the Occupational Health Team again it may be necessary to procure medical reports from the employees GP/ Specialist. Before making the referral the manager should consult with HR to confirm if the employee is a member of a pension scheme and where appropriate which scheme. In addition, the manager should also discuss with the individual that a referral has been made and the reason for the referral i.e. the possibility of termination of employment. It is recommended that a copy of the medical referral form, along with any accompanying questions is sent to the individual prior to the medical appointment. When making a referral it is important that managers ask the Occupational Health Team the following questions:

• Can this person be rehabilitated into their current role and what adjustments if any will be required to the individual’s current role / work environment to facilitate a return to work?

• What are the likely timescales for a return to work and return to current role / hours? • Can this person be redeployed into an alternative role, what types of work will they be able to

carry out? What are the likely timescales for a return to an alternate role? • Does this person meet the criteria specified in the appropriate pension scheme to qualify for ill

health retirement benefits? The Occupational Health Team should be provided with information as to what previous rehabilitation / redeployment opportunities have been explored. In addition, where appropriate, details of the individual’s pension scheme should be provided to enable the Occupational Health Physician to review the individual’s case in accordance with the relevant ill health benefit criteria. Note access to pension can only be granted but the Occupational Health Physician and this appointment is arranged only at the point at which all the medical evidence is available. 3.5.2 Formal Review Meeting with Line Manager

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Once the line manager has established all the relevant information (including medical advice) and is ready to discuss the situation with the individual, the manager should invite the individual in writing to attend a formal review meeting. The employee may be accompanied at this meeting by a colleague or trade union representative. At this meeting, the manager will present the relevant information, including medical advice and seek comments and clarification. The potential outcomes must also be discussed, i.e. return to work, redeployment, termination of employment (with or without retirement pension). Managers are responsible for ensuring an accurate record is kept of all discussions held at the meeting; this ensures a fair and consistent approach is maintained throughout the process. Following the meeting the employee should be sent a letter confirming the key points of the discussion and the next steps. 3.5.3 Case Review Once the line manager has determined that termination appears to be the most likely outcome based on all of the circumstances, it is advised that a case review with the Employee Relations Manager is arranged. Where required, other parties may be invited e.g. a member of the Occupational Health Team, Group Insurance or Group Pensions representative. A case review will not normally be necessary in cases of terminal illness.

The case review will critically examine the case for termination of employment and provision for ill health pension to ensure that all appropriate measures have been taken in line with the Act and Conduct & Capability Policy. From this an action plan should be formulated involving any further actions needed and/or the type of Incapacity Termination to be proposed. Full details of the case review must be recorded including reasons for outcomes. If the recommendation following the formal review meeting and case review is to terminate the individual’s employment, the line manager should present a written report to their senior manager (with dismissal authority). The report should include a summary of the case history and the justification for termination of employment. If the individual also meets the ill health pension criteria a report should also be presented detailing the recommendation for the provision of ill health retirement benefits within the appropriate pension scheme. 3.5.4 Employment Review Meeting with Senior Manager Based on the information presented by the individual’s manager and on the advice of HR and Occupational Health, the Senior Manager with dismissal authority will arrange an Employment Review Meeting with the individual to consider the situation and decide whether dismissal is appropriate. The individual should be informed in writing of the purpose of the meeting and provided with a copy of the absence policy at least 2 days before the review meeting. The letter should make clear that dismissal may be a possible outcome of the meeting and should also confirm the individual’s right to representation. In advance of the meeting individuals should be provided with any documentation that will be referred to in the meeting. Alternatively, an adjournment of sufficient length should be given during the review meeting. At the meeting the individual should be given the opportunity to discuss the general situation and raise any points they wish to be taken into account. They may be accompanied at this meeting by a colleague or trade union representative. It should be made clear to the individual the seriousness of the situation. Before making a final decision the Senior Manager, with the support of HR should give the following careful consideration:-

• Any issues raised by the individual or their representative

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• Medical reports / advice provided by Occupational Health Nurse Practitioner / Occupational Health Physician

• The recommendations put forward from the case review • The outcome of the search for redeployment opportunities • Timetable for recovery and likelihood of returning to work • Impacts on the department and business of continued absence • The length of absence to date • Is absence a result of a disability and has company acted reasonably in line with the Act • Is the individual eligible for an occupational ill health retirement (n.b. this is not a determining

factor in the decision to dismiss). • The Long Term Absence Procedure has been adhered to.

The result of this decision should be provided to the individual in writing together with notification of their right to appeal to a more senior level of management. Where the individual meets the ill health pension criteria the Senior Manager should refer the individual to Group Pensions. It is recommended that a separate meeting will be arranged with the individual, Group Pensions and HR to discuss through the pension benefits and process in more detail. If the individual is dissatisfied with the decision regarding ill health pension provisions, this will be dealt with outside the dismissal appeal process. 3.6 Right of Appeal Employees have the right to appeal against termination of employment. This right of appeal applies in all dismissal cases including where ill health retirement benefits are awarded. This should be explained in writing by the manager making the decision, including details of who to address the appeal to. If they wish to exercise this right, the appeal must be registered in writing to the manager who will be hearing the appeal, within 7 calendar days of receiving the written notification of the decision, stating the grounds for the appeal. An appeal can be made on grounds of:

• perceived unfairness of the decision • disputing the facts of the case including new evidence coming to light • insufficient consideration of redeployment possibilities • disability and issues of reasonable adjustment • insufficient consultation / discussion leading up to decision to terminate

The ground(s) of appeal and facts relied upon in support should be clearly stated in the written appeal. The employee should be invited in writing to attend an appeal meeting within 14 days of the notification of appeal being received. Employees should be notified of their right to representation and should be given at least 2 days’ written notification of the scheduled appeal hearing. Where an individual is unable to attend the scheduled hearing, the hearing should be rescheduled at least once before it is heard in their absence. Where possible the manager hearing the appeal will be the manager of the person who made the original decision. However, there may be occasions when the organisation structure prevents this from happening. In such instances a senior manager from another part of the business may hear the appeal and every effort should be made to ensure that this manager (hearing the appeal) is more senior than the manager who made to the original decision, although it recognised that this may not always be practicable. If an individual refuses without reasonable grounds to attend a scheduled hearing, the manager should proceed in their absence.

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The manager hearing the appeal should not have had any previous active involvement in the decision which is being appealed and should be supported by a representative from HR. At the appeal meeting the manager will consider the points on which the appeal is based, together with any supporting evidence provided by the employee and their representative. In addition, the manager who made the original decision may be invited to respond and put forward their case. The manager hearing the appeal may also request further investigations/evidence as they see fit in order to review the case. The manager hearing the appeal may uphold the original decision of dismissal or may choose to re-instate or re-engage the individual. The employee should be notified in writing within 14 days of the appeal decision and advised there is no further right of appeal.

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3.6. Summary of Long Term Sickness Absence Procedure This flow chart is a summary of the key steps of the Long Term Sickness Absence Procedure and should be used in conjunction with the detailed procedure. Employee absence appears long term

Communication and on- going review - immediate manager to maintain regular informal contact - consider occasional home visits - consider referral to occupational health after 14 days absence - Day 1 referral for Stress and Muscular Skeletal Absences - establish if “Disabled” within the meaning of the Act

Options Return to work Redeployment Dismissal - managed return based on - dependant upon medical advice Considerations medical advice (reduced; - ensure responsibilities under the Act - impact of their absence workload, hours, days of are understood and followed through on business work) - redeployment opportunities - work to an agreed timetable - timescales for recovery and review regularly - medical advice on current fitness

for work and likely future capabilities Dismissal is likely - liaise with Pensions if a scheme member - if Disabled – consider legal responsibilities - establish the full facts In cases of terminal illness, refer to the process outlined in the sickness absence

guidelines Formal Review Meeting with Line Manager

- present facts and medical evidence - seek clarification - consider employees comments - discuss options - right to representation

Case Review Review case and agree next steps Depending on outcome of case review - recommend dismissal to Senior Manager Formal Meeting with Senior Manager - invite verbally and in writing - right to representation

- present facts and medical evidence - consider employees comments - employment terminated with notice - right of appeal

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PART 3 - PERFORMANCE IMPROVEMENT Index Section 1 – Performance Improvement Policy 36 1.1 Introduction 36 1.2 Responsibilities 36 Section 2 – Performance Improvement Procedure 37 2.1 Identification of performance issues and informal counselling 37 2.2. Formally managing performance 37 2.2.1 Stage 1 Formal Review Meeting 38 2.2.2 Stage 2 Formal Review Meeting 39

2.2.3 Stage 3 Formal Review Meeting 39 2.2.4 Stage 4 Formal Review Meeting 40

2.3 Ongoing monitoring and review 40 2.4 Right of Appeal 41 2.5 Pay for Performance 41 2.6 Summary of Performance Improvement Procedure 43

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SECTION 1 - PERFORMANCE IMPROVEMENT POLICY 1.1 Introduction All employees have a responsibility to perform to the standards expected in their role. The Company will ensure that employees understand what is expected and how they are doing, through the setting of realistic and measurable performance objectives, with on-going reviews and feedback. Where improvement is needed, the Company will provide appropriate training and support. There may be occasions when an individual’s performance falls below what is expected. Where this is due to carelessness, negligence or deliberate lack of application, these failings constitute misconduct and as such should be dealt with under the disciplinary procedure. However, there are situations where an individual is performing below the required standard because they do not have the appropriate capability for the role. This situation can arise, for example, where someone has been recruited into a job for which they were not really suitable, or where someone has been unable to develop their skills/knowledge to match the needs of the job over time, e.g. due to changes in technology, new ways of working etc. These situations are normally resolved through coaching and timely feedback, without the need for formal action under the Performance Improvement Procedure. However, when the level of performance consistently or noticeably falls below the expected level then action should be taken. When dealing with an individual whose performance is less than satisfactory, the objective of the Manager should be to understand the issues, provide encouragement, coaching, training and guidance and support to individuals to help them achieve and maintain a satisfactory level of performance. Before taking any formal action as detailed in this policy it is imperative that other means of promoting increased performance have been considered – for example; coaching the individual, agreeing and fulfilling any training needs, ensuring the individual understands their role and responsibilities. It is expected that individuals taking up a new role will require a period of development and would not normally fall within the remit of this policy. However, if the employee fails to achieve what is reasonably expected of them, even in a new role, it is recognised that there may be occasions where this policy should apply. 1.2 Responsibilities In managing their team’s performance the line manager should:

• agree clear, realistic and measurable standards of performance • communicate expectations clearly to their team members • provide regular feedback on all performance including exceptional and poor performance • deal with cases of poor performance promptly, advising and supporting individuals throughout the

process • undertake regular performance reviews with every employee • keep HR involved and up to date with ongoing performance cases

Individuals should use all reasonable endeavours to achieve the required levels of performance. They should take ownership of their ongoing development and training needs and highlight any areas of concern with their manager. If, during discussions regarding a potential performance issue, the employee reveals personal problems affecting their work, the manager should discuss this with a view to agreeing a way forward. It may be that the individual can be given a period of time to work through their problems. However, in the longer term, an individual should not let personal problems affect their work performance and if personal problems continue to affect their performance, this policy should be followed through.

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SECTION 2. PERFORMANCE IMPROVEMENT PROCEDURE 2.1 Identification of Performance Issues and informal counselling Once a performance issue has been identified the manager should gather any necessary evidence and discuss this with the individual. It is important that the individual understands the manager’s concerns – the actions, omissions or behaviours which have resulted in the need for an improvement. In particular the individual should be given the opportunity to explain any reasons for the performance problem. This is particularly important when the individual was previously performing well and no obvious changes to the job, standards required etc. have occurred. There should be a review of any coaching/training provided and a discussion about why this has not resulted in improved performance. Areas of difficulty and problems should be highlighted and solutions sought. Managers should take into account personal circumstances – e.g. short term domestic problems, where these are brought to light by the employee. Following the above discussion it is important to agree an action plan for improvement that is written down with clear performance targets and time-scales. The time-scales agreed should reflect the time reasonably needed to reach acceptable levels of performance. Particular attention should be paid to any training or development requirements that may be needed to meet the action plan. In addition managers may need to seek advice from HR and Occupational Health, especially if health issues are impacting on the individual’s ability to perform their job to the required standards. There may also be implications with the Act. (See Part 2, Section 1) 2.2 Formally Managing Performance Where there has been insufficient improvement in performance after counselling, training / development and supporting interventions which have been agreed through on-going performance management discussions, the formal performance improvement procedure should commence. At each stage of the formal procedure the employee should be informed in writing of the purpose of the meeting and provided with a copy of the performance improvement policy at least 2 days before the review meeting. The invitation should also confirm the individual’s right to representation. In advance of the meeting individuals should be provided with copies of any documentation that will be referred to in the meeting e.g. performance improvement plan, quarterly review documents. Alternatively, an adjournment of sufficient length should be given during the review meeting. There may be occasions where both parties agree to waive the minimum two days’ notice period. In these cases the review meeting may go ahead provided that written notice of the meeting and its purpose has been given. All formal meetings will be organised at a reasonable time when all parties concerned are available. If an employee is unable or fails to attend a formal meeting that has been communicated to them, after re-arranging the meeting once, it is for the manager to consider in the circumstances if it is reasonable to continue in their absence. For example, if a formal meeting is re-arranged and the employee refuses without reasonable grounds to attend the rescheduled meeting, the manager should proceed in their absence For employees with less than 6 months continuous service the manager has the discretion to enter the procedure at Stage 4, even where there have been no previous formal stages. 2.2.1 Stage 1 Review Meeting This is the first stage of the formal procedure to manage an individual’s unsatisfactory performance. This stage of the procedure will be automatically triggered following two unsatisfactory quarterly reviews (i.e. “improvement needed” for YWS employees and “did not achieve” for LOOP employees) but can

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commence sooner where a performance issue has been clearly identified and after a reasonable period of informal counselling (coaching / training) an individual’s performance still remains unsatisfactory. In reviewing performance the line manager should present clear examples to illustrate the areas of unsatisfactory performance and discuss the following:-

• Whether the individual considers they are properly matched to their role. • Whether the individual considers they have a disability which might be affecting their

performance. • Whether there are any health reasons or any personal, domestic, financial or other

circumstances, which might be affecting their performance. • Where it is appropriate to seek medical information and / or support from the Occupational Health

Team. There are two possible outcomes of a Stage 1 review meeting, which will be confirmed in writing to the individual. These are:- First stage warning No formal action is required at this stage If there is a need for further improvement the individual will be given a first stage warning and will be provided with clear expectations of what level of improvement is required and in what timescales. (N.B. The timescales in which future improvement is required does not necessarily have to be the same timescales as the expiry period of the warning) The manager will determine when the next review will take place (e.g. based on reasonable targets and timescales) and will make clear the potential consequences of continuing to fail to meet acceptable levels of performance. The warning will expire after 6 months. Timescales for improvement should reflect the amount of time needed to provide the opportunity to perform the activities, display the skills etc which have been identified as requiring improvement. This will vary according to the role, e.g. shorter review periods would apply to roles which involve repeated, short-cycle activities. The letter will include a ‘Performance Improvement Plan’ which details:

1. objectives/duties/responsibilities where performance is below expectations 2. the levels of performance expected e.g. productivity, accuracy; behaviours/values 3. the improvements needed to reach these levels 4. any additional interventions to support the improvement, e.g. training 5. the timescales within which improvement is required before the Stage 2 review

Where no formal action is taken, support and encouragement should be given to the individual and a review / monitoring period should be agreed. The individual should be advised that if their performance deteriorates, then it could result in future formal action. The outcome of the meeting should be confirmed in writing. Individuals will have the right to appeal against the outcome of a Stage 1 meeting (see 2.4 below). 2.2.2 Stage 2 Review meeting Where a first stage warning was awarded at Stage 1 and there has been no significant improvement in performance levels i.e. targets have not been met within the defined timescales, a Stage 2 Meeting should be arranged. (N.B. If performance levels deteriorate following the expiry period of the first stage warning, Stage 1 should be re-commenced).

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The meeting should follow the same format as Stage 1, with managers presenting clear examples of unsatisfactory performance and exploring any underlying issues and supporting interventions. If advice from occupational health has been sought, the findings should be shared and discussed in the meeting. If any recommendations for reasonable adjustments have been made these should be explored fully. If there has been no sustained and significant improvement, the individual will be given a second stage warning and will be provided with clear expectations of what level of improvement is required in the future and when the next review will take place e.g. based on reasonable targets and timescales. (N.B. The timescales in which future improvement is required does not necessarily have to be the same timescales as the expiry period of the warning). The warning will expire after 12 months. The outcome of the Stage 2 Review will be confirmed in writing to the individual and will make clear the potential consequences of continuing to fail to meet acceptable levels of performance. Individuals will have the right to appeal against the outcome of a Stage 2 meeting (see 2.4 below). 2.2.3 Stage 3 Review Meeting Where a second stage warning was awarded at Stage 2 and there has been no significant improvement in performance levels i.e. targets have not been met within the defined timescales, a Stage 3 Meeting should be arranged. (N.B. If performance levels deteriorate following the expiry period of the second stage warning, Stage 1 should be re-commenced). The meeting should follow the same format as Stage 1, with managers presenting clear examples of unsatisfactory performance and exploring any underlying issues and supporting interventions. If advice from occupational health has been sought, the findings should be shared and discussed in the meeting. If any recommendations for reasonable adjustments have been made these should be explored fully. If there has been no sustained and significant improvement, the individual will be given a final written warning and will be provided with clear expectations of what level of improvement is required in the future and when the next review will take place e.g. based on reasonable targets and timescales. (N.B. The timescales in which future improvement is required does not necessarily have to be the same timescales as the expiry period of the warning). The warning will expire after 12 months. The outcome of the Stage 3 Review will be confirmed in writing to the individual and make clear the potential consequences of continuing to fail to meet acceptable standards. The letter detailing the Stage 3 outcome must make it clear that this is a final opportunity to improve and that dismissal may be the result of any future failures within the time-scale. Individuals will have the right to appeal against the outcome of a Stage 3 meeting (see 2.4 below). 2.2.4 Stage 4 Review meeting Where a final written warning was awarded at Stage 3 and there has been no significant and sustained improvement in performance levels i.e. targets have not been met within the defined timescales, a Stage 4 Review Meeting should be arranged. (N.B. If performance levels deteriorate following the expiry period of the final written warning, Stage 1 should be re-commenced). The Stage 4 Review meeting will be at the end of the process of managing an individual’s unsatisfactory performance. As such, the purpose of the interview is to make a decision about their future employment, taking all factors into consideration. For employees with less than 6 months continuous service the manager has the discretion to enter the procedure at stage 4, even where there have been no previous formal stages. The outcome of a Stage 4 meeting will be:

A further review period and support to improve performance levels (N.B For this outcome the final written warning may be extended and will expire after 12 months), OR

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Agreed transfer to another, more suitable, role (if available), at an agreed salary appropriate to the new role, OR

Redeployment with an extended final written warning, OR Termination of employment on the grounds of incapability

Dismissal is an extremely serious step, and may only be taken by a Senior Manager with Dismissal authority (or a nominee acting on behalf of the Senior Manager) acting with the advice of an appropriate representative from the Human Resources Department. In any event, the Senior Manager making this decision should not have been involved in the previous Stages. Colleagues are entitled to be represented at the Stage 4 meeting by a trade union representative or work colleague. The individual has a right to appeal against the Stage 4 outcome, to a more senior level of management (see 2.4 below). 2.3 On-going monitoring/review The purpose of all Review Stages of the procedure is to help the individual to achieve expected standards of performance. Following any stage of the procedure, the line manager has the responsibility to provide the individual with continuing feedback on how the action plan/interventions are progressing. Feedback, both positive and negative, should not be saved for the next Review Stage. Indeed, it is important to recognise that earlier feedback could lead to improvements in performance which might obviate the need for further formal Stages. Throughout this procedure, it may be necessary to hold a formal review before the end of the original review period. This is likely to happen only in exceptional circumstances and the reasons should be clearly explained to the individual. If at any point in the process it is shown that below standard performance is not as a result of incapability, but due to an individual’s misconduct, then action should be taken under the disciplinary procedure. 2.4 Right of Appeal Employees have the right to appeal against the outcome of any formal Stage within the procedure. This should be explained in writing by the manager when confirming the outcome of the review meeting, including details of who to address the appeal to. If they wish to exercise this right, the appeal must be registered in writing to the manager who will be hearing the appeal, within 7 calendar days of receiving the written notification of the decision, stating the grounds for the appeal. An appeal can be made on the grounds of:

• perceived unfairness of the decision • disputing the facts of the case including new evidence coming to light • procedural non-compliance • severity of the stage within the procedure

The ground(s) of appeal and facts relied upon in support should be clearly stated in the written appeal. The employee should be invited in writing to attend an appeal meeting, which will normally be held within 14 days of their notification of appeal being received. Employees should be notified of their right to representation and should be given at least 2 days’ written notification of the scheduled appeal hearing. Where an individual is unable to attend the scheduled hearing, the hearing should be rescheduled at

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least once before it is heard in their absence. If an individual refuses without reasonable grounds to attend a scheduled hearing, the manager will proceed in their absence. Where possible the manager hearing the appeal will be the manager of the person who made the original decision. However, there may be occasions when the organisation structure prevents this from happening. In such instances a senior manager from another part of the business may hear the appeal and every effort should be made to ensure that this manager (hearing the appeal) is more senior than the manager who made the original decision, although it recognised that this may not always be practicable. The outcome of the appeal will be confirmed in writing within 14 days of the hearing. The manager hearing the appeal should not have had any previous active involvement in the decision which is being appealed and should be supported by a representative from HR. At the appeal meeting the manager will consider the points on which the appeal is based, together with any supporting evidence provided by the employee and their representative. In addition, the manager who made the original decision may be invited to respond and put forward their case. The manager hearing the appeal may also request further investigations/evidence as they see fit in order to review the case. The manager hearing the appeal may uphold or withdraw the original penalty. Where the penalty was dismissal, if the individual is re-instated or re-engaged, the hearing manager may impose an extended final written warning. The employee should be notified in writing of the appeal decision within 14 days and advised there is no further right of appeal. 2.5 Pay for Performance (this is applicable to employees of Yorkshire Water Services,) There are clearly performance issues if an individual is following the Performance Improvement Procedure, therefore the performance assessment would be “improvement needed” (or “Did not Achieve” for Loop employees) until such time when the performance improves to a satisfactory level. There may occasionally be circumstances when an employee who is already undergoing formal or informal performance management is issued with a disciplinary warning for misconduct. In this situation, the individual’s assessment rating will be “unsatisfactory conduct” on the performance management documentation, and on MSS. The manager should also note on the performance management documentation that there is an on-going performance issue. It is important to note that the performance management process will continue or commence alongside the disciplinary warning, and subsequent action may be taken under the performance management process if there is insufficient improvement in performance. A record of all performance and conduct discussions will be held on the employee’s file. For example: Employee A has been with the company for 2 years. Six months ago, their manager identified issues with their performance and arranged support in the form of training, coaching and mentoring sessions. Unfortunately the individual is still not performing to the required standard. The employee has been issued a first stage warning for performance and their performance is still being closely monitored and managed. The individual’s performance rating has been listed as ‘improvement needed’ on the system for the last two quarters. In the past two weeks, the employee has been disciplined for poor timekeeping, and has received a first stage warning for conduct. In their performance review for the current quarter, their manager will discuss both their conduct and their work performance, and then record their rating as “unsatisfactory conduct” on MSS. In the paperwork for the meeting, the manager will also need to note that there is an on-going performance issue. The following quarter, as long as there are no further conduct issues, and if there is insufficient improvement in performance, the manager will record ‘improvement needed’ on MSS.

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2.6 Summary of Performance Improvement Procedure This flow chart is a summary of the key steps of the Performance Improvement Procedure and should be used in conjunction with the detailed procedure. Ongoing Management of Performance

- set performance requirements - identify training needs and performance gaps

- agree training / development solutions - review and assess individual contribution and competence Performance Improvement Requirement Identified

• Informal counselling and support • significant area of improvement identified • training & development needs are identified • performance improvement plan developed

Stage 1 Review Meeting - establish reasons for poor performance - establish any training needs - consider any health issues or if disabled - discuss future expectations - agree measurable and realistic targets / time periods - if no improvement issue first stage warning - confirm outcome in writing - right of appeal Stage 2 Review Meeting - review progress during review period against expectations - explain level of improvement required - if no improvement issue a second stage warning - confirm review period / targets

- confirm outcome in writing - right of appeal

Stage 3 Review Meeting

- review progress during review period against expectations - explain level of improvement required - if no improvement issue a final written warning - confirm review period / triggers - confirm outcome of stage 3 meeting in writing - right of appeal

Stage 4 Review meeting To be conducted by appropriate Senior Manager - further opportunity to improve performance - Dismissal or transfer of role - confirm review period and outcome - confirm outcome in writing - right of appeal - right of appeal

If there is no significant and sustained improvement

If there is no significant and sustained improvement

If there is no significant and sustained improvement

If there is no significant and sustained improvement