How to write a grievance policy for your small business + free template

A grievance policy at work is a legal requirement, but if you’ve never written one before then how do you know where to start?

It's my job to help small business owners create HR policies and procedures that encourage a high-performance culture, drive business growth, and support their employees. 

And I’ve written this guide to help you write a grievance policy for your own small business.

We’ll look at what a grievance policy is, and how it supports the grievance procedure, and then link to a free grievance policy template that you can download, customise and use today. 

By the end of this guide, you’ll have everything you need to confidently put your own grievance policy in place. 

What is a grievance policy?

A grievance policy is a formal, step-by-step procedure for employees and leadership to take to raise concerns, complaints, or issues in your workplace.

These grievances can range from interpersonal conflicts to contract disputes. If an employee tries to resolve a problem informally but isn’t satisfied with the outcome, they can take matters further and make a formal grievance complaint in writing.

Your grievance policy serves as a way to resolve any disputes and workplace grievances in a way that’s fair, transparent, and consistent. It shifts the balance of power back to your employees and gives them a way to feel heard and valued when they feel put on.

What is a grievance procedure?

A grievance procedure is the formal process that your grievance policy sets out in writing.

If someone feels that a problem at work cannot be settled informally (or doesn’t want it to be), they can raise a grievance. In raising a grievance, they set the grievance procedure in motion. 

The grievance procedure has a structure that both the employer and the employee must follow — and is typically used when attempts at informal resolution have failed, or for problems that are serious in nature. 

Why do you need a grievance policy?

It’s a legal requirement for employers to have their grievance procedures in writing so they can be easily accessed by their teams. 

Your grievance policy could be shared in an employee handbook or in your employment contracts, and it must include details of who to contact about a grievance, and how to contact them. 

Should a small business have a grievance policy?

Like any business, a small business doesn't get special treatment and also needs to get this policy in the company handbook.

Remember that, as a small business, you'll have a much harder time recovering from a potential fine, especially if it happens at the beginning of your venture, so cover your HR basics.

Want to cover your HR basics? Invest in HR software like Charlie. Start a free trial today.

Legal requirements for grievance procedures in the UK

Generally speaking, a grievance procedure will have you take the following steps:

Step 1: How to raise a grievance

Your employee should first try to raise the grievance informally before taking action, and take up the matter either with the team member involved or their immediate hiring manager.

If informal resolution is not possible, the employee should submit their grievance in writing. The written grievance should outline the complaint and any attempts at resolution.

The employee can raise a grievance if:

• an informal resolution has not been successful
• they don’t want to deal with it informally
• or if it's a more serious issue such as sexual harassment or whistleblowing.

Your employee should check your grievance procedure policy to find out how to submit a formal grievance and who they should send the grievance letter to. If you don’t have one, they should come to their line manager first.

Step 2: Acknowledgement of receipt

Acknowledge receipt of the grievance in writing, and set out the expectations for the next steps and timelines for the grievance procedure process.

Step 3: The grievance meeting

When you receive a formal grievance, you should respond to hold a grievance meeting with the employee. The meeting should be arranged “without unreasonable delay” - typically within five business days.

Inform the employee of their right to be accompanied by a coworker or trade union representative during the meeting.

During the meeting, the employee should explain their grievance and how they would like it to be resolved.

On your side, here's what you need to do:

• Listen carefully
• Ask questions
• Take detailed notes and document them for later reference

With HR software like Charlie, you can even store documents that you can hold onto for your grievance meeting until you need them again, if that can be helpful for you and your team.

After the meeting:

• Give the employee any notes you took
• Ask them to confirm that the notes are accurate
• Tell them when they should expect a decision

Step 4: Investigation

If needed, conduct an inquiry into the matter:

• Gather information and proofs
• Get testimonies from all parties concerned
• Set up another grievance meeting if more information comes to light
• Ensure that you remain as objective and impartial as possible

Step 5: Decision and communication

After you get any information you need and ask any follow-up questions:

• Make a decision based on what you learned
• Communicate your decision to the employee in writing
• Include a summary of your findings and the reasoning behind your decision

If you support the employee’s grievance, let them know what action you’ll take to make sure the decision is upheld.

Step 6: Appeal process

If the employee doesn’t agree with your decision or they don’t believe it resolves the problem, they have the right to take things further with an appeal.

After you make your final decision, inform your employee of this right and the process for appealing.

External resolution options

You can also suggest mediation as an option for resolution at any stage in the grievance process.

For any grievances that can’t be resolved with a few closed-door conversations, you can suggest that a mediator help make a decision. The mediator should be an independent and impartial person working with both sides to find an agreeable solution for both parties.

FAQs on grievance procedures

There are a few questions I see pop up at this stage when I advise startups and small businesses on their grievance policy. These are some of the most common ones and my best answers.

1. What should an employee do if their grievance involves their manager?

The employee should submit their grievance to another person within the organisation – for example, their manager's manager or an HR representative. Your grievance policy should specify an alternative for these situations.

2.What are the barriers for small businesses needing to write a grievance policy?

No business is the same, but there are common themes affecting smaller companies. And they can stop you from writing your own grievance policy:

• Limited resources - small HR teams usually have fewer resources, which makes it challenging to dedicate sufficient time to grievances, even though you know they need to be dealt with promptly and thoroughly.
• Informality vs. formality is a balancing act - striking the balance between maintaining a relatively informal small business culture and establishing formal procedures for grievance resolution can be hard. How do you create a policy that is both accessible and effective? Think as well about creating policies for diversity and inclusion as well as equal opportunities to make sure you cover all aspects of it.
• Lack of expertise - in small business, most people wear multiple hats, but you may be lacking expertise in conflict resolution. This hinders your ability to navigate complex grievances such as bullying and harassment. 
• Legal compliance - staying on top of ever-changing employment laws and regulations is a big headache! With fewer resources for legal support, you’ve got to rely on your own knowledge to ensure your grievance policy aligns with the current legal standards.

3. Who should attend a grievance meeting?

The meeting should include you, the employee raising the grievance, their accompanied representative if any, and if possible an HR manager not involved in the grievance.

4. Can employees be disciplined for raising a grievance?

No, employees cannot be subjected to any form of punishment for raising a grievance in good faith. That protection is needed to encourage open dialogue and fair resolution.

Keeping the steps in the grievance procedure accessible for all parties helps to facilitate dialogue and build trust in your team - especially when you can control who sees it and make sure the sensitive details don’t get into the wrong hands.

What should be included in a grievance policy?

Your grievance policy at work must include details of:

• Who to contact about a grievance, and how to contact them.

It should also:

• Inform employees that grievance meetings, also known as a grievance hearing, will take place if the problem cannot be resolved informally 
• Set out the expected timeframe for the grievance procedure
• Provide an alternative contact if the primary point of contact is unavailable or involved in the grievance
• Make it clear that employees can have another colleague or union representative present with them at the meetings
• Say what happens if someone raises a grievance during disciplinary action
• Outline the process for appealing the grievance outcome.

It’s not a requirement that you include information about your grievance policy in your employment contracts. But it’s important to note that if you do and don’t follow procedure, an employee can claim breach of contract. 

Grievance policy template

Managing a grievance at your own small business is likely to be stressful. In smaller teams, you’ll probably have to navigate personal as well as professional relationships, so the situation may be especially delicate. 

As a fellow small business, we understand these nuances at Charlie. What works for a bigger company may not always be applicable or suitable in a small business setting. 

For that reason, I'm sharing our own grievance policy as a template, which you can use as is, or edit and adapt to better suit your own team. 

Our grievance policy template is designed for UK small businesses and is free to download:

Having a grievance policy will make any future grievances much easier to handle, and this template will make it much easier for you to put one in place. 

With Charlie, you can also store all your HR policies in our software so that everyone can access them at any time.

This means there is full visibility of your grievance procedure, and your team feels encouraged to raise complaints or address problems in a timely, efficient and supported way.