The call usually comes on a Friday. Money is missing from the till, a customer has made an allegation, two members of staff have had a physical row in the yard, or something has turned up on a shared drive that nobody can explain. The instinct of almost every owner is identical: get them out of the building, today, and work out the rest on Monday.
That instinct is understandable and often half right. What makes it expensive is doing it badly — suspending as a punishment, on reduced pay, with no explanation, and then treating the suspension itself as evidence that the allegation must be true.
Suspension is a neutral act, and has to look like one
Acas is explicit that suspension does not mean an employee has done anything wrong and should not be used to discipline someone. It is a temporary measure to protect the investigation, the business, other staff, or the person being investigated — and you should only use it if you reasonably believe it achieves one of those things.
Before reaching for it, work through the alternatives Acas expects you to have considered: changing shifts or the site someone works at, moving them to different duties, taking them off customer contact, having them work from home, or removing access to particular systems. In a five-person business those options can feel unavailable, but even a partial alternative is worth documenting, because the question a tribunal asks later is not whether you were entitled to be worried — it is whether suspension was a reasonable response to the specific risk.
If you do suspend, it is on full pay, with contractual benefits intact. Withholding pay during suspension risks breaching the contract even where the contract appears to permit it, and a breach of that kind is the fastest route from an investigation you were going to win into a constructive dismissal claim you were not expecting.
Getting the first conversation right
Tell the person in private and in plain terms: the nature of the allegation, that suspension is not a disciplinary sanction and is not a decision about guilt, who to contact while they are away, and roughly how long you expect it to take. Confirm it in writing the same day. Ask them not to contact colleagues about the matter, and be specific about what they can do — a blanket instruction to have no contact with anyone at work for three weeks is disproportionate and reads badly later.
Keep it short. An unreasonably long suspension is one of the most common ways an employer damages its own position, partly because it starts to look punitive and partly because it corrodes the relationship of trust and confidence the contract depends on. Review it weekly and record the review.
Suspension is the pause button, not the verdict. The moment it starts functioning as a punishment, you have converted a disciplinary matter you could defend into a contract claim you cannot.
The investigation, then the hearing — never the two at once
The process has a shape, and the shape matters as much as the conclusion. Investigate first: gather the evidence, take statements, look at the CCTV or the till reports, and speak to the employee about their side of it. Then decide whether there is a case to answer. Only then hold a disciplinary hearing.
Where you can, have different people do the investigating and the deciding, and a third person hear any appeal. In a very small business that is not always possible, and tribunals accept that — what they do not accept is nobody having thought about it. If one person has to do two roles, say so, explain why, and be scrupulous about approaching the hearing with an open mind.
Invite the employee to the hearing in writing, with enough notice to prepare, setting out the allegations, enclosing the evidence you are relying on, and stating the possible outcomes — including dismissal, if dismissal is genuinely on the table. Workers have a statutory right to be accompanied at a formal disciplinary hearing by a colleague or a trade union representative, and that right needs to be in the letter, not discovered afterwards.
At the hearing, put the allegations, hear the response, and be willing to adjourn to check something that comes up. Then decide, tell them the outcome in writing, and offer a right of appeal. Notes at every stage, kept as though someone else will read them, because someone else might.
Why the process is worth more than the paperwork suggests
The Acas Code of Practice on disciplinary and grievance procedures is not law, and not following it is not illegal. But where an employee wins a tribunal claim and the employer unreasonably failed to follow the Code, the award can be increased by up to 25%.
Put figures on that. Take an employee on £32,000 who is dismissed for something they probably did, but after a process with no investigation, no written invitation and no appeal. The tribunal finds the dismissal procedurally unfair and awards, say, six months' lost earnings of £16,000. A 25% uplift for failing to follow the Code adds £4,000, and there is a basic award on top, calculated from a week's pay capped at £751 for dismissals on or after 6 April 2026. The paperwork that would have prevented most of that would have taken an afternoon.
The ceiling matters too. The maximum compensatory award for unfair dismissal is £123,543, or 52 weeks' gross pay if lower, for dismissals from 6 April 2026 — and that cap is due to be removed from 1 January 2027, the same date the qualifying period for unfair dismissal drops from two years to six months. If you have been relying on short service as your safety net, that safety net is about to get considerably smaller.
The small-business version
Most owners will handle a handful of these in a working lifetime, so the goal is not fluency — it is having a written procedure to follow when your judgement is compromised by anger or panic. Write it now, while nothing has happened: who investigates, who decides, who hears appeals, what gets confirmed in writing and when.
And keep the two registers separate in your head. Conduct that is genuinely gross misconduct — theft, violence, serious breaches of health and safety — can justify dismissal without notice, but only after a fair process. Everything below that belongs in the ordinary run of managing people badly performing, which starts with a conversation and, if it has to escalate, a properly written warning rather than a suspension letter.
Common questions
Can I suspend an employee without pay?
Almost never. Acas guidance is that a suspended employee should continue to receive their pay and any contractual benefits such as a bonus or gym membership, and reducing or stopping pay during suspension risks breaching the employment contract even where the contract appears to allow it. That breach can hand the employee a constructive dismissal claim regardless of whether the original allegation was well founded. Unpaid suspension is occasionally seen in cases where an employee is unable to attend work for reasons outside the employer's control, but it is a legal minefield and worth taking advice on before, not after.
Do I have to let someone bring a companion to a disciplinary hearing?
Yes, where the hearing is a formal disciplinary hearing. Workers have a statutory right to be accompanied by a colleague or a trade union representative, and the invitation letter should say so. The companion can put the worker's case, sum up, and confer with them during the hearing, but cannot answer questions on their behalf. If the companion cannot make the date, the worker can propose an alternative time within five working days and you should generally accommodate it. Refusing the right is the sort of procedural failure that produces an uplift in any subsequent tribunal award.
What counts as gross misconduct?
Gross misconduct is conduct serious enough to destroy the employment relationship, justifying dismissal without notice. Typical examples are theft or fraud, physical violence, serious bullying or harassment, gross negligence, and serious breaches of health and safety rules. What matters as much as the category is that your own rules say so in advance: a staff handbook or disciplinary policy that lists what your business treats as gross misconduct is far more defensible than a decision made on the day. Even for genuine gross misconduct, dismissal still requires an investigation, a hearing and a right of appeal.
How long can an employee be suspended for?
There is no fixed legal limit, but Acas is clear that suspension should be kept as short as possible and reviewed regularly, and the longer it runs the harder it is to defend as a neutral act rather than a punishment. In practice a straightforward investigation in a small business should take days rather than weeks. Set an expected timescale when you suspend, tell the employee what it is, review it weekly and record each review, and tell them if it needs to be extended and why. Drift is the risk: an unexplained month of silence damages trust and confidence badly.
