How to Handle a Grievance in a Small Business, Step by Step

When an employee raises a grievance, it can feel quite daunting. Especially if you run a small business and don't have an HR team.

The good news is that the process itself isn't complicated. In the UK, the Acas Code of Practice on disciplinary and grievance procedures sets out what a fair process looks like. Follow it, stay calm and keep good notes, and you'll be in a much better position.

Here's how I'd approach it, step by step.

This is general guidance, not legal advice. If a grievance is complex or linked to a potential claim, it's worth speaking to an employment lawyer.

What counts as a grievance?

A grievance is a concern, problem or complaint that an employee raises with their employer.

It might be about their manager, a colleague, their pay, their workload, a change at work or how they've been treated.

Not every complaint needs a formal process. Lots of issues can be sorted out with a quiet, sensible conversation. But if someone puts a complaint in writing and asks for it to be dealt with formally, you need to treat it as a formal grievance.

Step 1: Acknowledge it quickly

Let the employee know you've received their grievance and what will happen next.

This sounds obvious, but it matters. People who raise grievances are often anxious or frustrated. Silence makes it worse.

A short, calm reply is enough. Thank them for raising it, confirm you'll be looking into it and let them know you'll be in touch to arrange a meeting.

Step 2: Decide who will deal with it

Ideally, the person handling the grievance shouldn't be involved in the issue.

In a small business, that can be tricky. If the grievance is about the owner or the only manager, there may be nobody independent in-house. This is where bringing in an external HR consultant can really help.

Step 3: Understand what the grievance is actually about

Before you meet, read it carefully and work out:

• What exactly is the employee unhappy about?

• What outcome are they looking for?

• Is anything urgent, like a safeguarding concern or an allegation of harassment?

Sometimes this is easy. Sometimes it really isn't.

What if the grievance has been written by AI?

This is something I'm hearing about more and more.

Employees are using tools like ChatGPT to write their grievances. The result is often very long, very formal and full of legal-sounding language. It might quote legislation or list a string of allegations.

It's easy to feel defensive when you read one. But try not to react to the tone.

Underneath, there's usually a real issue that someone cares about. Your job is to find it.

The draft revised Acas Code, which was out for consultation until September 2026, encourages shorter, clearer grievances and early conversations to agree what the grievance is actually about. That's a sensible approach whatever the grievance looks like.

A short meeting to agree the main points and what the person wants to happen can save a lot of time. I've written more about this in The AI-Generated Grievance: Are You Ready for What's Coming?

Step 4: Hold a grievance meeting

Arrange a meeting without unreasonable delay. Let the employee know the date, time and place in advance.

Employees have a legal right to be accompanied at a grievance meeting by a work colleague or a trade union representative, if they make a reasonable request. Let them know this when you invite them.

At the meeting:

• Let them explain the grievance in their own words.

• Ask open questions to understand what's happened.

• Clarify what outcome they're hoping for.

• Take clear notes.

• Don't make a decision on the spot.

Keep it calm and respectful. You're there to listen and understand, not to argue.

Step 5: Investigate

Depending on the grievance, you may need to speak to other people, look at emails or documents, or check records.

Keep the investigation proportionate. A complaint about a rota doesn't need the same level of investigation as an allegation of harassment.

Write down who you spoke to, what they said and what you looked at.

Step 6: Make a decision and put it in writing

Once you've considered everything, decide what, if anything, needs to happen.

Write to the employee with your decision. Explain your reasoning clearly and in plain English. If you're upholding part of the grievance, say what you'll do about it.

You should also tell them they have the right to appeal.

Step 7: Deal with any appeal

If the employee appeals, the appeal should be heard by someone who wasn't involved in the original decision, and ideally more senior.

Again, this can be difficult in a small business. An external person can help here too.

Hold an appeal meeting, consider the points raised and confirm the final outcome in writing.

Why does following the Acas Code matter?

If a case goes to an employment tribunal, the tribunal will take the Acas Code into account.

If an employer has unreasonably failed to follow it, compensation can be increased by up to 25%. If the employee has unreasonably failed to follow it, compensation can be reduced.

With the Employment Rights Act 2025 extending tribunal time limits to six months from October 2026, and removing the cap on unfair dismissal compensation from January 2027, getting the process right matters even more.

Common mistakes to avoid

A few things I'd steer clear of:

• Ignoring it and hoping it goes away. It won't.

• Taking too long. Delays make people feel they aren't being taken seriously.

• Responding in the same tone. If a grievance is long and legalistic, firing back something equally formal rarely helps.

• Not keeping notes. If you can't show what you did, it's hard to prove it was fair.

• Treating it as a personal attack. It's not always easy, but try to stay objective.

Where I've landed

Grievances are rarely pleasant. But handled well, they can clear the air and sort out issues before they get worse.

The best grievance processes I've seen are calm, clear and human. They follow the Acas Code, but they don't lose sight of the person at the centre of it.

If you've got a grievance to deal with and you'd like some support, have a look at my HR support. I can advise you through the process or act as an independent person to hear the grievance or appeal.

Have you noticed grievances getting longer since AI tools became so easy to use?

Frequently asked questions

How long should a grievance take to resolve?

There's no fixed legal timescale, but the Acas Code says meetings should happen without unreasonable delay. Aim to keep things moving and keep the employee updated.

Does an employee have the right to be accompanied at a grievance meeting?

Yes. Employees have a legal right to be accompanied by a work colleague or trade union representative if they make a reasonable request.

What happens if we don't follow the Acas Code?

If a claim goes to a tribunal and the employer unreasonably failed to follow the Code, compensation can be increased by up to 25%.

How should we respond to a grievance written by AI?

Focus on the underlying issue rather than the tone. A short meeting to agree the key points and the outcome the employee wants is often the most useful first step.