Establishing a Grievance Procedure in Your Business

A positive workplace culture doesn’t happen by accident - it requires real systems for handling the inevitable bumps along the way. Even in the most harmonious teams, misunderstandings, disagreements, and more serious issues can arise between staff, managers, or even clients. Without a clear process to address these concerns, small problems can spiral into bigger headaches, impacting staff morale, productivity, and even your business’s reputation.

That’s why every business, no matter its size, should have a robust grievance procedure in place. Having a clear, accessible policy for dealing with grievances preserves fairness, supports your duty of care as an employer, and meets legal requirements under Australian workplace law.

In this guide, we’ll demystify what a grievance procedure is, show you practical steps to set one up, share examples you can adapt, and walk you through common compliance pitfalls. Whether you’re just starting out or updating your policies as your team grows, keep reading for everything you need to know to implement a grievance and complaints policy the right way.

What Is a Grievance Procedure?

At its core, a grievance procedure is a systematic process for employees to raise, and for employers to resolve, workplace issues that affect them. You might hear this referred to as a grievance process, employee grievance policy, or simply a staff complaints procedure. Its purpose is two-fold: to give staff confidence their concerns will be taken seriously, and to protect the business by ensuring fair, consistent and legally sound handling of complaints.

So, what is grievance procedure in practice? Think of it as your business’s roadmap for dealing with a range of issues, from minor miscommunications to more serious allegations like bullying, discrimination, or breaches of company policy.

In Australia, putting a clear grievance procedure in place isn’t just good practice; it can also help ensure you meet obligations under the Fair Work Act 2009, anti-discrimination laws, and your broader workplace health and safety duties.

Why Do Australian Businesses Need Grievance Procedures?

You might wonder if small businesses really need formal procedures for handling complaints. The short answer is - absolutely. Here’s why:

• Legal Compliance: Employers are required by law to provide safe workplaces, free from harassment and discrimination. A proper process for complaints helps you meet these obligations.
• Risk Management: Unresolved complaints can escalate into disputes, legal claims, or even Fair Work Commission hearings. A documented process protects you by showing the business took reasonable steps to resolve issues.
• Fairness and Transparency: Having a clear employee grievance policy fosters trust, as staff know their concerns are acknowledged and handled consistently.
• Workplace Culture: An effective grievance procedure deters inappropriate behaviour, supports early intervention, and reassures employees their voices matter.

For reference, see our guide on workplace health and safety obligations.

What Are Grievance Procedures? A Quick Overview

Grievance procedures set out the exact steps staff (and sometimes clients, contractors, or third parties) can take to make a complaint, and clarify your business’s obligations in responding. These procedures should be easy to find (e.g., in your staff handbook or company intranet) and, crucially, followed in practice - not just filed away.

A typical grievance procedure answers:

• How should grievances be raised?
• Who is responsible for managing complaints?
• What steps will the business take to investigate and address the complaint?
• What timelines and confidentiality standards apply?
• What are the possible outcomes?

By mapping out each stage, a grievance procedure ensures consistency for every employee - protecting both your team and your business.

What Is the Grievance Process? The Key Steps Explained

So what is the grievance process in practical terms? While exact procedures might vary based on your business size and industry, almost all grievance procedures in Australia follow a similar framework:

1. Raising the Grievance: The employee (or other affected party) is encouraged to bring up the issue. This might be first as an informal chat with their manager, or in writing if they prefer.
2. Acknowledgement: The business acknowledges receipt of the complaint, explains the process, and confirms next steps and likely timelines.
3. Investigation and Assessment: The issue is looked into - this can be informal (e.g., a meeting to clear up a misunderstanding) or more formal (such as gathering statements or evidence for allegations of misconduct).
4. Resolution or Outcome: You communicate the findings and the action to be taken (if any). This could include mediation, disciplinary steps, changes to procedures, or simply clarification and moving forward.
5. Appeal or Review: Employees have a right to appeal if they’re not satisfied with the process or outcome. Your policy should explain how appeals are handled, ideally by someone who wasn’t involved in the original investigation.

For specific details about structuring policies, check out our resource on workplace policies and staff handbooks.

What Issues Can a Grievance Procedure Cover?

A well-designed grievance procedure should cover a wide range of workplace issues, both minor and serious. Some typical grievance examples include:

• Bullying, harassment, or discrimination
• Unfair workload or favouritism
• Disputes between employees or with managers
• Concerns regarding pay, conditions, or duties
• Unsafe work practices
• Breach of workplace policy or code of conduct
• Any conduct that doesn’t align with your organisation’s values or standards

It’s best practice to set out what the procedure covers, and clarify what matters are considered “grievances” versus issues better handled via your performance management or disciplinary processes.

What Should Be Included in an Employee Grievance Policy?

Australian businesses should include these core elements in their grievance and complaints policy:

• Purpose and Scope: Outline why the policy exists and to whom it applies (e.g., all employees, contractors, volunteers).
• Definitions: Make it clear what counts as a grievance and provide examples.
• Steps for Lodging a Grievance: Explain how to raise an issue, including the option for informal and formal resolution.
• Investigation Process: Detail how investigations will be handled, including timelines, confidentiality, and who is responsible.
• Possible Outcomes: Outline what might happen once the grievance is resolved (such as mediation, apology, disciplinary action, or no further action).
• Appeals Process: Describe how to appeal or seek review of the outcome if the person is not satisfied.
• Protections and Confidentiality: State that victimisation or retaliation for raising a grievance will not be tolerated, and explain how confidentiality will be managed.
• Where to Find Support: Direct staff to HR, EAP (Employee Assistance Program), or external resources if they need help.

For a more detailed guide to building healthy, complaint-resilient workplaces, see our article on mastering your grievance policy.

Grievance Procedure Template for Australian Businesses

If you’re starting from scratch, or want to benchmark your policy, here’s a simple grievance procedure template suitable for many Australian businesses (but do seek legal advice to tailor it for your needs):

Example of Grievance Procedure:

1. Informal Resolution: Employees are encouraged to raise concerns directly with their manager or supervisor if they feel comfortable. The aim is to resolve the issue quickly and informally wherever possible.
2. Formal Complaint: If the issue is not resolved, or the employee prefers, they may submit a formal complaint in writing to HR or another designated person.
3. Acknowledgement: The business will acknowledge receipt of the complaint within 3 business days, explain the next steps, and confirm who will handle the process.
4. Investigation: An impartial person will investigate the complaint promptly and confidentially, which may involve interviews and gathering evidence.
5. Outcome and Feedback: The outcome will be communicated to all relevant parties, along with any decisions or actions to be taken.
6. Appeal: If the employee is unsatisfied with the outcome, they may appeal to a more senior manager or an external body, as detailed in the policy.

Always include a statement about non-retaliation, confidentiality, and where employees can go for advice.

If you need a ready-made grievance policy template Australia, Sprintlaw can help you customise this template for compliance with Australian laws and your sector’s needs.

How To Implement a Grievance Procedure In Your Business

Putting the right policy document in place is only half the job. To make your grievance procedure effective:

• Communicate the policy clearly - at induction, via email, and in your staff handbook
• Train managers and supervisors on how to fairly handle complaints and avoid bias
• Encourage early reporting and reassure staff that no complaint is “too small” to raise
• Regularly review and update your procedure so it keeps pace with current law and business changes
• Maintain detailed records of grievances and actions taken in case of future disputes or Fair Work Commission claims

If you need help rolling out workplace policies, see our resource on employment contract essentials and policy integration.

Do Grievance Procedures Apply to Contractors and Volunteers?

While grievance procedures are usually designed with employees in mind, it's smart to clarify in your policy whether contractors, freelancers, or volunteers can also use the procedure. This ensures everyone in your business ecosystem knows how to speak up about concerns, and you have a clear method to deal with complaints wherever they come from.

For more on distinguishing contractors from employees (which affects which policies you need), read our guide on employee vs contractor classification.

Legal Compliance and Best Practices for Grievance Procedures

When creating or updating your policy, ensure it aligns with:

• Fair Work Act 2009 (Cth): Requires you to uphold minimum workplace rights and may apply in cases of adverse action or unfair dismissal claims following a grievance.
• Workplace Health and Safety (WHS) Laws: A well-handled grievance process reduces your business’s risk under WHS obligations.
• Anti-Discrimination Laws: State and federal laws prohibit discrimination, harassment, and victimisation, and require prompt, fair investigation of related complaints.

Having a robust grievance procedure not only responds to issues as they arise, but also demonstrates your due diligence if your business ever faces external scrutiny.

For a wider look at employment law compliance for small businesses, see our introduction to employment obligations in Australia.

Key Legal Documents and Policies to Support Your Procedure

• Employee Grievance Policy: The primary document explaining your grievance process, reporting options, and investigation steps.
• Workplace Policy / Staff Handbook: A broader document collecting your company’s key HR policies, often including the grievance policy, code of conduct, equal opportunity, and anti-bullying provisions.
• Whistleblower Policy: For larger businesses, or if you’re in a regulated industry, you may need a dedicated policy protecting staff who disclose wrongdoing. Read more about whistleblower policies here.
• Disciplinary Procedure: Outlines the process for dealing with confirmed misconduct after a grievance is resolved.
• Employment Agreements: These should refer to your staff policies and may require staff to comply with them as a condition of employment.

If you’re building a policy suite for new staff or updating for compliance, consider Sprintlaw’s Staff Handbook Package which streamlines these core documents.

Common Pitfalls in Grievance Handling (And How To Avoid Them)

• Not Following Procedure: Even with a clear policy, failure to follow the steps correctly in practice exposes you to claims of unfairness.
• Poor Documentation: If you can't show clear records of how a complaint was raised, investigated, and resolved, your business risks liability.
• Untrained Managers: Managers unfamiliar with fair process or bias risks may mishandle complaints, leading to escalation or legal trouble.
• No Option for Independent Review: Employees should know they can appeal to someone who wasn’t involved in the original process, or to an external agency if needed.
• Lack of Confidentiality: Mishandling confidential information deters employees from coming forward and damages trust in the policy.

Many of these risks can be managed by regular review and manager training, all of which can be built into your annual HR compliance check.

Key Takeaways

• A well-designed grievance procedure is essential for legal compliance, risk management, and fostering a fair workplace culture in Australia.
• Your policy should set out clear steps for raising, investigating, and resolving complaints - covering everything from informal chats to formal investigations and appeals.
• Grievance procedures protect both employees and employers - deterring misconduct, resolving issues early, and providing evidence you acted reasonably if disputes arise.
• Templates are a great starting point but should be customised to suit your unique business and ensure alignment with Australian law.
• Manager training, regular policy reviews, and open communication help ensure the grievance process works in practice, not just on paper.
• Always keep clear records of grievances and actions taken, and update your supporting HR policies as your team grows or laws change.

If you’d like tailored advice or help drafting a grievance policy for your business, you can reach the Sprintlaw team at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.