The Acas Code on Discipline and Grievance provides guidance for employers on procedures to follow when dealing with employee grievances or discipline. Failure to follow the Code can result in a successful Claimant receiving an uplift of up to 25% on the compensation they receive at Employment Tribunal. The Acas Code applies where employees are disciplined for misconduct or poor performance and does not apply to redundancy procedure. However, there remained uncertainty as to the other types of case in which the Acas Code should be followed. Two recent cases shed some light on this.
In Holmes v QinetiQ Ltd, the Employment Appeal Tribunal (EAT) held that the Code does not apply in cases of dismissal on the grounds of ill-health. In that case Mr Holmes was dismissed following a number of extended absences due to problems with his back and legs. He was dismissed on the grounds that he was no longer capable of carrying out his job. While the dismissal was held to be unfair because his employer had failed to obtain up to date occupational health reports, it was held that his compensation could not be uplifted for failure to follow the Acas Code, as it did not apply.
The EAT noted that the Acas Code specifically states that it applies to disciplinary procedures for misconduct or poor performance. It therefore noted that an element of ‘culpable conduct’ was required before the Code would apply. Therefore, it applies in case of capability where the employee is in some way culpable or blameworthy, but not in cases of capability on the grounds of genuine ill-health. This should be distinguished from cases where the ill health is not genuine, or the action taken arises from related misconduct, such as failing to follow an absence procedure.
In cases of ill health, employers will therefore still have to follow a fair procedure, but the Acas Code does not require specifically to be followed and it is not open to the Tribunal to award uplifts in compensation for failure to do so.
The Acas Code had also been unclear is cases of dismissal for “some other substantial reason” (SOSR). Part of the difficulty in such cases is that SOSR is a ‘catch-all’ and the circumstances leading to dismissal can vary greatly. However, some clarity has been provided in the case of Phoenix House Ltd v Stockman and another. In this case, following some difficulty between Ms Stockman and other employees, she had brought an unsuccessful grievance against a fellow employee and had, on a separate issue, been issued with a written warning for misconduct. The basis for dismissal was the employer’s view that the employment relationship had broken down to such an extent that it was irretrievable. The employment tribunal, and subsequently the EAT, found that the dismissal was unfair. However, the EAT rejected the tribunal’s conclusion that the Acas Code of Practice applied and its decision to award an uplift. The EAT disagreed with a previous provisional view – recently expressed by a different EAT judge - that the Acas Code should apply to all SOSR dismissals.
The EAT found that the Code does not contain clear words setting out explicitly that it applies to SOSR dismissals. Due to the varying circumstances in which SOSR might be found to be the reason for dismissal, there may be instances where the Code applies in part, such as where there is an element of misconduct. For example, in a previous case it was held that the Acas Code applied because disciplinary proceedings had been initiated for misconduct, even though the employee was eventually dismissed due to a breakdown in working relationships. In any event, in all circumstances where an employee is dismissed a key consideration should be fairness.
It should be remembered that in both cases discussed above, while the Acas Code was held not to apply so as to allow an uplift in compensation, the dismissals were still found to be unfair. Therefore, while the Acas Code does not apply to ill health or to all types of SOSR dismissals, no less consideration should be given to ensuring a fair process is followed in such cases. The statutory test for unfair dismissal has reasonableness at its heart and that is a principle that must be remembered, no matter the procedure being followed.
Holmes v QinetiQ Ltd: http://www.bailii.org/uk/cases/UKEAT/2016/0206_15_2604.html
Phoenix House Ltd v Stockman