Does the ACAS code apply to all dismissals?

The ACAS Code on disciplinary and grievance procedures expressly provides:

The Code does not apply to redundancy dismissals or the non renewal of fixed term contracts on their expiry.

Why is it important to follow the ACAS Code?

Not only does it ensure that organisations are following best practice but more importantly Employment Tribunals will be able to adjust an award made by up to 25% because of a parties failure to comply with the Code.

1. Does the Code apply to ill-health dismissals?

This was considered in the case of Holmes v Quinetiq Limited (UKEAT/0206/15/BA).

The claimant, Mr Holmes worked as a security guard for his employer until 2014 when he was dismissed on the grounds of his ill-health. He brought claims in the Employment Tribunal including that of unfair dismissal. Prior to the hearing, the employer conceded that the dismissal was unfair because it failed to obtain an up-to-date Occupational Health report about his ability to attend work.

The claimant argued that at the remedies hearing, he should be entitled to uplift to his compensatory award because his employer failed to follow the ACAS Code.

The Employment Tribunal refused the uplift because it held that the Code does not extend to dismissals on the grounds of ill-health.

The claimant appealed to the Employment Appeal Tribunal (EAT). The EAT dismissed the claimant’s appeal.

The EAT held “properly constructed the Code of Practice does not apply to internal procedures operated by an employer concerning an employee’s alleged incapacity to do the job arising from ill health or sickness absence and nothing more. It is limited to internal procedures relating to disciplinary situations that include misconduct or poor performance but may extend beyond that, and are likely to be concerned with the correction or punishment of culpable behaviour of some form or another”

In summary therefore the ACAS code only applies where the dismissal relates to an employees culpable conduct, which includes performance issues.

Comment

This decision is clearly helpful for employers as it clarifies that the ACAS code does not apply to where the dismissal is on the grounds of genuine ill, although it is good practice.

2. Does the ACAS code apply to dismissals where the reason is some other substantial reason?

It is clear from the above that the ACAS Code applies to culpable conduct. However, does it apply to dismissals for a breakdown in the working relationship?

This was considered in the case of Phoenix House Limited v Stockman.

The claimant, Ms Stockman, was dismissed by her employer, Phoenix House Limited. Ms Stockman raised a grievance against a colleague which was not upheld and was issued with a written warning for misconduct. Her employer’s view was that the employment relationship had broken down to such an extent that it was untenable and irretrievable.

Ms Stockman was subsequently dismissed on the grounds of some other substantial reason. She brought a claim in the Employment Tribunal for unfair dismissal. Her unfair dismissal claim was successful as the Employment Tribunal held that no reasonable employer could have held that the relationship was not beyond repair. The Employment Tribunal also highlighted procedural defects, and held that the employer had failed to follow the ACAS Code of Practice, and accordingly, the compensation award should be increased by 25%.

The employer appealed to the EAT, which held that the dismissal was procedurally and substantively unfair. However, it did not agree with the Tribunal’s view that the ACAS Code of Practice should apply.

The EAT held that the ACAS Code should not apply to SOSR dismissals. This decision contradicts the view given in the case of Lund v St Edmonds School Canterbury in which the EAT held that the ACAS Code applied even though the employee was dismissed for some other substantial reason.

Comment

In light of the two decisions, employers should take a cautious approach and, where appropriate, if an employer is contemplating a dismissal on the grounds of some other substantial reason, as a matter of good practice should ensure that the ACAS Code is followed.

If you have any questions, please contact:

Sejal Raja
Partner
T.
020 7227 7410
E. sejal.raja@rlb-law.com

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