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The Acas Code of Practice recent rulings

The Code

The Acas Code of Practice on Disciplinary and Grievance Procedures (“the Code”) sets out principles for handling disciplinary and grievance situations in the workplace. It is intended to help both employers and employees deal effectively with issues of alleged misconduct or poor performance at work.

Although failure to act in accordance with the Code does not in itself result in a penalty, the failure to follow the Code can be taken into account by an Employment Tribunal when considering a claim such as whether an employee has been unfairly dismissed.

If there has been an unreasonable failure to follow the Code, the level of compensation awarded to a claimant can be affected in one of two ways:

  • If an employer fails to unreasonably follow the Code, compensation can be increased by up to 25%
  • If an employee fails to unreasonably follow the Code, compensation can be reduced by up to 25%

As the Code applies to disciplinary situations there has been uncertainty as to whether it applies to situations which do not concern misconduct or poor performance.

Recent cases

Some other substantial reason (“SOSR”)

In Phoenix House v Stockman, an employee was dismissed following an alleged breakdown in the working relationship. The Employment Tribunal held that the dismissal was unfair and that the procedure for carrying out the dismissal was not compliant with the Code.

On appeal, the finding of unfair dismissal was upheld but the EAT held that the uplift for failure to follow the Code should not be applied. While the EAT held that certain elements of the Code are capable of being and should be applied, for example, giving the employee the opportunity to demonstrate that they are fit to be back into the workplace without disruption, it considered that Parliament could not have intended to impose a sanction for failure to comply with the letter of the Code in this type of situation, without stating so expressly.

Ill health dismissals

In the case of Holmes v QuinetiQ Ltd, an employee was dismissed on grounds of ill health after a number of extended absences. The dismissal was found to be unfair as the employer had failed to obtain an up to date Occupational Health report regarding the employee’s ability to reliably attend work. The employee argued that his compensation should be uplifted as the employer had failed to follow the Code but the Employment Tribunal rejected this argument as there was no disciplinary component. The claimant appealed.

The EAT dismissed the appeal concluding that the Code only applies to dismissals where there is ‘culpable conduct’ which required correction or punishment. Therefore, when there is poor performance as a result of genuine illness, the Code is unlikely to apply. On the other hand, when there is an allegation that ill health is not genuine or sickness absence procedures are not being followed then the Code should be followed during disciplinary proceedings to address the employee’s conduct.

Comment

The decisions are helpful in providing clarification that employers are not necessarily bound by the Code when dismissing for ill health or SOSR where there are no issues of ‘culpable conduct’ (i.e. poor performance or misconduct). However, employers should always exercise caution when considering dismissing any employee and should seek advice if unsure as to whether the Code applies.

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