Ever since the ACAS Code of Practice on Disciplinary and Grievance procedures took effect there has been some doubt as to its applicability. Redundancy and expiry of fixed term contracts were specifically excluded. As such, it has been regularly argued before Tribunals that if it had been the intention to exclude any other types of dismissal from its effect then they would also have been specified. However, two recent cases from the EAT have shown that this is not the case.
In the first, Holmes v QinetiQ Limited, the dismissal was on the grounds of ill health. The Respondent had failed to obtain an up to date occupational health report and for that reason had conceded the dismissal was unfair. The Claimant then argued that there had been an unreasonable failure to follow the ACAS Code and sought an uplift in compensation. The Tribunal took the view that the ACAS Code did not apply, and therefore the question of an uplift did not arise. On appeal the EAT agreed. The were of the view that the Code applied to cases where an employees acts or omissions involve culpable conduct or performance on the part of the employee and that ill health dismissals do not fall into that category.
The Employment Tribunal was correct to refuse to award any uplift in compensation pursuant to section 207A(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 (as amended). No disciplinary procedure was invoked in this case because, apart from the effects of his illness, the Claimant was able to perform the job of security guard and there was no suggestion that his conduct or performance gave rise to a disciplinary situation or involved culpable conduct. That meant the employer was not required to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures and the uplift under section 207A(2) was not available.
In the second case, Phoenix House Limited v Stockman, the dismissal was for SOSR (some other substantial reason) due to a breakdown in a working relationship. An employment tribunal found that the dismissal was unfair on the basis that no reasonable employer would have found that, in the particular circumstances, the breakdown in the relationship was irretrievable to the extent that dismissal was the only reasonable option. The Tribunal also found there were procedure failings and that the Code was applicable so there was potential for an uplift in compensation. Although the EAT upheld the finding that the dismissal was both substantively and procedurally unfair it disagreed that the Code applied and specifically that the uplift for non-compliance applied. They observed that the Code does not in terms apply to SOSR dismissals and indeed that some aspects of it, such as investigations, may not be fully effective where such dismissal are concerned. As such imposition of a sanction for not complying with the letter of the Code could not be what Parliament intended.
It is important to understand however that these cases do not give employers a free hand to ignore the Code of Practice in ill health and SOSR dismissals. The Code potentially could still apply in ill health dismissals were there was an element of culpability of the employee being taken into account - such as where they had failed to comply with the absence reporting procedures. Similarly, Phoenix House focussed more on the fact that parts of the ACAS Code may not be relevant or effective in SOSR dismissals and therefore a failure to comply with those parts should not be punished by the imposition of an uplift on compensation. Common sense fairness may still require aspects of the Code to be followed and where that is the case those parts should be complied with.