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Does the ACAS Code of Practice apply to dismissals for some other substantial reason?

The Acas Code of Practice on Disciplinary and Grievance Procedures is designed to assist employers dealing with disciplinary action or grievances raised in the workplace. An employee cannot bring proceedings on the basis that the employer has not followed the Code but an employment tribunal will consider this when deciding cases.

A link to the Acas Code can be found here http://www.acas.org.uk/media/pdf/f/m/Acas-Code-of-Practice-1-on-disciplinary-and-grievance-procedures.pdf. 

The significance of a failure to follow the Acas Code is that an employment tribunal can award up to 25% uplift on compensation awarded to a successful claimant, increasing the employer’s overall liability. However, recent decisions of the Employment Appeal Tribunal (EAT) have confirmed that the Acas Code does not apply to ill health dismissals (http://www.qualitysolicitors.com/knightpolson/news/2016/06/acas-code-of-practice-on-disciplinary-and-grievance-procedures-does-not-apply-to-ill-health-dismissals) and dismissal for some other substantial reason where there has been a breakdown in the working relationship between the parties. This latter exception has been confirmed in the recent case of Phoenix House Ltd v Stockman and another.

Some other substantial reason is one of the potentially fair reasons for an employees dismissal in s.98 of the Employment Rights Act 1996. The other reasons include:

  • Capability and qualifications;
  • Conduct;
  • Redundancy; or
  • Breach of a statutory obligation.

In Phoenix House Ltd v Stockman and another, the employer had placed a burden on the employee to prove that the relationship had not broken down. Its starting position was that the relationship was beyond repair and this was deemed unreasonable. The EAT upheld the tribunal’s decision that the dismissal was unfair both substantively and procedurally.

The EAT confirmed that an employer should consider whether the employee can, without significant disruption, be re-integrated into the workforce and it had failed to do so.

The EAT stated that the Acas Code should be applied to some, but not all, dismissals for some other substantial reason. Had Parliament intended that the uplift be applied in all claims, it would have expressly included this provision into the Acas Code. However, it did not do so. Tribunals should not award any uplift to unfair dismissal claims where the dismissal is by reason of some other substantial reason for a breakdown in the working relationship.

This case is contrary to the provisional view in Hussain v Jurys Inns Group Ltd EAT 0283/15 that it does apply to dismissals for some other substantial reason. It seems that these recent cases have removed the scope for application of the Code and uplifts of compensation.

This article is not a substitute for legal advice on specific facts and circumstances. It is designed as a free update on the law at the time of publicising. QualitySolicitors Knight Polson accepts no responsibility for reliance on this article and recommends that you seek legal advice on your situation.

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