ACAS Code uplift applied to "loss of confidence" dismissal

Posted by Ruth Christy on
The ACAS Code of Practice on Disciplinary and Grievance Procedures applies to "disciplinary and grievance situations in the workplace".  As well as potentially affecting whether a dismissal is fair or unfair, an unreasonable failure to comply with the Code of Practice where it applies could lead to an uplift in any compensation awarded to the employee by up to 25%.

However, the Code expressly does not apply to redundancy dismissals or the non-renewal of fixed term contracts, but does it apply to dismissals for 'some other substantial reason' (SOSR)?

Opinion has been somewhat divided on this issue. In 2010 an Employment Tribunal (ET) held that the ACAS Code of Practice did apply to dismissals for SOSR when an employer dismissed and re-engaged employees who did not agree to a change in their terms and conditions.

The ET concluded that because the Code states that disciplinary situations "include" misconduct and/or poor performance, it could apply to other situations as well.  However this decision is not binding, and in another case (Jefferson (Commercial) LLP v Westgate UKEAT/0128/12) where there was an irretrievable breakdown in the employment relationship amounting to SOSR, the Employment Appeal Tribunal (EAT) did not consider that the Code was relevant.

In contrast, in the recent case of Lund v St Edmunds School, the EAT held that the ACAS Code of Practice should have been followed where the employee was dismissed for SOSR. 

In this case the reason for the employee's  dismissal related to his conduct and therefore it was considered that disciplinary procedures should have been invoked. Mr Lund was a teacher at the school and he complained about the computer system.

The school maintained that he did not understand the systems properly but they never sought to resolve this issue. Mr Lund dismantled the system and refused to let his lesson be observed resulting in his suspension on full pay.

Mr Lund's relationship with other staff had also become extremely difficult and at least one member of staff indicated that they would have to consider resigning if Mr Lund continued to work at the school. The school dismissed Mr Lund, citing an irreparable breakdown in relationship.

An Employment Tribunal accepted that the reason for dismissal was SOSR but found that the dismissal was unfair for the following reasons:

  • No-one had attempted to resolve Mr Lund's complaint about the computer system;
  • Mr Lund had not been given notice of what the meeting was about or that it could lead to his dismissal;
  • He therefore had no chance to prepare for the meeting; and
  • He was not provided with the right to appeal.

Despite a finding of unfair dismissal the ET however ruled that the ACAS Code of Practice was "silent" on the issue of whether it applied to a dismissal for SOSR and therefore did not award an uplift for the school's failure to comply with the Code.

On appeal, the EAT held, that this was wrong and that the ACAS Code did apply in this case because although Mr Lund ultimately may not have been dismissed for a disciplinary reason, the problem did relate to Mr Lund's conduct which resulted in difficulties with other staff. Therefore the disciplinary procedure should have been invoked because it was Mr Lund's conduct which raised the possibility of him being dismissed.

Whether the ACAS Code applies to 'some other substantial reason' dismissals is still somewhat unclear particularly as not all SOSR dismissals will be to do with an employee's conduct/performance.  Even if the dismissal is related to the employee's conduct/performance, the EAT in the Jefferson (Commercial) LLP v Westgate case referred to above, which involved a breakdown in trust and confidence, found that the ACAS Code was not relevant.

As a matter of best practice, we would advise that employers should still follow the steps in the ACAS Code particularly as a dismissal for SOSR can still relate to an employee's conduct, even if it is a clash of personalities or a breakdown in employee relationships which ultimately leads to dismissal.

Case: Lund v St Edmunds School [2013] UKEAT/0514/12

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