UK: Unfair dismissal - employers should follow Acas Code on discipline where conduct or performance issues lead to a "SOSR" dismissal

Recent case law has highlighted risks for employers dismissing an employee for a breakdown in trust and confidence, for example where the employer is partly to blame for the breakdown or where in reality the issue is one of conduct or performance giving rise to the breakdown. A recent EAT ruling, Lund v St Edmund's School, heightens the risk. The Acas Code of Practice on disciplinary matters expressly applies to conduct and performance but is silent as to dismissals for "some other substantial reason". The EAT has now ruled that the Code does apply to dismissals where disciplinary proceedings have been, or ought to have been invoked, even if the dismissal is ultimately made "for some other substantial reason" and not conduct. In this situation, the employer risks a potential uplift to the unfair dismissal award of up to 25%, for breach of the Code.

The fact that the employer had contemplated dismissing for misconduct seems to have been a decisive factor. There may still be scope to argue that the Code does not apply to a dismissal for a breakdown in trust and confidence where the employer has chosen to focus solely on the breakdown and not its cause, but it may be unclear which side of the line a case falls. It is therefore advisable to follow the Code wherever there is an element of conduct or performance in the chain of events leading to dismissal. The Code should not apply to "SOSR" dismissals unconnected with conduct or performance, such as re-organisations.