UK: Acas Code on disciplinary procedures may apply to more types of dismissal than employers expect

Employers would be well-advised to comply with the procedural steps set out in the Acas Code of Practice on Disciplinary and Grievance Procedures when dismissing, unless they can be confident that the tribunal will accept that the reason for dismissal is not within the ambit of the Code.  The Acas Code explicitly excludes dismissals on grounds of redundancy or the non-renewal of a fixed-term contract.  However, in Rentplus UK Ltd v Coulson the tribunal found that the employer's purported reason of redundancy was a sham (given the decision had been made to dismiss the claimant over a year earlier, as part of an agreement with the person taking over as CEO), that the dismissal amounted to sex discrimination and that the award should be increased by 25% for breach of the Acas Code.

The employer's argument on appeal, that this was not a "disciplinary situation" to which the Acas Code applied, was rejected.  The EAT considered that the tribunal must have concluded that the employer had taken against the claimant and decided to get rid of her because of dissatisfaction with her personally and/or how she was performing her role. It was inherently implausible that the tribunal concluded that the respondent wanted rid of the claimant because she was a woman, rather than believing that there were problems with her capability and/or conduct, that belief being tainted by sex discrimination. It was therefore implicit in the reasoning of the employment tribunal that the claimant was in a "disciplinary situation" to which a fair capability or disciplinary procedure should have applied.  The tribunal's comment that this was not a "disguised capability dismissal" should be read as simply making the point that there was no issue with the claimant's capability that could have resulted in a fair dismissal.

Further, the redundancy consultation meetings with the claimant had been a complete sham as the decision had been pre-determined, and nothing the employee could have said would have made a difference.  Going through the motions of compliance with the Acas Code, effectively in bad faith, equates to a total failure to comply with the Code and therefore the maximum 25% uplift to compensation awarded was appropriate.

There remains uncertainty as to whether "some other substantial reason" dismissals could fall within the ambit of the Code.  The EAT in this case made clear its (obiter) view that they could (for example, where the reason is a breakdown in working relationships caused by conduct or performance issues) and that it is substance rather than form that matters - an employer cannot sidestep the application of the Acas Code by dressing up a dismissal that results from such concerns as for some other reason. This conflicts with another EAT ruling in Phoenix House Ltd v Stockman (see here); a Court of Appeal judgment is desirable to clarify the issue.  In such cases it remains prudent to follow as much of the Code as is relevant, as this will assist in demonstrating a fair procedure in any event.