Updated: Jul 28, 2022
A recent decision by the Employment Appeal Tribunal (EAT) highlights the importance of following a fair process, even where an employer is dismissing for a reason where the Acas Code does not apply (such as redundancy or ‘some other substantial reason’).
Employers considering dismissing an employee for a disciplinary reason, such as for poor performance or misconduct, are required to have regard to the Acas Code of Practice on Disciplinary and Grievance Procedures (the Acas Code). The Acas Code explicitly excludes dismissals on the grounds of redundancy or for the non-renewal of a fixed-term contract.
The Acas Code suggests a number of stages to a fair disciplinary procedure:
• Establish the facts of each case
• Inform the employee of the problem
• Allow the employee to be accompanied at the meeting
• Decide on appropriate action
• Provide employees with an opportunity to appeal
The Acas Code makes similar provision for grievance procedures. Where the employer has failed to follow the Acas Code and the employment tribunal considers that the failure was unreasonable, it may increase the amount of compensation payable to the employee by up to 25%, if it considers it just and equitable to do so.
In Rentplus UK Ltd v Mrs Susan Coulson the employment tribunal held that the employee’s dismissal was unfair.
Susan Coulson, aged 59, was employed as a senior executive by Rentplus from 2015 until her dismissal in August 2018. A new chief executive was appointed in 2017, at which stage, Ms Coulson stated she began to be ‘frozen out’, was ‘marginalised’ and did not develop the same close relationship that she did with his predecessor. The all-male board instructed her that costs needed to be cut and gave her the ultimatum to either take a £35,000 pay cut or move 250 miles to position in another office.
Ms Coulson was concerned that due to her age she would not be able to secure another position and so declined both options. She was therefore dismissed, with Rentplus claiming that she was being made redundant as there were no alternative posts at the same level for her. Ms Coulson argued that this could not have been the case as the company then went on to expand dramatically, doubling the number of staff.
The tribunal concluded that the redundancy consultation meetings were a sham as the decision to dismiss her had been taken long before. It found that the reason for her dismissal was not redundancy but a desire to remove her from her role. It also found that the new CEO was the real decision maker in the employee’s grievance and that the company had not provided enough evidence to dispute that the true reason for dismissal was her gender. The tribunal's conclusion that a 25% Acas uplift should be awarded referred to the claim for unfair dismissal succeeding and the failures being so unreasonable.
The EAT agreed with the tribunal's reasoning that the employee decided to dismiss their employee due to dissatisfaction with her personally and/or her performance, and she was therefore in a "disciplinary situation" to which a fair capability or disciplinary procedure and the Acas Code should have applied.
It is therefore crucial to identity, question and document the true reason for dismissing an employee to ensure you are not being discriminatory and that you have followed a fair procedure (as set out by Acas). As demonstrated in the case above, a tribunal may find that the reason relied on by the employer is a ‘sham’ and nonetheless apply the Acas uplift for unreasonably failing to comply with the Acas code when dismissing.