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Failure to comply with Acas Code of Practice on disciplinary and grievance procedures: uplift in employee compensation

A recent case was a useful reminder to employers of the importance of complying with the Acas Code of Practice on Disciplinary and Grievance Procedures (Acas Code), when dealing with a grievance or prior to dismissing an employee for poor performance or misconduct.   Even in cases which are not obviously linked to a disciplinary or grievance – as in this case which was found to be a sham redundancy dismissal.  Failure to comply with the Acas Code allows an Employment Tribunal to increase the amount of compensation to an employee by up to 25%, if it considers it just and equitable to do so.  The Acas Code does not apply to redundancy dismissals.

In Rentplus UK Ltd v Coulson, Ms Coulson was a member of the leadership team and worked with the CEO as Director of Partnerships.  In March 2017, a decision was taken to dismiss her, although this was unknown to her until much later. Later in 2017, the existing CEO decided to step down and was succeeded by Mr Collins, on the basis that Ms Coulson would be removed from her role. 

Rentplus began a reorganisation in 2018.  The process was described as a redundancy exercise, even though the total number of posts would increase. Following her consultation meetings, Ms Coulson submitted a grievance on the grounds that her role was not redundant, and that she had been marginalised over a number of months.  The grievance was dismissed, as was her appeal.  Ms Coulson was dismissed in August 2018 and brought claims for unfair dismissal and direct sex discrimination.

The employment tribunal found in favour of Ms Coulson's on both claims.  The consultation meetings were a sham because the decision to dismiss her had been taken long before the redundancy exercise took place.  The reason for the dismissal was not redundancy, but a desire to remove her from her role. It also found that Mr Collins the new CEO was the real decision maker in her grievance.

As a result of this, the tribunal decided that the full 25% Acas uplift should be awarded.

Rentplus appealed to the EAT on the grounds that the uplift did not apply because the reason for dismissal was redundancy, and the reason accepted by the tribunal was sex discrimination.  Further Rentplus argued that the tribunal should have identified the employer’s specific failings with reference to the relevant parts of the Acas Code. 

The EAT rejected the appeal and held that there was no error of law in awarding a 25% uplift.  The dismissal process was a sham, and the grievance was very poorly handed so it was just and equitable to provide the uplift at the maximum level.  The EAT provided guidance reminding Tribunals of the questions it should ask when considering the Acas uplift.

  1. Is the claim one which raises a matter to which the Acas Code (the Code) applies?
  2. Has there been a failure to comply with the Code in relation to that matter?
  3. Was the failure to comply with the code unreasonable? and
  4. Is it just and equitable to award an uplift because of the failure and if so, by what percentage, up to 25%?

The decision is a reminder that the Acas Code can apply even in cases which are not obviously related to a disciplinary or a grievance. In particular, sham redundancy dismissals and discriminatory dismissals can amount to a "disciplinary situation" for the purposes of the Acas Code.  Alternatively, the EAT found that even if there had not been a disciplinary, the employee had raised a grievance. The handling of the grievance was as much of a sham as the dismissal process, there has been a total failure to comply with the Acas Code, and so a 25% uplift was appropriate.

For advice on handling grievances, disciplinaries or performance issues, please contact Laura Claridge on 01689 887873 or email laura.claridge@cwj.co.uk.

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