Employment Law Update - Acas Code and SOSR dismissals

Published: 27/07/2016

In this decision, the Employment Appeal Tribunal (EAT) confirms that the Acas Code of Practice on Disciplinary and Grievance Procedures does not apply to dismissals for ‘some other substantial reason’ (SOSR), if the dismissal results from a breakdown in the working relationship.

Phoenix House Ltd v Stockman and another, EAT

Facts

The employee, Ms S, was appointed to a more junior role following a restructure in which her post of Financial Accountant was removed. Dissatisfied with the recruitment process, she raised a grievance against the Finance Director that was later rejected. She was also given a disciplinary warning after confronting him during a meeting. Her appeals against the grievance decision and the disciplinary warning were both dismissed.

Following an unsuccessful attempt at mediation, Ms S was invited to a formal meeting to consider whether the working relationship had irretrievably broken down. Her employment was subsequently terminated for ‘some other substantial reason’.

Her claim for unfair dismissal was upheld by an employment tribunal, in part because the process adopted by the employer did not follow the Acas Code.

EAT decision

The EAT upheld the tribunal’s decision of unfair dismissal, but rejected the conclusion that the Acas Code applied to SOSR dismissals. Ms S was not therefore entitled to any uplift of her compensation for the employer’s failure to follow the Acas Code.

The EAT agreed with the tribunal’s decision that a reasonable employer would not have concluded that the employment relationship was beyond repair. Ms S’s employer had started from the position that the relationship had broken down and had put the burden on her to prove otherwise. She had not been given adequate opportunity to put her case or to challenge the assertions made against her.

In the EAT’s view, while certain elements of the Code are capable of being and should be applied to SOSR dismissals, it cannot have been Parliament’s intention for a sanction to be imposed on employers for failing to comply with the Code in these circumstances, without expressly stating such an intention.

Consequences

This decision provides welcome clarity that the Acas Code does not apply to SOSR dismissals. However, it is also a reminder that achieving a fair SOSR dismissal in situations involving a breakdown in the working relationship requires careful handling by employers and can only be achieved after exploring all the alternative options.

The content of this article is for general information only. For further information regarding the Acas Code and SOSR dismissals, please contact a member of Birketts' employment team. Law covered as at July 2016.

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