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29th June 2016

When Does the ACAS Code Apply?

The Employment Appeal Tribunal (EAT) has confirmed that the ACAS Code of Practice on Disciplinary and Grievance Procedures only applies to dismissals where there is ‘culpable conduct’. This conduct could be in the form of misconduct or poor performance.

 The impact of the decision is that where poor performance is due to illness, the Code is unlikely to apply.

 The Code states that it applies to dismissals for conduct and performance, but not to dismissals made due to redundancy or where a fixed term contract expires without renewal. It is important for employers and employees to follow the Code where it applies because in S207A (2) of the Trade Union and Labour Relations (Consolidation) Act 1992, where the tribunal finds that an employee has unfairly dismissed an employee and the Code applies, it must consider whether to make an uplift to any award where the Code has not been followed.

 In the case in question, the employer had worked as a security guard for the employer for around 18 years. He had been absent for a number of extended periods of time due to issues with his health. He was dismissed on the grounds of ill health as he was no longer capable of working for the employer. The employer admitted that the dismissal was unfair because it had not obtained an up to date occupational health report on the employee’s ability to work after an operation. The employee argued that there should be an uplift in his award as the employer had not followed the Code.

 The Employment Tribunal refused the uplift. The employee therefore appealed to the EAT.

 The EAT held that the Code only applies to circumstances where there is ‘culpable conduct’ which requires correction or punishment. It is only intended to apply to situations where an employee faces a complaint or allegation that may lead to disciplinary action. The Code does not apply where there is an ill health absence as there is no culpability and there is usually no disciplinary action.

 The decision of the EAT assists employers who dismiss for ill health reasons where poor performance is not the issue. In these circumstances, the Code does not need to be followed.

 However, employers should bear in mind that there are still a number of steps which must be followed in advance of terminating an employment relationship on the grounds of ill-health, in order to avoid an unfair dismissal claim. It is crucial to have regular dialogue with employees and their medical advisors in order to ascertain the current position and prognosis for the future, along with considering whether any adjustments to the working relationship or workplace could be made to remove any barriers to a return to work.


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