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An employer should follow the Acas Code of Practice on disciplinary and grievance procedures when dealing with grievances or dismissing an employee for disciplinary reasons such as misconduct or poor performance. The Code does not apply to redundancy dismissals. If the employer unreasonably fails to follow the Acas Code, the employment tribunal can increase compensation by up to 25 per cent if it is ‘just and equitable’ to do so. In Rentplus v Coulson, the EAT looked at whether an uplift of 25 per cent could apply to a discriminatory dismissal that the employer had said was a redundancy dismissal.

The employee was a director and a member of the senior leadership team, working closely with the CEO. In March 2017, and without the employee’s knowledge, the employer decided to dismiss her. From October 2017, she was frozen out of her role. In 2018, a reorganisation took place which was described as a redundancy exercise despite the fact that the number of roles would increase rather than decrease. A consultation exercise took place. After this, the employee raised a grievance about the fact that her role was redundant and complained of poor treatment by the CEO. Her grievance and the appeal were dismissed. She was dismissed and brought claims for unfair dismissal and discrimination. The tribunal said her dismissal was unfair and discriminatory. The redundancy process was a total sham because the decision to dismiss had been taken months before. The tribunal awarded a 25 per cent uplift in compensation due to ‘egregious’ breaches of the Acas Code. The employer appealed, saying the Acas Code could not apply to a redundancy dismissal (the employer’s argument) or a discriminatory dismissal (the tribunal’s finding). 

The EAT said that the Acas Code applies to ‘disciplinary situations’, not just express capability and conduct processes. It could apply to a wider set of circumstances, including situations where a potential misconduct or poor performance issue is dressed up as a sham redundancy. A decision that a dismissal is discriminatory won’t stop the Code applying – perceived performance issues which stem from discriminatory assumptions will be a ‘disciplinary situation’. The EAT said the tribunal’s judgment showed that the employer dismissed the employee because they were unhappy with her either personally or with her performance – a belief which was tainted by discrimination. This created the necessary disciplinary situation and the Acas Code applied. The 25 per cent uplift was reasonable because the dismissal process was a total sham and made in bad faith.

This case shows that ‘disciplinary’ situations may well arise in the absence of express capability and conduct processes. If an employee is disliked for some reason, due to her behaviour or the way she goes about her job, that is a disciplinary situation for the purposes of the Acas Code. It remains a disciplinary situation even if the employer then decides to invent a redundancy (or other) situation to mask the real reason for dismissal. If an employer is unhappy with an employee, for whatever reason, that should be dealt with fairly, using the appropriate conduct or capability procedure. 

Find out how we can help.  Our partner, Jon Dunkley, heads the Wollens specialist Employment Department.  Contact him today for an informal chat, without obligation on 01271 342268 or via email at jon.dunkley@wollens.co.uk.