Mr Holmes was dismissed on grounds of ill health. His employer admitted that the dismissal was unfair because it had failed to obtain an up-to-date occupational health report before taking the decision to dismiss. Mr Holmes argued that his compensation should be increased by 25% to reflect the employer's failure to follow the ACAS Code on disciplinary and grievance procedures (the Code) when it dismissed him.

The EAT confirmed that the Code does not apply to ill-health dismissals. The Code applies to disciplinary and grievance situations, including cases of misconduct and/ or poor performance. Disciplinary situations arise where some sort of culpable conduct is alleged against an employee that requires correction or punishment. An employee who is absent through illness or ill health is not culpable in this sense and disciplinary procedures are not appropriate to deal with lack of capability stemming from ill health.

Accordingly, the Code does not apply to internal procedures operated by an employer that relate to an employee's failure to perform his or her role as a result of ill health. The employer in this case was not obliged to follow the Code and no uplift to compensation was available.