Employers will be aware that employment tribunals can find dismissals to be procedurally unfair and increase compensation awards by up to 25% if they unreasonably fail to comply with the Acas Code on Disciplinary and Grievance Procedures, which has been in force since last year.
The Code expressly states it applies to “disciplinary situations” which “…includes misconduct and/or poor performance.” It is made clear in the Code itself that its provisions do not apply to redundancy dismissals or to the non-renewal of fixed term contracts. A recent tribunal decision has ruled that the Code applies to “some other substantial reason” dismissals too, which would include, for example, dismissals as a consequence of a business reorganisation, or where there is a breakdown in the relationship between employer and employee, or where, as in the present case, the employee refuses to accept reasonable changes to terms and conditions of employment.
A recent case before the Nottingham Employment Tribunal (Cummings v Siemens Communications Limited) concerned a dismissal of an employee who had refused to accept a contractual variation which would have provided for him to take 12 days’ unpaid leave, that measure being introduced to help save costs during a period of financial difficulty for the company. Mr Cummings was dismissed and offered re-engagement on the new proposed terms which he declined to accept. The subsequent dismissal process did not fully meet the key procedural recommendations of the Code though the identified failings were not so great as to lead to a finding that the dismissal was procedurally unfair. The Tribunal also found that the dismissal was, in all the circumstances, substantively fair.
On the point as to whether or not the Code applied to a dismissal for some other substantial reason, the Tribunal attached importance to the wording of the introduction to the Code which states that its provisions “includes” dismissal for misconduct and/or poor performance, which was not to limit the Code to dismissal only for those reasons. The Tribunal went on to find that had there been an intention to exclude SOSR dismissals from the scope of the Code, the Code would clearly have done so in the same way that it expressly excluded redundancy dismissals and dismissals consequent upon the expiry of a fixed term contract.
Some commentators have expressed surprise at this decision, arguing that the Code was intended and understood to apply only to “disciplinary and grievance situations”. Even so, and while this judgment is not legally binding on other tribunals, employers should be conscious of at least a strong possibility that the Code may be held to apply in a broader range of dismissals other than purely “disciplinary” matters and to comply with the Code save where there are very good reasons for not doing so.