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How uplifting!

Can the ACAS Code uplift apply even if the dismissal was fair?

For certain specified claims a tribunal can increase the compensatory award made by up to 25% if the employer has unreasonably failed to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures. The EAT was recently required to determine if this uplift can still be applied even if a Tribunal determines that an individual was fairly dismissed.

Miss Brown was dismissed by Veolia ES (UK) Limited for conduct reasons following a lengthy suspension and disciplinary investigation and she claimed wrongful dismissal and unfair dismissal.  The Tribunal described the investigation and disciplinary process followed by the employer as “a catalogue of ineptitude and misjudgement” including failing to share witness statements, failing to provide full details of the disciplinary allegations, leading the witnesses, failing to put Miss Brown’s conflicting case to the witnesses, failing to contact potential witnesses requested by Miss Brown and failing to allow her an extension of time to prepare for the hearing.  However, as the Tribunal found that (despite the procedural failings) it was still within the band of reasonable responses for an employer to have treated the evidence available as sufficient to justify dismissal, Miss Brown’s unfair dismissal claim was unsuccessful. The Tribunal still upheld her wrongful dismissal claim as it did not consider Miss Brown’s conduct to have met the definition of gross misconduct within the employer’s policy and therefore found that she should have been dismissed on notice (instead of being summarily dismissed with immediate effect).  Her compensation was therefore limited to her notice period.

As it had decided that the dismissal had been fair, the Tribunal concluded that this meant that any failures in connection with the disciplinary process could not be taken into account when considering whether to apply an uplift in compensation in relation to breaches of the ACAS Code, in order to avoid a potential “windfall” to Miss Brown.  It therefore awarded only a 5% increase to reflect the employer’s failure to keep Miss Brown’s suspension under review and gave no compensation for the numerous failures related to the disciplinary process that was followed.  This limitation in the uplift granted was one of the grounds for appeal.

The EAT decided that the Tribunal’s findings were perverse and must be set aside.  The band of reasonable responses test applies to both the decision to dismiss and also the investigation process followed.  Given the Judge’s clear conclusion as to the failures of the investigation and disciplinary process followed, it was perverse for the Tribunal to have concluded the dismissal was fair.  The EAT also confirmed that the Tribunal’s approach as to the ACAS uplift was incorrect and must be reconsidered.  Even if the dismissal itself was deemed to be fair, all breaches of the ACAS Code should still be taken into account when determining any uplift in compensation for the other successful claims, this recognises that this uplift in compensation is intended to have a penal element to encourage employers to follow the Code.

This is a useful case for employers, reiterating the importance of keeping any decision to suspend under regular review and following a thorough and balanced investigation and disciplinary process in accordance with the ACAS Code even if the disciplinary outcome perhaps seems clear cut.