The ACAS Code of Practice on Disciplinary and Grievance Procedures (the Code) applies to certain workplace situations to ensure reasonableness and fair process. Generally, the Code sets out minimum standards which apply in grievance situations, or when an employee is subject to performance management or disciplinary processes. Failure to follow the Code can result in adjustments to overall compensation of up to 25%, so the Code has real teeth.
The Code clearly states however that it does not apply to redundancy situations.
However, in the recent case of Rentplus UK Ltd v. Coulson [2022] EAT 81, the Employment Appeal Tribunal (EAT) decided that, where that redundancy consultation was a “sham”, the Code did apply. In consequence, the employment tribunal’s finding of a 25% uplift to compensation on account of the employer’s failure to follow the Code was upheld.
Prior to being dismissed for redundancy, Ms Coulson, the CEO, raised a grievance (which wasn’t upheld) to the effect that the proposed reorganisation affecting her did not constitute a true redundancy situation. When she was later dismissed for redundancy, she brought claims of unfair dismissal and sex discrimination. The Employment Tribunal (ET) found that the redundancy consultation meetings that had taken place with her were a sham, and that the actual decision to dismiss her had been taken more than a year before the redundancy consultation actually began. The ET also found that Ms Coulson had also been discriminated against on the grounds of sex.
The main reason that the ET judgment was appealed to the EAT was because the employer argued that its reason for dismissal was redundancy, and so the Code (and the 25% uplift) could not apply. The EAT gave this argument short shrift on the facts. It held that an employer cannot get around the Code (and avoid a compensation uplift) by, in what are really disciplinary or performance situations, presenting their reasons as something else, such as redundancy. The EAT further upheld a finding by the ET that a finding of sex discrimination doesn’t preclude the application of the ACAS code. Issues with an employee’s conduct or capability, even if they are the result of discriminatory assumptions, is still a situation to which the Code applies - a finding of discrimination does not require that the principal reason for the treatment was a protected characteristic (in this case, sex).
This case serves as a timely reminder to employers that the Code can still apply, even in situations that are not being addressed by them as grievances or disciplinary matters. This may be the case particularly where an “at risk” employee disputes during the redundancy consultation process that there is actually a redundancy situation at all. In those circumstances, prudent employers will keep the principles of the Code in mind and structure the redundancy consultation process accordingly. Doing so will mitigate the risk of a compensation uplift under the Code were an unfair dismissal claim later to succeed.
Do you feel you have been unfairly singled out, or that there may be 'something more' to the decision to put you at risk of redundancy? We can advise you about whether laws prohibiting unfair or discriminatory redundancy dismissals may have been breached.
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