DOES THE ACAS COP1 UPLIFT APPLY TO SOSR DISMISSALS?
Julian Allsop, Guildhall Chambers
The punitive uplift/deduction (depending on one's perspective) that was one of the more effective innovations of the otherwise derided statutory dispute resolution provisions was reincarnated in the rather more holistic provisions of section 207A of the Trade Union & Labour Relations (Consolidation) Act 1992. This was, following public consultation, laid before both Houses of Parliament on 9 December 2008 and brought into effect by the Employment Code of Practice (Disciplinary and Grievance Procedures) Order 2009 with effect from 6 April 2009. The provisions provided a power to the Employment Tribunal to penalise a failure by a party to the proceedings in question unreasonably to comply with the applicable provisions of the ACAS Code of Practice 1 Disciplinary and Grievance (2009) (‘the 2009 Code') by up to 25% if just and equitable to do so. The list of jurisdictions which it applies to are set out Schedule A2 TULR(C)A 1992 and includes unfair dismissal under section 111 of the Employment Rights Act 1996.
The 2009 Code is expressed to apply to disciplinary situations which include misconduct and poor performance situations in the workplace. By contrast with the position under the statutory dispute resolution provisions under the Employment Act 2002 which applied where an employer contemplated dismissing or taking relevant disciplinary action (as defined) against an employee, the 2009 Code expressly does not apply to redundancy dismissals or the non-renewal of fixed term contracts. In a further contrast with the inclusive approach of the EA 2002 regime it is silent on whether it applies to dismissals for some other substantial reason (‘SOSR') or for ill health.
In the current chilly economic climate, employees are frequently faced with dismissal as a result of business reorganisations and restructuring or as a consequence of an attempt by their employer to change their terms and conditions. Is it right that the only protection that an employee has is that of ordinary considerations of fairness under s.98(4) ERA 1996 and if analogous to a redundancy situation, some consultation and the consideration of alternatives to dismissal, without the teeth of an uplift under s.207A TULR(C)A 1992?
On the face of it, it would be a surprising conclusion if there was a lacuna in relation to the recommended basic procedural safeguards and their manifestation in the protective s.207A TULR(C)A 1992 tariff, in particular as the potentially fair reason of SOSR is a very malleable concept that embraces a miscellany of reasons analogous to misconduct and performance, most notably the developing category of breakdown in trust and confidence cases.
For instance, there is the case of Leach v OFCOM  IRLR 839 CA where there were serious but unproven allegations of child abuse which resulted in a breakdown of trust and confidence and were sufficient to justify dismissal. Note also the case of Ezsias v North Glamorgan NHS Trust  IRLR 550 EAT, where a dismissal was held to be fair on the basis of the deterioration of staff relations as opposed to what arguably was the real reason of perceived misconduct. The reliance on the SOSR trust and confidence rationale in Ezsias enabled the employer to avoid the protracted prescribed misconduct procedure that would have been required to take disciplinary action against Mr Ezsias who was a consultant medical practitioner. Both of these cases had the flavour of misconduct, but were defended as SOSR cases by the employers. It would have been odd, had no procedure reflecting the norms of industrial relations practice been applied by the employers in Ezsias and Leach in dismissing those Claimants, for the Employment Tribunal to be shut out from considering an uplift under s.207A TULR(c)A 1992.
One would expect some appellate authority on this point by now. However, the only recorded instance of judicial consideration of whether the 2009 Code applied to SOSR dismissals occurred in the Employment Tribunal case of Cummings v Siemens Communications Ltd (2010) ET/3500013/10.
In that case, Siemens sought to force an unfavourable variation of terms upon its employees which included a provision that required employees to take 12 days' unpaid leave. Mr Cummings objected to this and was invited by telephone to attend a meeting. He duly attended the meeting, and refused the proposed variation. He then refused the prospect of being re engaged on the new terms. He was dismissed and brought a claim.
The Employment Tribunal was of the view that the 2009 Code applied to the dismissal, essentially by implication as unlike in redundancy situations, SOSR was not expressly excluded by the Code which was expressed to apply to disciplinary situations that ‘include' misconduct and/or poor performance. Despite this and the lack of a written invitation to the meeting, which in itself was not compatible with the 2009 Code, the overall procedure was found to be fair. Had the dismissal been unfair and non-compliant with the 2009 Code, it must follow that an uplift would have been considered as part of Mr. Cummings' compensation.
The Employment Tribunal jurisdiction is statutory. S.207A TULR(C)A 1992 expressly refers to Schedule A2 TULR(C)A 1992 which expressly includes unfair dismissal under s.111 ERA 1996. The only relevant Code of Practice to this statutory framework is the 2009 Code which expressly includes ‘disciplinary situations' such as misconduct and poor performance and excludes redundancy and the discrete case of termination of a fixed term contract (which in itself can amount to an SOSR reason - see for instance Terry v East Sussex County Council  ICR 536).
Two alternatives present themselves. The first is to the effect that the 2009 Code applies only to disciplinary situations which include misconduct and/or poor performance capability situations, with the effect that the Employment Tribunal cannot consider an uplift under s.207A TULR(C)A 1992 in other circumstances. This would accord with a literal reading of the applicable provisions. On this basis, in addition to the more straightforward misconduct and performance capability dismissals some SOSR dismissals that would be analogous to disciplinary proceedings (for instance Leach, Ezsias) would be included, although this would represent a significant departure from the approach under the previous Employment Act 2002 regime.
The second alternative adopts a purposive approach premised on the assumption that it was not the intention of the legislature to erode the workplace protection that was previously in place under the Employment Act 2002 but merely to roll back the sometimes draconian and disproportionate consequences of the standard and modified dismissal and grievance procedures, with the stated exceptions of redundancy and the expiry of a fixed term contract. On this basis, unless the case is in a category which was expressly excluded, the case will fall within the scope of s.207A TULR(C)A 1992. This would be in line with the Employment Tribunal's inclusive reasoning in Cummings v Siemens Communications Ltd although it could be said that it would be stretching the meaning of ‘disciplinary situation' somewhat, unless one takes the view that as with the previous Employment Act 2002 regime, the act of ‘dismissal' is in itself a disciplinary act even though the process that preceded it was not disciplinary in nature. It does not also sit entirely neatly with the reference to disciplinary warnings and suspension which are a feature of the 2009 Code of Practice, although it could be suggested that in non-misconduct ‘disciplinary situation' cases the intention is to provide a steer on how to conduct a generally fair procedure.
Until the matter is clarified, employers would be well advised to conduct themselves by reference to the purposive approach, even though there are contrary arguments to suggest that it does not apply in all non-expressly excluded cases. The overall trend in Employment legislation in the last 15 years has been one of the incremental increase in rights and as Cummings v Siemens Communications Ltd demonstrated, and until the matter has been determined at EAT level the position is very much at large.
Julian Allsop, Guildhall Chambers
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