The law says that if an employer fails to comply with a specific ACAS code, the tribunal can apply a maximum uplift of 25 per cent in compensation. In Rentplus UK Ltd v Coulson, the EAT held that even though the tribunal had not expressly identified which code had been breached, it was clear that the company should have dealt with any dissatisfaction of their employee’s performance under a capability or disciplinary procedure.
Unbeknown to Ms Coulson, her employer decided in March 2017 to dismiss her. In October 2017, after a new CEO was appointed, she found herself being frozen out of her role. On receiving a cash injection of £11m in February 2018, the company started a reorganisation.
Although the purpose was to increase the total number of posts, the reorganisation was described as a “redundancy” exercise by the company and Ms Coulson was asked to attend “consultation” meetings in April and May 2018. On 15 June, she submitted a grievance about the way she had been treated which was rejected, as was her appeal. She claimed unfair dismissal, among other things.
As the decision to dismiss Ms Coulson had been taken well in advance of the so-called consultation exercise, the tribunal concluded that it was a “total sham”. Likewise, the way in which the company had dealt with her grievance.
Her dismissal was not, therefore, fair as the reason was not redundancy but rather a desire to remove her from her role. There had been no criticism of her work, so the company could not claim she had been dismissed for capability.
The tribunal decided that the procedural failures were “so egregious” that it should make the maximum uplift in compensation of 25 per cent. The company appealed against the uplift on the basis that the tribunal had failed to identify which parts of the ACAS code on Disciplinary and Grievance procedures that it was supposed to have breached.
Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) states that if an employer has unreasonably failed to comply with a relevant ACAS code of practice, then it can increase any award to the employee by up to 25 per cent “if it considers it just and equitable … to do so”.
Dismissing the appeal, the EAT held that tribunals should ask the following questions when considering whether to apply the uplift:
- Did the claim raise an issue to which the ACAS code applied?
- Had there been a failure to comply with the code in relation to that issue?
- Was the failure to comply unreasonable?
- Was it just and equitable to award an uplift because of that failure and if so, by what percentage?
Although the EAT was critical of the tribunal in this case for not expressly stating whether the code applied because there was a grievance or a disciplinary situation, it was clear that the tribunal had found that the company should have dealt with any dissatisfaction they had with Ms Coulson’s performance under a capability or disciplinary procedure.
In relation to question two, the tribunal found that there had been a total failure to comply. Having described the failure as “egregious”, it was clear that it considered the breach to be more than just 'unreasonable' in answer to question three. As the tribunal had also found a total failure to apply any of the protections afforded under the Code, the EAT could see no error of law in its decision to award the maximum uplift of 25 per cent.
There are still far too many examples of employees being dismissed without any form of fair procedure and this is a useful reminder of the penalties that can be applied where an employer fails to apply a fair process.