The Acas Code
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2 May 2010
The Employment Act 2008 (EA 2008) introduced a new regime
affecting the vast majority of employment tribunal claims in England, Wales and
Scotland from 6 April 2009.
At the same time, the Act will give tribunals a discretion to
increase or reduce awards by up to 25% in certain cases where the employer or
employee unreasonably fails to comply with the new Acas Code.
What follows reflects the law from 6 April 2009. It does not
apply to dismissals taking place or disciplinary procedures started before that
date.
Why is it important to follow the Code?
The Acas Code is intended to help employers and employees deal
effectively with issues of alleged misconduct or poor performance in the
workplace. When deciding whether an employee has been unfairly dismissed for
misconduct or poor performance, an employment tribunal will consider whether the
employer has followed a fair procedure. In doing so, it must take account of any
provisions of the Acas Code that appear to be relevant.
It can affect the level of compensation
If an employee brings a successful claim for unfair dismissal or
a number of other common types of claim including those related to
discrimination, breach of contract, working time, detriment, and deduction of
wages arising out of dismissal or disciplinary action for misconduct or poor
performance, the level of compensation awarded to the employee can be affected
if either party failed to follow the Code. If the employer unreasonably failed
to follow it, the tribunal may increase the employee's compensation by up to
25%. If the employee unreasonably failed to follow it, the tribunal may reduce
their compensation by up to 25%. The tribunal must decide what uplift or
reduction would be just and equitable.
When does the Code apply?
Misconduct and poor performance cases.
The Acas Code is part of a new regime under the EA 2008 which
replaces the statutory dismissal and disciplinary procedures (DDPs). Whereas the
DDPs applied to dismissal for nearly any reason, the Acas Code only applies to
disciplinary situations, a concept which includes misconduct and poor
performance but explicitly excludes dismissals on grounds of redundancy or the
non renewal of a fixed term contract. Whether a disciplinary situation can cover
anything other than misconduct or poor performance is not dealt with in the
Code. It is also not clear whether non renewal of a fixed term contract for
reasons of misconduct or poor performance should be included or not.
The Code is supplemented by a non statutory guide, which gives
further guidance on best practice. While the guide itself does not have to be
taken into account by tribunals, it does contain some useful guidance developed
from unfair dismissal case law, and therefore employers should not ignore it.
Misconduct and Poor Performance: What should the employer do?
1. The employer should investigate the issues
Established in case law of unfair dismissal it is crucial that
an employer first carries out a reasonable investigation.This may involve
investigatory meetings with the employee under investigation or it may simply
involve the collation of other evidence. Any investigatory meeting should not
result in disciplinary action without a disciplinary hearing.
If paid suspension is necessary during the investigation, this
should be as brief as possible and kept under review. The employer should make
clear that this is not in itself a form of disciplinary action.
2. The employer should inform the employee of the issues in
writing
If there is a case to answer, the employee should be notified
in writing of the alleged misconduct or poor performance and its possible
consequences in sufficient detail to enable them to respond at a disciplinary
hearing. Any written evidence, which may include witness statements, should be
provided to the employee.
The notification should set out the time and place of the
disciplinary hearing. It should also set out the employee's right under the
Employment Relations Act 1999 to bring a companion- either a fellow worker or a
trade union representative.
3. There must be a disciplinary meeting or hearing
It is a basic principle of fairness that a decision whether to
dismiss or take other disciplinary action should not be taken without a
disciplinary hearing or meeting. Managers, employees and their companions
should make every effort to attend the meeting. If the employee is persistently
unable or unwilling to attend without good cause, the employer should make a
decision on the available evidence. Either side should give advance notice of
any witnesses they intend to call.
At the hearing:
The employer should explain the allegations and go through the
evidence.
The employee should be allowed to set out their case and answer
the allegations.
The employee should have a reasonable opportunity to ask
questions, present evidence, call relevant witnesses and raise points about any
information provided by witnesses.
4. The employer should inform the employee of the decision in
writing
Following the hearing, the employer's decision should be sent
to the employee in writing without unreasonable delay. If misconduct or poor
performance is established, a dismissal would usually only be appropriate if
there has been a written warning and a final written warning. Gross misconduct
can justify dismissal for a first offence, but not without following the
disciplinary procedure.
Written warnings should set out the nature of the misconduct or
poor performance, the improvement required, and the timescale for improvement.
They should also specify how long they will remain current, and the consequences
of further misconduct or failure to improve within that period.
5. The employee has a right of appeal
If the employee feels the disciplinary action against them is
unjust, they should appeal in writing, specifying the grounds of their
appeal. If they bring a tribunal claim without appealing, any compensation they
are awarded may be reduced.
The appeal should be heard without delay, ideally at an agreed
time and place, and should be conducted impartially by a manager who has not
been previously involved. The employee can bring a companion to the appeal
hearing.
The law on unfair dismissal, time limits and compensation has
changed
Almost any type of dismissal was potentially covered by the
statutory DDPs, but there were complex regulations governing which procedure
applied and when they might be excluded. The new regime only applies to
disciplinary matters including misconduct and poor performance.
The consequences of failing to follow the correct procedure are
different under the new regime. The key differences include the following:
A dismissal without following an applicable DDP under the old
regime would have been automatically unfair. Under the new regime, the question
is whether the employer acted outside the band of reasonable responses in
treating misconduct or poor performance as the reason for dismissal, and the
tribunal will take account of the Acas Code in deciding that issue.
Under the old regime there were provisions for an automatic
three-month extension of time in certain circumstances. There is no automatic
extension of time under the new regime even if an appeal is still ongoing.
Compensation under the old regime could be adjusted by 10- 50%
for any failure to complete a DDP, although less than 10% was permissible in
exceptional circumstances. The adjustment under the new regime is 0-25% and will
only apply where a failure to follow the Acas Code is 'unreasonable'.
For more practical tips on this thorny issue, see next week's
article.
By Jane Coyle
Jane is a solicitor and can be contacted at jane.coyle@lawdit.co.uk
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