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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

About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.

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Article Published/Sorted/Amended on Scopulus 2010-05-31 15:52:05 in Employee Articles

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