ACAS Code doesn’t apply to capability dismissals with no disciplinary component

The EAT has confirmed that the ACAS Code of Practice on disciplinary and grievance procedures does not apply to ill-health dismissals where there is no allegation of misconduct.

In this case the employer had conceded that the dismissal was unfair, but said that the claimant was not entitled to an uplift in compensation for failure to comply with the Code. This argument was accepted by the employment tribunal, and endorsed by the EAT. It said the Code only applied to capability dismissals where there was a disciplinary component. In this case there was no dispute about the genuineness of the employee’s illness and its effect on his ability to do his job. His dismissal was only unfair because the employer had failed to obtain a new occupational health report, after an operation which had apparently resolved the pain he had been experiencing.

This is the first case in which the EAT has made an explicit ruling on the scope of the ACAS Code, and hence on the employment tribunal’s ability to uplift the compensation awarded by up to 25% where there has been non-compliance by the employer. The foreword to the Code makes it clear that it does not apply to dismissals due to redundancy or to the non-renewal of fixed term contracts. However, up to now it has not been clear whether it applied to dismissals for capability reasons where there is no disciplinary component.

It of course remains the case that in order to avoid a finding of unfair dismissal, it is normally still necessary for an employer to follow a fair procedure. In most capability cases this will be pretty similar to what the Code requires, even if the employee is not at fault in any way.