Employment Update: The ACAS Code of Practice (ACAS Code)

03 May 2013

A common problem for small businesses is that often they neither know what the ACAS Code is nor that it applies to them. Even if an employer feels as if they have dismissed an employee fairly (and by common standards they have), it can transpire that the failure to follow the ACAS Code results in the dismissal being held to be “unfair”. This can cost employers thousands of pounds in damages for unfair dismissal plus legal costs.

The ACAS Code essentially outlines how to handle disciplinary and grievance situations from an employer’s and employee’s perspective. The Employment Tribunal will consider whether the employer has followed a “fair procedure” when making a decision as to whether an employee has been unfairly dismissed for misconduct or poor performance. In doing so, it must have regard to any provisions of the ACAS Code that may be relevant.

However, a recent Employment Appeal Tribunal (EAT) case (Buzolli v Food Partners Ltd [2013] UKEAT/0317/12) held that an employer’s decision to dismiss an employee was fair even though the employer had not fully complied with the ACAS Code. In this case the employer had failed to explicitly notify the employee of the potential consequences of a disciplinary hearing and a written warning which were given to the employee. This is technically a breach of the ACAS Code but the EAT held that “as a matter of common sense” it was clear that the consequences of the disciplinary hearing and written warning were that the employee would be dismissed if he continued his misconduct.

Despite this decision, it is still crucial for employers to be aware of and follow the ACAS Code to reduce the risk of a claim. One of the main reasons for this is that an Employment Tribunal can order that an employee’s compensation be increased by 25% if the employer has failed to follow the ACAS Code in dismissing an employee.

For further information or more advice on dismissing an employee, please contact our Employment Team.