Dismissal for some other substantial reason

16th November 2010

Dismissal for some other substantial reason

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The Nottingham employment tribunal has decided that the Acas Code applies to a dismissal for some other substantial reason

In April 2009, the Statutory Disciplinary Procedure was repealed and replaced by a new Acas Code on Disciplinary and Grievance Procedures that affected the outcome of an unfair dismissal claim and the calculation of damages. The Nottingham employment tribunal had decided that it applied to a dismissal for some other substantial reason (known as SOSR dismissal by employment lawyers).

This is only an employment tribunal decision and may be appealed. However, employers wishing to take a cautious approach should bear it in mind.

The now repealed Statutory Disciplinary Procedure applied to almost every dismissal, most notably redundancy dismissals and the non-renewal of a fixed term contract. When it was repealed, it was replaced by the Acas Code on Disciplinary and Grievance Procedures. Unlike the failure to follow the Statutory Disciplinary Procedure, not following the Acas Code does not give rise to an automatic unfair dismissal. It will however be taken into account when assessing the fairness of the dismissal and may give rise to an uplift in damages of up to 25%.

A SORS dismissal is a catch-all category for dismissal which derives from business decisions and are not by reason of conduct, performance, redundancy, retirement or effect of the law. The Nottingham case involved a dismissal for refusing to accept a substantial modification of the employee’s contract of employment.

The Acas Code specifically excludes redundancy and the non-renewal of a fixed term contract from its ambit. It states in its introduction that “disciplinary situations include misconduct and/or poor performance”. The Nottingham tribunal decided the fact that the Acas Code uses the word ‘include’ means that its application is not limited to disciplinary and performance and therefore added SORS to the ambit of the Acas Code.

This has come as a surprise especially as the title of the code is the Acas Code on Disciplinary and Grievance Procedures. Many commentators of the legislation assumed that it excluded SOSR dismissals. The tribunal’s logic was that, since some types of dismissal are expressly excluded, dismissals that are not so excluded are intended to be covered.

Whilst waiting for this issue to be decided by the higher courts we recommend that you err on the side of caution. When taking a decision that may affect an employee’s continued employment other than for reasons of redundancy, non renewal of a fixed term contract or retirement, you should at least comply with the spirit of the Acas Code, derived from principals of natural justice, the main features of which are:

  • invite the employee to the meeting in writing
  • allow them to be accompanied
  • listen to what they have to say before taking your decision
  • set out your decision in writing and provide for a right to appeal.

This will not only save you from a finding of unfair dismissal, it will also minimise the risk of the employee lodging a claim. The more an employee feels that they have a say in their future, the less likely they are to resent your decision.

Case Reference: Cummings v Siemens Communications Ltd ET/3500013/10


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