Sham dismissals and ACAS uplifts

Section 207A of the Trade Union and Labour Relations (Consolidated) Act 1992 introduces a power to an employment tribunal to award an uplift (or reduction) in compensation awarded upon the success of a claim if the employer (or worker/employee) has failed to follow a relevant ACAS Code of Practice (the main one being the ACAS Code of Practice on Disciplinary and Grievance Procedures).

A discretionary power

The power to award an uplift is discretionary on the part of the tribunal (it does not need to do it), and even where there is a breach of an ACAS Code a tribunal is not required (but can choose) to consider the matter of its own volition. Only where the matter is raised by a party is an employment tribunal required to determine the matter, as confirmed in Pipecoil Technology Ltd v Heathcote (2012):

[T]here was no claim before the Tribunal that the compensatory award should be increased pursuant to section 207A of the 1992 Act. By the use of the word “claim”, we do not intend to convey that there needed to be a formal claim; the matter needed, however, to be raised expressly before the Tribunal, in our judgement. No submissions were made on the Claimant’s behalf before the Tribunal that the compensation should be increased pursuant to section 207A. The Tribunal cannot be criticised in the circumstances for not dealing with the point of their own motion. In our judgment, it is too late for this claim to be made in this appeal.

Paragraph 24 of the EAT’s judgment in Pipecoil Technology Ltd v Heathcote (2012).

The decision in Heathcote makes clear, the “claim” need not be formalised in pleadings and can be expressly raised in tribunal proceedings it can be overlooked (as appears to have happened in Heathcote where the claimant was represented by Counsel). Given this is easily overlooked in the midst of a trial it is sensible for a claimant to expressly submit the request for an ACAS uplift in either any written submissions or, preferably, the ET1 claim form itself.

Uplift in sham dismissals

More recently the EAT in Rentplus UK Ltd v Coulson (2022) has considered the tests an employment tribunal should consider when determining whether an ACAS uplift should apply. This is a helpful case to bookmark to help a claimant prepare their case on an uplift in advance. But, before getting to the four-stage test set out in Coulson, the case is also interesting on the question of whether the application of a sham disciplinary process itself engages the requirements to consider applying an ACAS uplift.

The employment tribunal found that the claimant had been forced through a sham consultation process before her dismissal. It was a sham process because the decision to dismiss was predetermined – it is not the label of the dismissal that determines whether a dismissal process engages a disciplinary or grievance issue, “what is necessary is that the employer considers that there is an issue of potential misconduct or poor performance that must be addressed” (paragraph 29). In an interesting section of the judgment, and one that will be helpful to claimants, the EAT observed that:

if an employer acts in bad faith and pretends to apply an appropriate procedure, I cannot see how that could amount to compliance with the Acas Code. If dismissal is predetermined and the employer will not take any account of anything said by the employee, at a hearing or appeal, it is hard to see how the employee is in a better position than would have been the case if the procedure had not been applied at all, and the meetings had not taken place.

Paragraph 37 of the EAT’s decision in Rentplus UK Ltd v Coulson (2022).

Therefore, if there is a sham and provably predetermined dismissal process related to a disciplinary or grievance issue (in fact, not just in reference to label used by employer to justify dismissal) Coulson is a helpful case to argue that this will engage the ACAS Code and that an ACAS uplift should be applied.

The Four Stage Test

Aside from its comments on the sham process issue (which is a part of question 1 below) another way in which the Coulson decision may be helpful is in its identification of the fourfold test it suggests an employment tribunal should adopt in considering whether to apply an ACAS uplift:

• Is the claim one which raises a matter to which the Acas Code applies?
• Has there been a failure to comply with the ACAS Code in relation to the matter?
• Was the failure to follow the ACAS Code reasonable?
• Is it just and equitable to award an uplift because of the failure to comply with the ACAS Code and, if so, by what percentage, up to 25%?

Adopting this approach will, I think, assist claimants in ensuring issues are put before tribunals and increase the likelihood of claimants achieving a better result.

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