In Phoenix House Ltd v Stockman and anor, the EAT has held that the financial penalties for non-compliance with ACAS code on disciplinary and grievances does not apply to dismissals for a breakdown in the working relationship which are classed as dismissals for ‘some other substantial reason’ (SOSR).
The EAT found that while elements of the ACAS code are capable of and should be applied, commonsense fairness should prevail.
This case is yet another helpful reminder that the ACAS Code of Practice is limited to situations where the disciplinary or grievance procedures are relied upon.
This case follows the EAT’s decision in Holmes v QinetiQ Ltd EAT 0206/15, where it held that the ACAS Code does not apply to ill-health dismissals. We consider that this Phoenix House case will be applicable to business reorganisations, or changes to terms and conditions of employment,which result in dismissal. There is a well- rehearsed fair procedure to follow in terms of a transparent consultation process in such situations.
What we would say to employers however is that if you indicate to your employee that you will follow a basic dismissal process which means a final hearing, written outcome and opportunity to appeal, you should comply with that process.