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Mo Sethi Wins Major Compensation Appeal Limiting Scope of ACAS Code on Disciplinary Procedures

For the first time, in Holmes
v Qinetiq Ltd
(UKEAT/0206/15/BA, 26 April 2016, Simler P) the EAT has
addressed the question of whether or not the power under section 207A TULRCA
1992 to increase or decrease an award of compensation by up to 25% for failure
to comply with the requirements of any relevant ACAS Code of Practice extends
to dismissals on grounds of ill health.

The Claimant was
dismissed on grounds of ill health on the basis that he was no longer capable
of performing his job. He claimed compensation for disability discrimination
and unfair dismissal. The ET ruled that the ACAS Code only applies to
dismissals involving culpability.

Upholding the ET, the
President of the EAT, Mrs Justice Simler, held at para.15 that: “… properly
construed the Code of Practice does not apply to internal procedures operated
by an employer concerning an employee’s alleged incapability to do the job
arising from ill health or sickness absence and nothing more. It is limited to
internal procedures relating to disciplinary situations that include misconduct
or poor performance but may extend beyond that, and are likely to be concerned
with the correction or punishment of culpable behaviour of some form or

Implications of the decision

Employers who dismiss
employees for reasons which do not merit disciplinary action or give rise to a
disciplinary situation are not required to follow the ACAS Code of Practice on
disciplinary procedures (although it is often good practice to do so). As a
result, the uplift in compensation under section 207A(2) is not available to such

Mohinderpal Sethi appeared for the successful respondent company.He is author
of Employment Tribunal Remedies (4th Edition, Oxford University
Press) and has particular expertise in very high value compensation claims.

The transcript of the Judgment
published on 17 June 2016 can be found HERE.

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