In a recent case, the Employment Appeals Tribunal (EAT) confirmed that the ACAS Code of Practice on Disciplinary and Grievance Procedures (the Code) only applies to dismissals where there is ‘culpable conduct’, whether in the form of misconduct or poor performance, which either requires correction or punishment. Therefore, where poor performance is a consequence of genuine illness, it is unlikely that the Code will apply since there is no ‘culpable conduct’ on the part of the employee.

In Holmes v Qinetiq Ltd [2015], Mr Holmes worked as a security guard for Qinetiq from 1996 to 2014. He had a number of extended absences relating to problems with his back, hips and legs, which ultimately led to him being dismissed on ill health grounds on the basis that he was no longer capable of doing his job.

Qinetiq conceded that his dismissal was unfair because it failed to obtain an up-to-date occupational health report about Mr Holme’s ability to reliably attend work having had an operation in 2014 to resolve his health issues. At the remedy hearing, Mr Holmes argued that there should be an uplift to his compensation on the basis that Qinetiq failed to follow the code when dismissing him. When the tribunal refused to award an uplift having concluded that the Code does not extend to dismissals on the grounds of ill health where there is no disciplinary component, Mr Holmes appealed.

However, the EAT dismissed his appeal.

It is clear from the Code that it is intended to apply only to situations where an employee faces a complaint or allegation that may lead to a disciplinary situation or disciplinary action. This infers that there needs to be ‘culpable conduct’, whether in the form of misconduct or poor performance, that either requires correction or punishment.

It is obvious that misconduct involves culpable conduct but poor performance is capable of involving both culpable and non-culpable conduct. The EAT said that where poor performance is a consequence of genuine illness or injury, it is difficult to see how culpability would be involved, or disciplinary action justified. Where an employee is absent through illness or ill health leading to dismissal, disciplinary action cannot ordinarily be invoked, which means that the Code does not apply.

This is in contrast with situations where, for example, ill health leads to a failure to comply with sickness absence procedures or on allegations that the ill health is not genuine. In those cases, any disciplinary procedure invoked would be to address the alleged culpable conduct on the employee’s part rather than any lack of capability arising from ill health.

In this case, no disciplinary procedure was invoked, because, aside from his illness, Mr Holmes was able to perform his job and there was no suggestion that he had breached Qinetiq’s rules of conduct or discipline so as to merit disciplinary action or to give rise to a disciplinary situation. Therefore, there was no need for Qinetiq to follow the Code.

This decision is a helpful reminder that employers who dismiss for genuine ill health, where there is no issue of poor performance, are not bound to follow the Code. The decision also clarifies that the Code will only apply to poor performance where there is some element of culpability on the part of the employee.
For further information, please contact Koichiro Nakada – Head of Japan Business Group (koichiro.nakada@lewissilkin.com) and Yoko Nakada - Senior Associate, Deputy Head of Japan Business Group (yoko.nakada@lewissilkin.com).
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