Compensation for discriminatory dismissals: EAT upholds 25% uplift on compensation

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Compensation for discriminatory dismissals: EAT upholds 25% uplift on compensation

Published 15 July 2022

The EAT has upheld a tribunal’s decision to award a 25% uplift to compensation for a discriminatory sham redundancy dismissal.

THE FACTS

Ms Coulson was employed by Rentplus UK Limited as Director of Partnerships, reporting to the leadership team and working with the CEO.  Unknown to her, a decision was made in 2017 to dismiss Ms Coulson.  A new CEO was appointed, and Ms Coulson was frozen out from her role.  In 2018, Rentplus began a reorganisation, describing this as a “redundancy exercise”, although there was an increase in the total number of posts.  Ms Coulson was put at risk, and attended consultation meetings.  She raised a grievance about the assessment of her role as being redundant and that she had been marginalised since 2017.  Her grievance (supposedly conducted by the company’s HR consultants) was not upheld, and her internal appeal was unsuccessful.  She was subsequently given notice of dismissal, and claimed in the employment tribunal that she had been unfairly dismissed and subjected to direct sex discrimination.  

The employment tribunal found that the consultation meetings were a sham as the decision had been made to dismiss her a long time before.  The real reason for her dismissal was a desire to remove her from her role.  The real decision maker in her grievance was the new CEO, although the grievance had supposedly been conducted by the respondent’s employment consultants and (the EAT later said) the tribunal clearly considered that the grievance was as much of a sham as the redundancy. 

The tribunal held that the dismissal was unfair.  It awarded a 25% uplift for a failure to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures, referring to the claim for unfair dismissal succeeding and the failures being so egregious.  The employment tribunal also found that there were facts from which it could infer sex discrimination.  Rentplus appealed the 25% uplift, and the EAT dismissed the appeal.

The following points were key to the tribunal’s and the EAT’s considerations.

  • The ACAS Code does not apply to redundancy dismissals.
  • However, employers cannot avoid following the ACAS Code by pretending that a misconduct or poor performance dismissal is a redundancy dismissal.
  • Redundancy was not the real reason for the dismissal, and the ACAS Code applied.
  • Even had this not been a “disciplinary” situation to which the ACAS Code applied, the Code would have applied to the grievance process.
  • A finding of unlawful discrimination will not preclude the application of the ACAS Code to a dismissal to which the Code applies.
  • If the employer’s view of an employee’s performance or conduct is to an extent a result of discriminatory assumptions, this will still be a disciplinary situation, and the ACAS Code will apply.
  • If an employer genuinely attempts to comply with the ACAS Code but still makes a mess of it, so that the dismissal is unfair, it may be appropriate not to award an uplift even if there has been a breach of the ACAS Code.
  • If an employer acts in bad faith and pretends to follow a procedure, it is hard to see how this could amount to compliance with the ACAS Code.

WHAT DOES THIS MEAN FOR EMPLOYERS?

This case is a useful reminder of the dangers of pretending that a dismissal is a “redundancy”.  It is also a reminder that employers should consider whether it is appropriate to follow the ACAS Code even where the dismissal is not obviously a dismissal for performance or conduct reasons.

Rentplus UK Ltd v Ms Susan Coulson 

Authors

Zoë Wigan

Zoë Wigan

London - Walbrook

+44 (0)20 7894 6564

Ceri Fuller

Ceri Fuller

London - Walbrook

+44 (0)20 7894 6583

Hilary Larter

Hilary Larter

Leeds

+44 (0)113 251 4710

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