The Employment Appeal Tribunal in Phoenix House Ltd v Stockman & Anor upheld a Tribunal’s decision that the dismissal of an employee on the basis of an irretrievable breakdown in the working relationship was unfair but disagreed that the ACAS Code of Practice on Disciplinary and Grievance Procedures applied to such a situation.
In this case, there was a dispute between the Claimant and her colleagues which resulted in the Claimant being dismissed based on an irretrievable breakdown in the working relationship with the Company. The Tribunal cited four reasons for its conclusion that the dismissal was unfair, namely that the ACAS Code was not followed, that the disciplining officer had started from the position that the relationship had broken down and put the burden on the Claimant to prove otherwise, that matters of which the Claimant was unaware were taken into consideration (and thus she was not given adequate opportunity to challenge assertions made about her) and that the decision was outside the range of reasonable responses an employer would make.
The decision was upheld on appeal but the EAT disagreed that the ACAS code applied to the dismissal. It cited recent cases which had discussed the potential for the Code to apply to SOSR dismissals (such as Hussain v Jurys Inns Group and Lund v St Edmond’s School – see our previous blog here). However, the EAT said that in its judgment the Code did not apply to SOSR dismissals and that clear wording would be required to give effect to such an outcome. It recognised that elements of the Code are capable of being, and should be, applied (for example, in this case, giving the employee the opportunity to demonstrate that she could fit back into the workplace without undue disruption) but said that to go beyond that and impose a sanction because of a failure to comply with the letter of the ACAS Code was not what Parliament had in mind.
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This literal approach provides some clarity for employers on SOSR dismissals, however, the case itself is also a warning of the difficulty in dismissing fairly for a breakdown in the working relationship, in particular. Whilst this type of dismissal can amount to an SOSR (and thus is potentially a fair reason to dismiss), employers should be cautious about finding an irretrievable breakdown too readily. It is also clear from the judgment that employers will be expected to follow a fair process for SOSR dismissals which may well include taking some of the steps set out in the Code.
