Key takeaways:
- Don’t dismiss an employee in the heat of the moment
- All grievances should be dealt with in accordance with the ACAS Code
- Don’t assume a casual email or verbal complaint does not amount to a grievance. If an employee raises concerns about their terms and conditions or a potential breach of their contract or the company’s policies, consider whether the ACAS Code for grievances has been triggered
- It is natural for additional issues and complaints to arise during a grievance process. An employee need not raise a separate or additional grievance in order to have a right for those issues to be dealt with in accordance with the ACAS Code
- Failure to apply the Code could result in considerable costs to the company (up to 25% uplift)
In the recent EAT case SPI Spirits (UK) Ltd v Zabelin, the Claimant was awarded £1,626,452.07. This significant award was arrived at after the Tribunal applied a 20% uplift to the award (except the basic award) for the employer’s failure to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures.
Summary of facts
The Claimant agreed to take a temporary pay cut during the pandemic to help the business through difficulty. At the end of the agreed period for the pay cut, the company informed him that the business needed to extend the pay cut. He replied by email that the company did not have the right to unilaterally cut his pay. To address his concerns, he had a meeting with HR in which he repeated his concern that the company was unlawfully seeking to unilaterally vary his contract as well as several additional concerns, including his belief that the company was in fact profitable and did not need to extend pay cuts but was instead using the pandemic as an excuse to reduce employees’ pay and increase profits across the company and that in doing so the company had adversely affected staff mental health. Subsequently, the owner of the company, Mr Schefler, called the Claimant and, as the Claimant was reiterating his concerns, he cut the Claimant off and told him that he was fired.
The Key Findings
The Respondent argued that the ACAS Code had not been invoked because the Claimant had not actually filed a grievance. The Respondent noted that the ACAS Code notes that grievances should be submitted only after informal attempts to resolve the issue fail and the Respondent argued that Claimant had not reached that stage. The Respondent further argued that the complaints the Claimant had raised in the meeting did not amount to a formal grievance because they had not been in writing.
The Tribunal did not accept that the Claimant’s email and subsequent meeting with HR did not amount to a grievance. It noted that the claimant ‘raised concerns, problems and complaints.’ The Tribunal also noted that it cannot be the case that employers can simply dismiss employees before they have a chance to raise a formal grievance in order to avoid the Code being invoked. The Tribunal did seem to accept that some part of the grievance had to be committed to writing. However, the Tribunal noted that the Claimant’s concerns about his own pay had been documented in an email and that this was sufficient both in relation to the concerns included in his email as well as the concerns he raised subsequently in the meeting, noting that it is not uncommon for employees’ grievances to expand once a grievance meeting is held and that the additional issues he raised in the meeting were closely related to his the issues raised in writing. The Tribunal stated that it is not necessary for each new complaint raised at a grievance meeting be committed to writing in order to be dealt with properly by the employer.
What Can We Learn?
Of course, it is never advisable to dismiss an employee in what appears to have been in the “heat of the moment.”
This case also highlights that employers should be mindful that grievances do not need to be formally written grievances to invoke the ACAS Code. Where an employee raises any ‘concern, problem or complaint’ the employer should consider whether the ACAS Code should apply. The Code may apply whether or not the employee states they are submitting a grievance and even if their initial written complaint is limited. Employers should also be mindful that employees do not need to commit additional or new grievances raised in the process to writing in order for them to be dealt with.
Failing to follow the ACAS process can result in considerable awards, particularly if the employee in question is senior or highly paid.
If you are a multinational employer and would like to discuss the points raised in this alert, or if you have any questions, please contact Associate Kelsey Murrell or Partner and General Counsel Beth Hale.
