A suggested four-stage test to apply when considering an Acas uplift ((1) Slade, (2) Hamilton v (1) Biggs, (2) Stewart (3) Aethelbert Ltd)

When considering the effect of an employer’s failure to comply with a relevant Code under section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A 1992), employment tribunals might choose to apply a four-stage test including considerations of (1) whether an Acas uplift would be just and equitable, (2) if so, at what percentage, (3) whether there is any overlap or double-counting with other general awards, and (4) a final sense-check that the sum of money represented by the uplift is not disproportionate in absolute terms. Also, awards for injury to feelings and for aggravated damages made in connection with termination of employment are taxable under section 401 of the Income Tax (Earnings and Pensions) Act 2003 and are therefore subject to grossing up in order to take into account the effect of taxation, according to the employment appeal tribunal (EAT).

(1) Slade, (2) Hamilton v (1) Briggs, (2) Stewart, (3) Aethelbert Ltd (EA-2019–000687–VP & EA-2019–000722)

 What are the practical implications of this case?

This judgment relates to an appeal against an employment tribunal’s assessment of compensation following extremely serious findings of discrimination on grounds of pregnancy or maternity. The case is likely to be of interest to practitioners both factually and legally.

First looking at the background facts to the case, which almost read like a case study, these provide a shocking example of this type of discrimination, for example:

• Sir Benjamin Slade Baronet was found to have set upon a course of conduct to drive out two female employees from his business due to finding the timing of their pregnancies highly inconvenient
• the tribunal went so far as to describe his suspension and trumped up dismissal of one of the claimants, who delivered her baby prematurely, as ‘one of the most egregious acts of discrimination possible’

The background facts also demonstrate how a respondent can make things even worse by aggravating the situation at the tribunal hearing. The tribunal found that Sir Benjamin:

• made ‘wide-ranging and lurid allegations’ about the claimants ‘without any substantiation whatsoever’ just to ‘throw some dirt’ at them
• behaved in a way that was ‘arrogant and misogynistic’ when giving evidence

Finally, they illustrate the point that another person, in this case Mr Hamilton, can be jointly and severally liable if they act alongside the main perpetrator in carrying out acts of discrimination, e.g., in this case both respondents were found to be responsible although Sir Benjamin Slade was the driving force and controlling influence behind them and Mr Hamilton was found to be doing Sir Benjamin’s bidding.

Turning then to the legal points. The EAT looks in some detail at the nature of the Acas uplift and its relationship (or indeed lack of relationship) with other elements in a compensatory award. Griffiths J provides the following four-stage test as a possible approach to be followed by parties and tribunals in relation to a potential uplift following an employer’s failure to follow a relevant Acas Code:

• is the case such as to make it just and equitable to award any Acas uplift?
• if so, what does the tribunal consider a just and equitable percentage, not exceeding although possibly equalling, 25%?
• does the uplift overlap, or potentially overlap, with other general awards, such as injury to feelings; and, if so, what in the tribunal’s judgment is the appropriate adjustment, if any, to the percentage of those awards in order to avoid double-counting?
• applying a final sense-check, is the sum of money represented by the application of the percentage uplift arrived at by the tribunal disproportionate in absolute terms and, if so, what further adjustment needs to be made?

 The judgment also provides a useful example of the awards for injury to feelings and aggravated damages being taxable and therefore subject to grossing up. It serves as a reminder that acts leading up to a dismissal, e.g. contrived charges or behaviour to trigger a resignation, can still be included as being ‘connected’ to termination and therefore awards in respect of these should still be included in the taxable element for the purposes of section 401 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

Case details

• Court: Employment Appeal Tribunal
• Judge: The Honourable Mr Justice Griffiths
• Date: 1 December 2021

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