Key Points
- Sanju Pal, an Accenture manager diagnosed with endometriosis, was dismissed under the firm’s ‘up or elsewhere’ performance policy after being rated ‘not progressing’ twice, following surgeries and sick leave in 2018 and 2019.
- A 2022 employment tribunal ruled Pal’s dismissal procedurally unfair but awarded no compensation via a 100% Polkey reduction, deeming dismissal inevitable even with fair procedure; her disability discrimination claim failed.
- Pal appealed, arguing the ‘up or elsewhere’ model unfairly assesses capability for promotion (Senior Manager level) rather than her contracted Manager role.
- The Employment Appeal Tribunal (EAT) upheld Pal’s appeal on multiple grounds, remitting the case for rehearing by a fresh tribunal.
- EAT ruled that capability dismissals must relate to “work of the kind which [the employee] was employed by the employer to do,” casting doubt on ‘up or out’ models common in professional services.
- EAT criticised the original tribunal for substituting its judgment on Polkey reduction (speculating Accenture would create a new policy), ignoring Pal’s disability impact, and adverse credibility findings without proper analysis.
- Lawyers warn employers using such policies risk disability discrimination claims, as issues from disability need only be “an effective cause” of dismissal.
- Commentators suggest ‘some other substantial reason’ (SOSR) may justify such dismissals, but employers must ensure fair processes, including specific policies for escalation to warnings or dismissal.
- The ruling questions progression-based models judging employees against higher-level standards, potentially requiring robust HR Performance Management training to mitigate risks.
The Employment Appeal Tribunal has cast significant doubt on the fairness of “up or elsewhere” performance management models after upholding an appeal by Sanju Pal against Accenture. Pal, a manager at the global consultancy firm, was dismissed in July 2019 following repeated “not progressing” ratings under Accenture’s progression-based policy. This model deems employees underperforming if not ready for promotion within set periods, potentially leading to dismissal.
As detailed in the People Management article, Pal underwent urgent surgery to remove two ovarian cysts in September 2018 due to her endometriosis diagnosis, followed by a month of sick leave. Upon return, she received a “not progressing” rating for her end-of-year performance. After further surgery and a phased return to full-time work by 4 March 2019, she was again rated “not progressing” in June, leading to her dismissal a month later. Her internal appeal failed.
In 2022, an employment tribunal found the dismissal procedurally unfair, citing Accenture’s use of a disciplinary policy for capability grounds and lack of independent decision-makers. However, applying a 100% Polkey reduction, the tribunal awarded no compensation, concluding dismissal would have occurred anyway. Pal’s disability discrimination claim under the Equality Act 2010 was dismissed.
Pal appealed to the EAT, challenging the Polkey assessment and the fairness of judging her capability against Senior Manager standards rather than her Manager role, as per the Employment Rights Act 1996.
What Did the EAT Decide on Capability Grounds?
The EAT ruled in Pal’s favour, determining that capability for dismissal must be assessed against “work of the kind which she was employed by the employer to do” – her contractual Manager duties. Accenture’s model focused on promotion readiness, which the EAT said may not qualify as capability dismissal but potentially “some other substantial reason” (SOSR), requiring employers to justify fairness.
As reported by People Management, the EAT judgment raises questions about ‘up or out’ policies prevalent in professional services, stating employers must show they acted reasonably even if promotion potential is considered alongside current role performance.
In Blake Morgan’s analysis, the original tribunal acknowledged Accenture was “absolutely entitled” to its progression model and made no criticism of judging Pal against Senior Manager standards. Yet the EAT overturned this, holding that dismissal for lacking next-level ability does not align with statutory capability tests.
Solicitors Journal noted the EAT’s examination: dismissal under such models might constitute SOSR, but tribunals must distinguish if it stems from current role performance or mere promotion unreadiness on remission.
Why Was the Polkey Reduction Overturned?
The EAT found the lower tribunal erred by speculating on a counterfactual: that Accenture would have introduced a new policy mirroring the flawed process, thus curing procedural defects. No evidence supported this, the EAT held; tribunals must assess what the employer would have done, not what they themselves deem appropriate.
People Management reported the EAT’s view: the tribunal applied a “substitution mindset,” deciding what it would have done rather than evaluating Accenture’s likely actions.
How Did the EAT Address Disability Discrimination?
The EAT criticised the tribunal for forming an “extremely adverse view” of Pal’s credibility and “effectively ignoring” her disability impact statement, despite supporting medical evidence. It mandated reconsideration of whether endometriosis substantially affected daily activities, making it a disability.
“The employment tribunal should have at least considered whether it accepted some of what the claimant stated in her impact statement about the effects endometriosis had on her ability to carry out normal day-to-day activities, notwithstanding the negative view it formed as to her reliability generally,” the EAT stated.
What Are the Implications for Employers Using ‘Up or Elsewhere’ Policies?
Experts urge caution. As explained by Ian Jones, director and principal solicitor at Spencer Shaw, in People Management: “For a legal claim to be successful, the things arising from disability do not need to be the main or principal reason for dismissal, just an effective cause.” He noted capability justifies dismissal for inability in employed work, but ‘up or out’ targets promotion, possibly fitting SOSR if justified.
Alan Lewis, partner at Constantine Law, added to People Management: “Firms with an ‘up or elsewhere’ policy should have a policy specifically on how to deal with concerns where an employee is not showing the required improvements and how to escalate that towards sanctions such as warnings or dismissal.” He stressed following disciplinary processes closely.
Blake Morgan highlighted the procedural flaws: Accenture deviated from its policy without independent makers, leading to the initial unfairness finding.
When Did Key Events in Sanju Pal’s Case Unfold?
Pal’s timeline began with her 2018 surgery and sick leave, followed by the first “not progressing” rating. The second surgery, phased return, and June 2019 rating preceded her July dismissal. The 2022 tribunal decision came years later, with the EAT appeal succeeding recently, remitting for rehearing.
Who Is Sanju Pal and What Is Accenture’s Performance Model?
Sanju Pal served as a Manager at Accenture, impacted by endometriosis requiring multiple interventions. Accenture’s model, per People Management, requires progression within timelines or faces underperformance sanctions, including dismissal – a “up or elsewhere” approach.
The EAT affirmed employers can set high standards but must align dismissals with legal grounds.
What Broader Questions Does This Raise for Professional Services?
The ruling challenges ‘up or out’ in consultancies and law firms, per People Management, potentially increasing scrutiny on performance-linked dismissals.
For HR professionals navigating these complexities, targeted Employment Law courses can equip teams to design compliant policies and handle tribunals effectively.
This case, now remitted, underscores evolving employment standards. Employers should review performance frameworks against EAT guidance to avoid similar appeals.