May 28, 2015

Written warnings may be disregarded

Written warnings may not be sufficient evidence in employee dismissal cases anymore, according to the Court of Appeal.

The Court of Appeal in Way v Spectrum Care Limited [2015] EWCA Civ 381 held that a warning given in ‘bad faith’ should not be taken into account in deciding whether there is, or was, sufficient reason for dismissing an employee.

The employee, in this case, was given a final written warning for what was said to be the inappropriate appointment of an individual by him in his capacity as recruitment manager, contrary to the employer’s laid down procedures regarding fair recruitment and the disclosure of any relationships. The warning encouraged him to read and abide by company policies.

A few months later the employer became concerned that there may have been instances of inappropriate email, texts and images being sent by staff internally and externally.

After carrying out an investigation it was concluded that the employee, as well as others, had sent inappropriate emails, which were considered to merit a final warning. However because he was already subject to a final written warning it was determined that he should be the subject of disciplinary process and he was subsequently dismissed.

He then brought a claim for unfair dismissal. Dismissing his claim the Employment Tribunal said that the employer had undertaken a reasonable investigation in relation to the inappropriate emails, the process was fair and reasonable and the decision to dismiss was within the band of reasonable responses.

The employee appealed to the Employment Appeal Tribunal arguing that the Employment Tribunal that the tribunal had not addressed his allegation that the final written warning had been given in bad faith.

He alleged that the recruitment was in line with company procedure, policy and ethos and was sanctioned by his line manager. He alleged that his line manager had started the disciplinary proceedings in order to cover up his own part in the appointment and that the line manager had indicated before the hearing which he chaired that the outcome would be a final warning.

He also alleged that the company’s Managing Director told him not to appeal, as it was the intention of the company that, if an appeal was received, it could be escalated to dismissal. As a result of this conversation, the employee said he did not appeal the decision. The employer disputed this version of events.

Dismissing his appeal the Employment Appeal Tribunal said that whilst the Employment Tribunal should have allowed evidence and ought to have investigated the points being made by the employee, it would not have made any difference to the outcome, namely that the employee had been fairly dismissed.

It said that the employer was entitled to have regard to the warning even if in fact it had resulted from the line manager’s bad faith and that given that warning, dismissal almost inevitably followed and its fairness could not be doubted.

The employee then appealed to the Court of Appeal arguing that the Employment Appeal Tribunal was wrong to conclude that a warning given in bad faith was nonetheless a valid warning which could be relied on.

Allowing the appeal the Court of Appeal said that a warning given in bad faith is not, in circumstances such as these, to be taken into account in deciding whether there is, or was, sufficient reason for dismissing an employee. An employer would not be acting reasonably in taking into account such a warning when deciding whether the employee’s conduct was sufficient reason for dismissing him; and it would not be in accordance with equity or the substantial merits of the case to do so.

The case has been remitted to a fresh Employment Tribunal in order to determine whether or not the employee was unfairly dismissed. For that purpose it will be necessary for the Employment Tribunal to decide whether the warning given was given in bad faith.

This case is a reminder of an earlier case of Wincanton Group Plc –v- Stone and one other [2012] UKEAT/0011/12 where the Employment Appeal Tribunal addressed the very same issue.  On that occasion the EAT found that the earlier warning was issued in good faith and was not manifestly excessive when it was relied upon to dismiss the employee.

Therefore, it is important that where an earlier written warning is relied upon to support a case for dismissal the reasoning for it is fairly applied.  Should a Employment Tribunal find that the warning which is relied upon by an employer has been issued in bad faith or is manifestly excessive, that warning cannot be relied upon even if the process and outcome of the later dismissal is found to be reasonable.  If the earlier warning is found to be invalid it will inevitably follow that the ensuing dismissal will be unfair as the warning is effectively discounted.

To ensure that disciplinary warnings are issued fairly, or to ensure that earlier warnings are valid if being relied upon in a potential dismissal case, please contact our advice team on 0844 391 1921.

By Jonathan Melia

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