Reliance on previously expired warnings when dismissing
Can an employer dismiss for misconduct when there have been several previous incidents but all warnings have expired? We consider a recent case on the relevance of expired warnings.
Many employers will have had to deal with a member of staff who, over the course of time, is repeatedly disciplined for conduct issues, despite no single incident amounting to gross misconduct. If there is a current final written warning in place, dismissal for further misconduct will usually be fair (provided the final written warning is not 'manifestly inappropriate'). But what if there are no current warnings, despite a long history of warnings and misconduct?
In the recent case of Stratford v Auto Trail VR Ltd, the employer took the decision to dismiss, despite not considering the incident to be gross misconduct and the employee having no current warnings at the time. Somewhat surprisingly, the Employment Appeal Tribunal accepted the Employment Tribunal's finding that the dismissal had been fair.
In October 2014, Mr Stratford was seen with his mobile phone in his hand on the factory floor, which was strictly prohibited under the employee handbook. He was called to a disciplinary meeting at which he explained his reasons for using his phone. In the circumstances the Production Manager found that Mr Stratford's conduct was not gross misconduct, but merited a final written warning. However, Mr Stratford's disciplinary record consisted of 17 incidents, the last two of which were a 9 month warning for failing to make contact whilst off sick in December 2012, and a 3 month warning for using company machinery and preparing materials for personal purposes in January 2014. Despite neither of these warnings being current, the Production Manager came to the conclusion that Mr Stratford should be dismissed. He pointed to the fact that this was the 18th formal incident (and there had been many other informal conversations about his conduct), and that he did not believe Mr Stratford would learn from this incident. Mr Stratford submitted a claim for unfair dismissal.
The Employment Tribunal ruled that the decision to dismiss fell within the band of reasonable responses even though there were no current warnings on Mr Stratford's disciplinary record. It noted in particular that his disciplinary record had involved no less than 6 different managers. Mr Stratford appealed to the Employment Appeal Tribunal (EAT).
The EAT was asked to consider previous case law on the subject of expired warnings. The first, from the Scottish Court of Session in 2006 (Diosynth Ltd v Thomson), had held that it was unfair for an employer to put a time limit on a warning and then, when it had expired, still take it into account as a determining factor in deciding to dismiss. The second, from the Court of Appeal in 2008 (Airbus UK Ltd v Webb), had held that an employer could take into account previous similar conduct even where a warning had expired. A distinction was drawn in Airbus because the misconduct was in itself potentially gross misconduct, meriting summary dismissal. Mr Webb's recently-expired warning was taken into account in not reducing the penalty of dismissal to a final written warning for him, whereas his colleagues with a clean disciplinary record did benefit from such a reduction in sanction. The relevant question in the legislation was whether, in the circumstances, the employer acted reasonably or unreasonably in treating the reason as a sufficient reason for dismissing the employee, "determined in accordance with equity and the substantial merits of the case". It was held that this wide wording did not prevent expired warnings being taken into account in appropriate circumstances.
Because Airbus was a Court of Appeal decision, it was binding on the EAT in Stratford v Auto Trail VR Ltd, and it held that the ET had been entitled to conclude that Mr Stratford's dismissal was fair. It also noted that in this case there were many disciplinary incidents spanning Mr Stratford's entire employment, unlike, for example, the Diosynth case where there had just been one previous warning.
This is a very fine line for employers to tread. On the one hand, the general principle is clear: a decision to dismiss should not be based on an expired warning. On the other hand, the Court of Appeal has previously recognised that this is not an absolute requirement, as the wording in the Employment Rights Act 1996 gives a broader test.
Although not covered in the ACAS Code of Practice on Disciplinary and Grievance Procedures, the ACAS Guide on Disciplinary and Grievance Procedures deals with this point. It notes that warnings should cease to be 'live' after a specified period of satisfactory conduct but suggests that where there is a lapse soon afterwards (as in the Airbus case) or evidence of abuse, this could affect how long a subsequent warning may last (interestingly it doesn’t refer to the possibility of dismissal).
It is worthy of note that the Court of Appeal in Airbus indicated their approval that the employer had given itself sufficient flexibility in its disciplinary procedure to cater for exceptional circumstances such as those in Mr Webb's case (provided the rules were clearly drawn to the attention of employees). Employers should check that their disciplinary policies allow them some room for manoeuvre. If the policy states that an expired warning will never be taken into account, an employer could well find its hands tied where exceptional circumstances warrant a different approach. In addition, if an employee demonstrates a repeated pattern of misconduct offences that occur soon after the expiry of warnings, employers should consider carefully the length of any further (new) warnings that are issued.
Whether Stratford v. Auto Trail VR Ltd can be relied on will depend very much on the circumstances. It is significantly different from Airbus because, in Stratford, the employer stated that the incident in question was not 'gross misconduct'. If it was not, and there were no current warnings, was Mr Stratford aware that the disciplinary hearing could nevertheless result in his dismissal? The EAT judgment does not make this clear. There may be an argument that the EAT's decision could be overturned if it was appealed.
Part of the employer's reason to dismiss in this case was the view that the employee would not 'learn from the incident' as he had failed to learn so many times before. While the general principle remains – not to take expired warnings into account – it may be permissible in exceptional circumstances, perhaps where an employee repeatedly seems unable to maintain a clear disciplinary record. However, employers should ensure they take legal advice before relying on this case.