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3 February 2017

Can an employer rely on expired written warnings?

In Stratford v Auto Trail VR Ltd UKEAT/0116/16 the Employment Appeals Tribunal considered whether an employer taking account of a history of expired warnings meant that the employee's dismissal was unfair.

Facts

Mr S started work for Auto Trail in November 2001. As of January 2014 he had received 17 individual warnings for various infractions, the most recent two being a nine-month warning for failing to make contact while off sick and a three-month warning for using company machinery and time to prepare materials for personal purposes. Importantly however, there were no live warnings on Mr S’s file when the events that led to his dismissal occurred, as the recent final written warning had expired.

On 15 October 2014, Mr S was seen with his mobile phone whilst on the shop floor. This was “strictly prohibited” by Auto Trail’s employee handbook. Following the proceeding disciplinary hearing, the production manager decided to dismiss Mr S with 12 weeks’ pay in lieu of notice.

In the letter, which outlined his reasoning, the production manager noted that the offence was not one of gross misconduct and would normally attract a final written warning. Crucially though, he stated the following:

“‘In addition to many informal conversations, this was the eighteenth time that [Mr S’s] behaviour had been the subject of formal action […] There was no reason to believe that there would not be a similar conversation in the near future. While [Mr S’s] actions may not always be intentional, he did not understand their consequences and it was not believed that this would change”

After his internal appeal was unsuccessful, Mr S claimed unfair dismissal.

Employment Tribunal

The tribunal rejected the claim. The judge held that Mr S had been dismissed by reason of conduct consisting of his disciplinary history and, as expressed in the production manager’s letter, Auto Trail seeing no reason to believe that this trend of poor behaviour would change. Auto Trail had been entitled to have regard to Mr S’s disciplinary record and his attitude to discipline in general and had been entitled to decide that enough was enough. In those circumstances, the dismissal was fair.

Mr S appealed.

Employment Appeals Tribunal

The EAT dismissed the appeal and upheld the tribunal’s decision that Mr S was fairly dismissed in all the circumstances. The fact of previous misconduct, that a final warning had been given in respect of it and that the final warning had expired at the date of the later misconduct would all be objective circumstances relevant to, but not determinative of, the question of whether the employer acted reasonably or unreasonably.

According to the EAT, expired warning does not mean that the earlier misconduct in itself is irrelevant. There is a broad range of circumstances which employers can take into account and, rather than strictly looking at the expiry of the final written warning, the employer could consider the overall pattern of conduct.

A distinction was drawn between using expired warnings to elevate conduct into a dismissible offence (which was impermissible) and having regard to the previous conduct, regardless of the fact that it was the subject of an expired warning, when deciding on sanction for a dismissible offence (which was permissible).

On this basis, the employer had been entitled to take into account the employee’s previous record and the manager’s prediction as to how the future was going to go when making its decision.

Comment

In this case the court clearly struggled with the concept that an employer, when considering dismissal of an employee for misconduct, should be forced to ignore an employee’s previous misconduct because a final written warning for it had expired. The employee’s right to be treated fairly must be carefully balanced against the employer’s right to remove members of staff for repeated bad behaviour. This means the fairness of relying on previous expired warnings will always depend on the facts and circumstances of each individual case. This raises the question in what circumstances and for what purposes can expired warnings be taken into account?

There is a very subtle distinction in that it will still be unreasonable for an employer to rely on an expired warning as the principal reason for dismissal, but, it may not be unreasonable for an employer to take into account previous expired warnings and the underlying misconduct in circumstances where these are not the principal reason for the dismissal.

In practice, falling on the right side of this seemingly artificial distinction may be difficult. Employers should be certain that they can justify why they believe the presence of previous expired warnings is relevant and if not, take advice on the issue.

This case also highlights the need for carefully drafted disciplinary policies which anticipate exceptional circumstances when dealing with “repeat offenders”. Employers should take time to tailor written warnings to each situation having regard for the previous number of warnings an employee has received. The ACAS Code indicates that although final warnings should normally have a time limit of 12 months, that need not always be so; adopting a ‘one-size-fits-all’ approach can lead to situations similar to those demonstrated in this case. If the employer feels that the misconduct justifies it, it can consider imposing a longer penalty. This may save the employer from needing to rely on expired warnings in the future. Employers are encouraged to seek legal advice if they are uncertain on when to increase or decrease a sanction for misconduct.

Case

Stratford v Auto Trail VR Ltd UKEAT/0116/16, 31 October 2016. (Bailii)   If you want to know more about the impact of this case, or have any employment issues you wish to discuss, get in touch.

This article is for general guidance only. It is not to be relied upon and professional advice should always be taken on specific circumstances.