Background
Employees guilty of misconduct are normally issued with formal warnings, which remain ‘active’ for a particular period of time. The ACAS Code of Practice on Disciplinary and Grievance Procedures recommends that final warnings should normally have a time limit of 12 months.
In Airbus Ltd v Webb, a case which EEF handled, the Court of Appeal considered the question of whether an employer, when considering dismissal of an employee for misconduct, must, for all purposes and in all circumstances, ignore an employee’s previous conduct because a final written warning received for it has expired.
Facts
Mr Webb worked for Airbus Ltd as an aircraft fitter. The employer's disciplinary procedure provided that employees could be dismissed for gross misconduct. It listed as an example of such misconduct ‘theft or fraud or dishonesty involving the company, its employees, customers or visitors’. It also provided that in exceptional circumstances, where mitigating circumstances would render a dismissal inappropriate, a final warning might be substituted for dismissal.
In July 2004, Mr Webb was dismissed for fraudulent misuse of company time (he had been washing his car when he should have been working). When Mr Webb appealed, however, Airbus Ltd reduced his sanction to a final written warning, expressed to remain on his file for 12 months. When he was reinstated, he was sent a letter which stated that further misconduct was likely to lead to his dismissal.
In September 2005, three weeks after his original final written warning had expired, Mr Webb was discovered, alongside fellow employees, watching television at a time when he should have been working. Airbus Ltd found all of the employees guilty of gross misconduct.
Mr Webb was dismissed, but the others were not, because they had clean disciplinary records. In other words, on this occasion, they were ‘saved’ from dismissal in the same way that Mr Webb had been back in 2004. Mr Webb claimed unfair dismissal.
Employment tribunal’s decision
The employment tribunal held that it was reasonable for Airbus Ltd to have concluded that Mr Webb had been guilty of gross misconduct. It had then to decide whether dismissal was a reasonable sanction in all the circumstances. The tribunal concluded that, the expired warning apart, dismissal would have been a reasonable sanction.
However, it then went on to consider the decision in Diosynth v Thomson. In that case, the Court of Session (the Scottish equivalent of the Court of Appeal) held that a dismissal dependent on taking into account an expired warning must be treated as unfair. This, in the tribunal’s view, meant that Mr Webb's dismissal was therefore unfair. Airbus Ltd appealed to the Employment Appeal Tribunal (EAT).
The EAT’s decision
The EAT upheld the tribunal’s decision as it felt it too should follow Diosynth, even though, in practice, this meant limiting the range of potential factors a tribunal could consider when assessing the fairness of a dismissal. It said that the general thrust of the case law is that ‘where but for the expired warning the dismissal would not have occurred, that dismissal is unfair’. On behalf of Airbus Ltd, we appealed to the Court of Appeal.
Arguments before the Court of Appeal
In the Court of Appeal, we argued that the effect of Diosynth was that a tribunal must disregard an expired warning where taking it into account would tip a sanction short of dismissal into a dismissal.
It did not, however, oblige the tribunal to ignore the warning when the issue was whether a more lenient approach might be taken. Nor, we argued, did Diosynth lay down a hard and fast rule. The tribunal had to consider all the circumstances of the case in order to decide whether the dismissal was within the range of reasonable responses to the situation.
Court of Appeal decision
The Court of Appeal stated that the arguments on the point were finely balanced. On the one hand, if the employer chose to impose a time-limited final warning, it could be argued that it would be unfair to allow it to go back on that and to escape from the consequences of its decision to deal with an employee in that way.
On the other hand, if an employee had been previously disciplined for misconduct for which he could have been fairly dismissed, it could be argued that it is not necessarily unfair for the employer to take into account, on a later occasion of similar misconduct, the fact that employee had done this sort of thing before.
Having regard to the question of whether Airbus Ltd acted reasonably in dismissing the employee, the Court said that ‘there is no rule that the circumstance of the employee’s previous misconduct must be ignored by the employer, if the time-limited final warning had expired at the date of the subsequent misconduct, which was the reason, or principal reason, shown by the employer for the dismissal’.
The fact of the previous misconduct, the fact that a final warning was given in respect of it and the fact that the final warning had expired at the date of the later misconduct ‘would all be objective circumstances relevant to whether the employer acted reasonably or unreasonably’.
On Diosynth, the Court said that it was distinguishable as it was a case in which, but for the previous warning, the employer would not have shown a reason for dismissing the employee. As the warning had ceased to have effect, it was not reasonable for the employer to rely on it.
In the Airbus case, however, the misconduct on its own was shown to have been the reason for dismissal. The relevance of the previous misconduct and the expired warning went to the issue of whether dismissal of Mr Webb for the misconduct was within the range of reasonable responses. As such, Diosynth does not mean that a previous spent warning should be ignored for all purposes.
Airbus Ltd’s appeal was allowed.
Practical lessons
Where an employee’s conduct would warrant dismissal, employers can take into account prior misconduct, even though the warning for it has expired, when considering whether to impose a lesser sanction rather than dismissal. Employers should, however, be careful not to take expired disciplinary warnings into account in ‘totting up’ whether an employee has sufficient warnings to justify dismissal. If in doubt, call your Association.
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