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 they should have been working. Airbus Ltd found all of those 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 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. Mr Webb argued that it was not - his colleagues had not been dismissed and the only reason for his own dismissal was because Airbus Ltd had taken into account his previous, expired, warning.
The tribunal considered whether, the expired warning apart, dismissal would have been a reasonable sanction. It unanimously concluded that it would have been.
It then went on to consider the Scottish 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. The main distinguishing factor in Diosynth was that, in that case, the employer had made it clear that, but for the previous misconduct upon which his expired disciplinary warning was based, the employee would not have been dismissed. While the tribunal found, by a majority, the dismissal fair, the EAT and Court of Session held that the expired warning should not have been taken into account.
In Webb, two of the three tribunal members thought Diosynth must be followed and therefore found Mr Webb's dismissal unfair. Airbus Ltd appealed.
Arguments before the EAT
In the EAT, Airbus Ltd 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 in connection with a dismissible offence. Nor, it argued, did Diosynth lay down a hard and fast rule.
By contrast, Mr Webb argued that Diosynth was clear and that if an employer indicates that a warning and its underlying conduct should have a limited, finite, life it would be unjust to later rely on it. He relied also on the ACAS Code, which provides that final warnings should normally have a time limit, which it suggests should be 12 months - this implies that if employers wish to make exceptions then they can do so.
EAT judgment
The EAT sympathised with Airbus Ltd in that Mr Webb had been fortunate to get away with a final warning back in 2004 and had gone on to commit a very similar act of gross misconduct which would have justified his dismissal independently of the warning. However, it felt it 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’.
Airbus Ltd is appealing the EAT’s judgment in the Court of Appeal.
Practical lessons
In the meantime, this means that employers must not take expired disciplinary warnings into account.
The EAT judgment does, however, offer some guidance for employers. It stated that "the employer can always give himself greater room for manoeuvre by drafting the procedural rules to cater for exceptional circumstances . . . perhaps the lesson for employers is to take care when giving warnings, particularly final warnings, to tailor them to the particular circumstances . . . [Although] . . . the ACAS Code indicates that . . . final warnings should normally have a time limit of 12 months, that need not always be so.
There is in our view no reason why it should not be longer if the nature of the misconduct justifies it, and in particular if the imposition of a lesser penalty is an act of leniency. An employer might also be justified in extending the period of the warning with respect to a later act of gross misconduct which is the same or substantially the same as that for which the earlier final warning was given".
Member companies grappling with how to draft or amend their disciplinary procedures, trying to decide whether it might be appropriate to impose a final warning over and above a twelve month period, or thinking about how to word their final written warnings, should contact their associations for advice.