The Court of Appeal has held that employers must not take into account a previous warning given in bad faith when deciding whether to dismiss an employee.
In the case of Way v Spectrum Property Care Limited (2015) Mr Way was one of a number of employees who had sent inappropriate emails at work. Although others received final written warnings, Mr Way was already subject to a live final written warning relating to previous unrelated misconduct. Spectrum therefore decided to dismiss him.
Mr Way brought a claim for unfair dismissal in the employment tribunal. He claimed that Spectrum did not behave reasonably in dismissing him because in doing so they relied on the previous final written warning and he alleged this had been given in bad faith. Despite this, the Employment Tribunal and the Employment Appeal Tribunal both found that the dismissal was fair. Mr Way appealed.
The Court of Appeal upheld Mr Way’s appeal. It quoted with approval previous case law which stated that it was legitimate for an employer to rely on a final warning when deciding to dismiss for a further offence, provided that:
• the final warning was issued in good faith,
• there were, at least on the face of it, grounds for imposing that warning; and
• it was not manifestly inappropriate to issue that warning.
The Court said that in this case, Spectrum would not be acting reasonably in taking into account a warning given in bad faith when deciding whether the employee’s conduct was sufficient reason for dismissal.
When considering Mr Way’s appeal against the dismissal, Spectrum had reviewed the earlier warning and had concluded that it was not given in bad faith. The court held that it was irrelevant whether this finding was reasonable or not and that if in fact the warning was issued in bad faith, Spectrum could not rely on it.
The Court remitted the case to the Employment Tribunal to decide whether the final warning was given in bad faith.
It was accepted in this case that there may be circumstances in which a dismissal may be fair despite a previous warning being invalid. This would be the case where the employee is guilty of gross misconduct which itself justifies dismissal, notwithstanding the previous warning. In this case, the final act of misconduct, by itself, only warranted a final written warning, so this principle could not apply to this case.
This case creates potential difficulties for employers. They cannot without question rely on a previous warning to justify dismissal if the misconduct at the time does not justify dismissal by itself. If the employee challenges earlier warnings at the Employment Tribunal, the Tribunal will be bound to consider if such warnings were given in good faith, whether there were grounds for imposing them and whether they were manifestly inappropriate or not.
Employers should ensure that the rationale behind all disciplinary sanctions is documented to create a strong evidential base in case the decision is challenged in future. Further, dismissing officers should ideally satisfy themselves that any previous warning that they are relying on was validly given. If the employee raises this issue, it should certainly be reviewed in detail.