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Bad faith final warning means dismissal may be unfair

In the Court of Appeal case of Way Vs Spectrum Property Care Ltd, a final warning given in ‘bad faith’ and later relied on to dismiss an employee for a subsequent unrelated offence proved fatal to the employer’s defence. The warning and the circumstances around (including the fact that Way was told if he didn’t accept it, it might be escalated to a dismissal on appeal) were held to be significant – had the warning not have been present he would not have been dismissed for the subsequent offence. As a result the Court of Appeal overruled the Employment Appeal Tribunal and instructed the original tribunal to reconsider the case, this time carefully considering the validity of the final warning in addition to the dismissal itself.

Almost all disciplinary procedures provide an escalating scale of warnings before dismissal with notice results (though dismissal without notice can be fair if the single offence is one of gross misconduct.) In this case Way was given a final warning for inappropriate recruitment activity – allegedly he ‘helped’ a friend’s son to gain employment with the Company improperly. While being given a final warning Way was told to go and familiarise himself with Company procedures and ensure he stuck by them in the future. Later he and a number of other employees were identified as having sent inappropriate material (including sex images) inside and outside of the company, contrary to policy. The discovered offences fell into 3 bands, band 3 was serious enough to be regarded as gross misconduct and therefore dismissal, band 2 was a final warning, band 1 a written warning. Way was in band 2, but because he was already on a final warning, was dismissed.

Following his dismissal Way complained that the final warning was given in bad faith because a Director of the business had also been involved in the dodgy recruitment, and Way had been told to keep his mouth shut and not appeal so as not to create waves. That other Director was connected to his eventual dismissal. At the time of the final warning Way was told that if he did appeal he would probably be dismissed. Although his employer disputed some of these facts the Court of Appeal decided that on the balance of evidence before it the earlier final warning could have been given in bad faith, and if it had been, Way would have been unfairly dismissed. The Court also commented that the reason for dismissal (sending inappropriate images) was completely different to the reasons for his final warning (recruitment irregularities) and the fact that both happened to be covered by an internal policy was not relevant enough so as to necessarily warrant an escalation to dismissal.

The moral of the story is that employers must treat final warnings with as much seriousness as the dismissal itself – a lack of a proper investigation or a desire to scupper an employees’ right of appeal at the penultimate stage of the disciplinary procedure is likely to be as damaging as errors in the dismissal process. Dismissals that follow a final warning given in bad faith or dismissals for completely unrelated reasons to an employee’s previous final warning should be carefully considered – a better response may have been to have issued Way with another final warning to run concurrently with his first one.

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