Mark Shulman*, Consultant Solicitor at Keystone Law
*
**UNFAIR DISMISSAL
Misconduct – expired warnings
*Can an expired warning be taken into account as part of the overall circumstances when an ET is considering whether a dismissal was fair or unfair? Yes, said the EAT in [Stratford v Auto Trail VR Ltd]()* UKEAT/0116/16/JOJ.

Background
The Claimant had "a poor disciplinary record". Warnings from two previous disciplinary matters had expired when he was dismissed after his 18th disciplinary offence. This latest offence was when he had been seen with his mobile phone on the shop floor - conduct which the employee handbook described as "strictly prohibited". At the disciplinary hearing, the Production Manager accepted the reasons for the Claimant having his mobile phone on him and decided that the circumstances did not amount to gross misconduct. However, the Production Manager also decided that in light of the fact that this was the 18th disciplinary hearing, the Claimant had "been given every chance" and further misconduct was likely to occur and so his employment was terminated with pay in lieu of notice.

The ET found his dismissal to be fair on the basis that "It is absolutely plain that [the Claimant's] disciplinary record and the belief that as a consequence of that record [the Claimant] would not improve were the reasons why [the employer] decided to dismiss".

The Claimant's appeal to the EAT was based on the argument that where an employee is guilty of misconduct (but not gross misconduct) which did not justify dismissal, it was not reasonable for the employer to take account of earlier misconduct where any previous warnings had expired (relying on the Inner Court of Session decision in Diosynth Ltd v Thomson. Therefore, it was argued, the ET erred in law by concluding that it was reasonable for the employer to rely upon the Claimant's previous disciplinary record as the principal reason for the dismissal.

Previous record relevant
The EAT disagreed. Referring to the Court of Appeal decision in Airbus UK Ltd v Webb [2008] IRLR 309, Mummery LJ had said that he was "persuaded that it is open to a tribunal to find that a dismissal for misconduct is fair, even though the employer…has taken account of the employee's previous similar misconduct, which was the subject of an expired final warning". 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.

Accordingly, there was no error of law by the ET in the present case. The ET had been entitled to take account of the Claimant's disciplinary record, the index offence and the manager's prediction as to how the future was going to go if the Claimant was not dismissed. In any event, Diosynth could be distinguished in that the Claimant's disciplinary record was very different: it was longer, there were many more incidents and they covered the entire period of the Claimant's employment, with some incidents involving no formal action and no warnings to expire. Diosynth concerned just one previous warning (which had expired) and which was described as "tipping the balance", rather than being looked at as part of a whole record leading to dismissal.

The ET's decision was upheld and the Claimant was therefore not unfairly dismissed.

Validity of previous warnings
In [Perry's Motor Sales Ltd v Edwards ]()UKEAT/0061/16/DA, the EAT decided that an ET had been wrong to look into the validity of a previous warning which had not been challenged by the Claimant; the ET had also applied the wrong test when considering the issue of the warning's validity.

Background
The Claimant was the Service Manager in a franchised Vauxhall dealership and had 20 years' service. He was given a first and final written warning having been found guilty of issues relating to company invoices. This was considered by the company to be "a fraudulent act on your behalf and a breach in trust". The Claimant did not appeal the warning.

Some months later the Claimant was involved in altering the date on work which had been completed for a faulty gearbox under a warranty claim for a used car sold by the dealership. This was to enable a claim for 80% of the repair costs to be claimed from Vauxhall and could only be made if the claim was submitted within a certain period after completion of the work. The Claimant had changed the date of the work so as to bring the claim within time.

The employer took the view that because the issues were so similar to those for which the Claimant had previously been given a final written warning, he should be dismissed.

The ET found the dismissal was unfair as the sanction of the previous final written warning fell outside the range of reasonable responses. Furthermore, the dismissal fell outside the band of reasonable responses as the Claimant had not been provided with promised training and support on the applicable operating procedures and more generally, he had been put under pressure and denied the help he had sought, although he had contributed to his dismissal by 50 per cent. The employer appealed.

*Earlier warning
*It was accepted at the appeal that a dismissal did not automatically fall within the range of reasonable responses purely because there was a finding of gross misconduct. The test is not a contractual one but one of fairness, as laid down by section 98(4) ERA 1996 and mitigating circumstances may mean that it falls outside that range (see per Langstaff P in Brito-Babapulle v Ealing Hospital NHS Trust .

Validity of final warning
Had the ET been right to investigate the validity of the previous warning? No, said the EAT. There was no dispute that a final written warning had been issued and was still extant at the time of the subsequent matters that had led to the dismissal itself. The Claimant had not appealed against that warning and had accepted himself as bound by it.

Whilst no issue had been raised either as to the validity of the final warning or the employer's ability to rely on it when subsequently taking the decision to dismiss, the ET had then taken it upon itself to look behind the warning, making findings as to what it really related to and whether therefore the penalty had fallen within the permissible range. That was an error of law because the ET was engaged in determining a point that had not been in issue before it.

Wrong test
Secondly, the ET then applied the wrong test, asking itself whether the warning had fallen within the range of reasonable responses, whereas the correct test was whether it had been issued for an "oblique motive" or was "manifestly inappropriate" (see Wincanton Group plc v Stone.

The effect was that the ET had therefore failed to consider the fairness of the dismissal against the existence of a valid final written warning. The case was remitted to a different ET for matters to be considered afresh as it did not inevitably follow that the dismissal was fair - mitigating circumstances might take a dismissal outside the range of reasonable responses.

Gross misconduct
Had it been right to summarily dismiss an employee for actions described as gross misconduct under the employer's disciplinary procedure? The EAT thought not in [Arnold Clark Automobiles Ltd v Spoor ]()UKEAT/0170/16/DA, stating that all of the surrounding circumstances should have been taken into account, even if there was gross misconduct.

Background
The Claimant was involved in an incident with another colleague in the print room. He allegedly grabbed a colleague by the neck, but when interviewed, the Claimant said that he may have caught his colleague's throat, but "did not have him by the throat" and he had apologised to the colleague. Management decided not to proceed with any formal disciplinary action (describing the incident as "handbags" - a local colloquialism in Newcastle-upon-Tyne for a petty and insignificant disagreement) and intended to issue the Claimant with a "letter of concern" under the informal section of the disciplinary procedure.

However, when the incident came to the attention of the employer's HR Department, it was decided that a formal disciplinary hearing was required. Such a hearing was carried out after which the Claimant was summarily dismissed in the light of the employer's "zero tolerance policy" towards physical violence and without taking into account the Claimant's 42 years of exemplary service. No assessment was made as to the level or degree of physical violence. The Claimant's internal appeal against dismissal was dismissed, the employer again referring to "physical violence which is listed in the company disciplinary procedure as an issue of gross misconduct".

The Claimant won his claim of unfair dismissal. The ET found that the investigation undertaken by the employer was not one that could be said to be within the range of reasonable responses open to a reasonable employer in all the circumstances. Further, the ET found that no reasonable employer would have dismissed the Claimant having proper regard to all of the circumstances including his previous record, but the Claimant had contributed to his own dismissal to the extent of 50 per cent. The employer appealed.

Was the violence "gross misconduct"?
One of the employer's grounds of appeal to the EAT was that it was not clear whether the ET had accepted that the physical violence in the particular case actually amounted to gross misconduct. The EAT agreed this was unclear from the ET's decision and by agreement with the employer, the EAT went on to dispose of the appeal itself, rather than remit the matter to an ET.

The EAT's view was that the Claimant's physical violence did amount to gross misconduct under the disciplinary procedure. However, the employer had proceeded on the basis that gross misconduct necessarily required summary dismissal. In fact, there was no evidence that the employer operated a zero-tolerance policy in relation to physical violence and its disciplinary procedure was expressly stated in terms to the contrary. Whilst the disciplinary procedure stated that "You will normally be dismissed with immediate effect and without notice or payment in lieu of notice in cases of gross misconduct" (emphasis added), this clearly showed there was a discretion to be exercised. The employer had been wrong in not having regard to all of the circumstances, including the Claimant's exemplary record of over 42 years' service.

The EAT was satisfied in the light of the ET's unchallenged findings the Claimant's dismissal was unfair and the employer's appeal was dismissed.

Mark Shulman is a Consultant Solicitor with Keystone Law and an accredited workplace and employment mediator. His blog on new employment legislation can be found here.