In Way v Spectrum Property Care Ltd  EWCA Civ 381 the Court of Appeal considered whether an employer would be acting reasonably in taking into account a final warning given in bad faith, when deciding whether the employee's conduct was sufficient reason for dismissal.
Mr Way was a recruitment manager with Spectrum Property Care Ltd (Spectrum). He had been employed by them for over 13 years before being dismissed for misconduct in December 2011.
A series of events led to Mr Way's dismissal, starting in July 2010. At this point, Mr Way sent an email to his line manager that was considered inappropriate and not in line with Spectrum's policies and procedures. In December 2010 Mr Way was given a final written warning in relation to an inappropriate appointment. The outcome letter sent to him stated that he should ensure he was fully familiar with Spectrum's policies and procedures.
In December 2010 and February 2011, Mr Way sent another series of inappropriate emails to his line manager. Later, in mid-2011, Spectrum sent an email to all staff reminding them of the computer usage policy and the need to adhere to it. It stated that it was investigating Mr Way's emails. The email that Mr Way had sent in July 2010 was discovered and, because Mr Way was already on a final warning, disciplinary action was taken against him. Mr Way was informed that, if the allegations were proven, the panel would take into account his final warning.
At his disciplinary hearing, Mr Way highlighted that the email in July 2010 was sent before his final warning in December 2010. Further investigation uncovered additional inappropriate emails Mr Way had sent after his final warning.
The disciplinary panel concluded that the emails sent after December 2010 were sufficiently serious and that, as Mr Way had conveyed he did not appreciate the seriousness of those emails in the context of Spectrum's policies, he should be dismissed. His subsequent appeal was dismissed. He brought a claim for unfair dismissal.
Employment tribunal decision
The employment tribunal (ET) found that a reasonable investigation had taken place and that the process was fair and reasonable. The fact that there was a final written warning, even though for a different type of offence, which warned Mr Way that any further misconduct could be taken into account, entitled the panel to dismiss him and this was within the band of reasonable responses. Mr Way appealed.
The EAT considered whether the ET had addressed Mr Way's assertion that the final written warning had been given in bad faith.
Mr Way asserted that the manager who gave him his final written warning was trying to cover up his own involvement in the matter and had indicated to Mr Way before the hearing that the outcome would be a final warning. Mr Way also alleged that he was told by the managing director of Spectrum not to appeal against the warning, as it could be escalated to a dismissal.
The EAT held that the ET should have allowed this evidence and ought to have investigated the issues raised by Mr Way. The EAT proceeded on the assumption that Mr Way had proved bad faith and reconsidered the issue at hand. It held that, even though the warning may have been issued in bad faith, Spectrum was entitled to have regard to that warning. Consequently, given that warning, dismissal inevitably followed and there was no question as to fairness. Mr Way appealed again.
Court of Appeal decision
The Court of Appeal considered whether the EAT had erred in law by concluding that a warning given in bad faith was nonetheless valid and could be relied on by Spectrum.
The Court referred to case law indicating that an employer could rely on final warnings where they were given in good faith. Consequently, it concluded that a warning given in bad faith is not to be taken into account in circumstances such as this in deciding whether there was sufficient reason to dismiss an employee.
The Court went on to say that, even if Spectrum believed the warning was not issued in bad faith (as Spectrum stated at Mr Way's disciplinary appeal hearing), the fairness of the dismissal could not turn on the reasonableness of that decision.
The case was remitted to a fresh ET to determine if Mr Way had been unfairly dismissed.
This decision highlights the fact that tribunals will look back at previous warnings and whether they were given in good or bad faith. A tribunal should not look behind a warning where it was given in good faith. However, if there are indications to suggest that the warning was inappropriate, the tribunal will take this into account when considering reasonableness.
Therefore, when relying on a final warning given previously in order to justify a dismissal, employers should ensure that the warning was not given in bad faith, inparticular where an employee has already raised concerns about the fairness of that warning.