In McMillan v Airedale NHS Foundation Trust the Court of Appeal considered whether an employer could increase a sanction on appeal in a disciplinary process.  It concluded that as an employee’s right to appeal against a disciplinary sanction is conferred for their benefit, an increase in sanction would only be appropriate if the terms of the employment contract expressly allowed it.


Miss McMillan was issued with a final written warning under her employer’s internal contractual disciplinary procedure.  She appealed against the sanction to an internal appeal panel which both upheld the complaint following a rehearing and then took steps to reconvene to consider the appropriate sanction. 

Miss McMillan firstly purported to withdraw her appeal and then commenced legal proceedings for an injunction to prevent the employer from reconvening the hearing to consider the sanction. 

The key issue in the Court of Appeal was whether the appeal panel was permitted under Miss McMillan’s employment contract to impose a sanction which was more severe than the final written warning imposed by the first panel, and in particular whether it could terminate her employment.


The Court of Appeal stated that the starting point had to be the proper construction of the employment contract against the relevant background, which included the the Acas code of practice, the Acas guide and the employer’s own disciplinary code. 

Emphasis was placed on the authoritative guidance given in the Acas guide as part of the admissible factual matrix for construing the contract.  The guidance expressly states that an appeal should not result in an increase in penalty as this may deter individuals from appealing. 

The Court of Appeal was also mindful of the fact that an increase in a sanction would not have been subject to a right of appeal in the circumstances, which could lead employers to behave capriciously. 

It concluded that properly construed Miss McMillan’s employment contract provided her with an appeal which could not result in an increase in sanction - the imposition of an increased sanction on appeal would amount to a breach of her employment contract.

Although the judgment is clear that there could be no implied power to increase the sanction, irrespective of the appeal taking place by a rehearing, Underhill L.J. did accept that there was nothing wrong in principle for an employer to reserve the express power to increase sanctions on appeal. 

Implications for Employers

Employers should be wary of seeking to increase disciplinary sanctions at the appeal stage unless their contractual disciplinary and appeals procedures expressly and explicitly confer the right to do so. 

Should employers consider that it may be valuable to reserve such a right and that it is appropriate for their organisation to do so, it is worth reviewing the content of any current contractual disciplinary and appeals procedures and considering whether and how they may be varied to include an express power to increase a sanction on appeal. 

If so, we would also suggest including a right to appeal against such an increased sanction – so an additional stage of appeal but confined to the determination of the sanction alone - as that will help manage assertions that the absence of such an appeal would increase the prospect of a dismissal being viewed as substantively unfair.