Most employers are aware of the need to tick all the relevant procedural boxes when it comes to taking a decision to dismiss – but how confident are you that your managers apply the same rigorous approach when issuing final written warnings? Two recent cases highlight the importance of ensuring that such warnings are issued fairly if you want to be able to rely on them to justify a subsequent dismissal.

As a general rule, Tribunals will not go back and look behind any final written warning relied upon by the employer when taking the decision to dismiss. Provided the warning was not clearly issued inappropriately, they will usually regard it as valid to support any subsequent dismissal. The cases outlined in this month’s Review make it clear nonetheless that Tribunals can re-examine an earlier final written warning if there is any suggestion it was issued inappropriately, even if the employee did not challenge it at the time.

In Davies v Sandwell Metropolitan Borough Council D was a teacher. Following allegations of inappropriate conduct made by pupils, she was issued with a final written warning in 2005. She appealed, claiming that the disciplinary panel had acted unfairly in not taking into account certain evidence put forward by her which, she said, undermined their allegations. The Council said it had not done so because D had failed to comply with the requirement in its disciplinary policy that evidence be presented at least seven days before the disciplinary hearing. Initially the appeal hearing was proposed to be by way of a review, but D argued that it should take the form of a re-hearing to enable the panel to consider the new evidence. The Council eventually agreed to her request, but by then D and her trade union representative had become suspicious about the Council’s motives (her trade union representative had warned her that a re-hearing would give the Council the ability to impose a higher penalty, i.e. dismissal) and D decided not to press her appeal.  

In 2006 after new allegations of misconduct she was dismissed. The Council took into account that she had the 2005 final written warning still live on her record and that she had abandoned her appeal against it, and relied on this when it took the decision to dismiss her. D brought unfair dismissal proceedings, but the Tribunal dismissed her claim, saying that as she had not seen through her appeal, the Council was entitled to treat the final written warning as issued in good faith and on reasonable grounds, and so to rely upon it in 2006. As such, its decision to dismiss fell within the band of reasonable responses.  

The EAT has now overturned this decision, saying that D’s failure to continue with the appeal did not by itself mean that the final written warning could be taken at face value. It said that the Tribunal was entitled to look behind that warning in light of the procedural defects in the 2005 hearing, particularly the exclusion of potentially relevant evidence.  

This means that employers cannot assume that an employee’s failure to appeal against a final written warning will automatically be the end of the matter. Furthermore, it emphasises the importance of following a fair procedure when issuing warnings. This will almost never include the exclusion of relevant evidence on self-imposed time limit grounds alone, as here. It may normally be tempting to think that any procedural irregularities can be overlooked if a sanction other than dismissal is being imposed (especially as there is little free-standing remedy for the imposition of an unjustified warning), and generally that would be right. Two factors made this a special case. The first was the EAT’s conclusion that the evidence which D was prevented from adducing was pretty persuasive in her favour. It is hard to see its having taken the same view had the defect been merely procedural or the “missing” evidence less determinative. Second, while many disciplinary procedures allow for the sanction to be revisited upwards on appeal, the Council’s attitude and approach to D gave her representative better than usual reason to see that as a real risk, making D’s decision not to pursue her appeal entirely understandable.  

The ability of Tribunals to look behind final written warnings was also examined in Sakharkar v Northern Foods Grocery Group Ltd t/a Fox’s Biscuits, but this time in the context of an absence dismissal. S had a poor attendance record and in May 2008 he was issued with a final warning under Northern Foods’ absence management procedure. S had a number of further absences and he was therefore dismissed. His appeal against dismissal was unsuccessful and he brought a claim of unfair dismissal.

It only subsequently transpired that S should never have been issued with the final warning in the first place because one of the absences relied upon fell outside the relevant review period in the sickness management procedure. Nobody, including S and his Trade Union representative, had spotted this at the time the warning was issued and it had not been picked up either at the dismissal stage or during his appeal. Northern Foods maintained that S’s dismissal was fair because at the time it took the decision to dismiss it had a genuine (albeit mistaken) belief that S had breached the absence management procedure and had a live final warning against him. The Tribunal agreed, although accepted that its decision was harsh in its effect.

The key question for the EAT was whether Northern Foods had acted reasonably in taking the decision to dismiss, bearing in mind that the final warning should not have been issued and that, but for its mistake, S would not have been dismissed (at that point, at any rate). The EAT referred to the statutory test for determining the fairness of a dismissal in s.98(4) of the Employment Rights Act 1996. This says that fairness will depend on whether, in the circumstances “including the size and administrative resources of the employer’s undertaking”, the employer had acted reasonably in treating the reason for dismissal as a sufficient reason for dismissal. That Northern Foods had made a genuine mistake was relevant to the question of whether it had acted reasonably, but it was not conclusive. In line with its reasoning in Davies above, the EAT said that the Tribunal was not obliged to take the final written warning at face value and that if it had applied the statutory test correctly it would have found that the decision to dismiss was unreasonable in the circumstances.

Northern Foods’ “administrative resources” were key to this finding of unfairness. It had an HR team with express responsibility for ensuring that the absence management procedure was applied correctly. Its own policy said that HR was responsible for “auditing absence levels and providing advice, support and training to line managers”. The policy also said that a member of HR would be present at all final review and dismissal stages. In light of this, said the EAT, HR should have picked up on the mistake. If it had done so then S would not have been issued with a final warning and would not have been dismissed. In other words, it was all HR’s fault, a decision to warm the cockles of the dismissing manager’s heart, no doubt!

The EAT’s decision could be said to be as harsh on Northern Foods as was the Tribunal’s on S. After all, the dismissal was effected in good faith on grounds which would otherwise have made it fair. Again, the saving grace for employers is probably that the error here so clearly made the final warning unsafe – if there had been a less rigid sickness management procedure, the defect could not so easily be said to have made the difference. Genuine mistakes as to more peripheral issues are most unlikely to lead to the same outcome.