13 January 2017

A recent Employment Appeal Tribunal (“EAT”) decision provides some welcome (and rare) good news for employers. The traditional position in relation to disciplinary action, clearly set out in the relevant authorities, is that an employer cannot rely on an expired disciplinary warning when deciding the penalty for a particular offence – the expired warning should be treated as never having existed.

That position was slightly relaxed some time ago by the 2008 Court of Appeal decision in Airbus Ltd v Webb. A number of employees committed an offence that would generally merit dismissal. In Mr Webb’s case he had an expired final warning for a similar offence, and on this latest occasion he was dismissed. The other employees did not have a previous warning and so the employer decided not to dismiss them. The Court of Appeal decided this was legitimate – an employer does not always need to ignore the fact that a previous warning exists. It would be wrong to use an expired warning to justify dismissal for an offence that does not in itself merit dismissal, but where the latest offence does merit dismissal in itself, then the expired warning could be a valid reason for not deciding to impose a lesser sentence. The other staff who were not dismissed were given a “first chance” because, although the offence merited dismissal, it was a first offence. Mr Webb had already been given his “first chance” previously (the final warning) so there was no need to do so again.

This approach is reflected in the ACAS Guide which states that “A decision to dismiss should not be based on an expired warning, but the fact that there is an expired warning may explain why the employer does not substitute a lesser sanction”.

The recent EAT decision in Stratford v Auto Trail VR Ltd further weakens the general principle that expired warnings should not be relied on.

An employee was being disciplined for his 18th disciplinary offence, offences which covered the entire period of his employment. There were no live warnings, as a final warning had recently expired. The employer frankly accepted when issuing the outcome to the employee, that the latest offence did not in itself justify dismissal. Nevertheless the employer was concerned about the history of offences, the employee’s failure to recognise the seriousness of his actions, and the near-inevitability of further offences being committed in the future. The employer dismissed the employee (with notice).

The EAT upheld the employment tribunal’s finding that this was a fair dismissal. Despite the fact that the employer used the existence of expired warnings to elevate a non-dismissal offence into a dismissal (going beyond the situation in the Airbus case), this was legitimate. The history of misconduct and the likelihood of repetition were part of the overall circumstances to be taken into account in deciding whether the dismissal was fair.

This is good news for employers, many of whom will be familiar with the scenario of the employee who has a pattern of offending, waiting for warnings to expire before offending again. The Stratford decision will potentially assist employers who find themselves in this situation. However it is important not to see this as carte blanche to take account of expired warnings. The facts of this case are exceptional, given the significant history of misconduct, and in most situations it will remain the case that expired warnings should be ignored. Employers will also need to be aware of what their own policies say on this issue. Expert advice should, as ever, be obtained.

Contact Laura Salmond, Partner, lis@bto.co.uk, T: 0141 221 8012