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Lapsed disciplinary warnings and dismissal: a new approach

Everyone knows that it is always impermissible to take a lapsed warning into account when deciding whether to dismiss an employee. According to both the Court of Appeal and the Employment Appeal Tribunal, “everyone” is wrong.

As set out in Stratford v Auto Trail VR Ltd UKEAT/0116/16, the position is actually far more nuanced than might be imagined. While it is certainly not permissible for an employer to rely on the existence of a lapsed warning to dismiss in all cases, it must always be remembered that the test of fairness set out at section 98(4) of the Employment Rights Act 1996 relates to whether the employer acted reasonably or unreasonably, and to the equity and substantial merits of the case. The fact of previous misconduct, the fact that a warning was given in respect of it, and the fact that it has lapsed, are all objective circumstances which the employer may be entitled to take into account.

The decision in Stratford relied heavily on the reasoning in Airbus Ltd v Webb [2008] EWCA Civ 49, in which a lapsed warning had also been taken into account when an employer decided to dismiss. Distinguishing an earlier Scottish authority (Diosynth Ltd v Thomson [2006] IRLR 284), it was held that where the facts outside of the lapsed warning were sufficient to justify dismissal, such a lapsed warning could be taken into account when deciding on the penalty to impose. If the other factors taken together would not justify dismissal, however, a lapsed warning cannot “tip the balance”.

A cynic might suggest that the fact patterns in Stratford and Airbus were paramount in the appellate judges’ minds when making these decisions. In Stratford, the dismissal incident was the eighteenth time in thirteen years that the employee’s behaviour had been the subject of formal action, and the behaviour leading to his dismissal had been clearly prohibited by the employer. In Airbus, the employee had been the subject of a final written warning which had expired only three weeks before the dismissing incident (and which had itself been reduced from summary dismissal), and the dismissing incident itself was clearly a serious one (leaving work without permission). The employee in that case was explicitly described as having committed an act of gross misconduct. In contrast, the employee in Diosynth did not commit an offence capable of being described as gross misconduct by itself, but the lapsed warning was seen as “tipping the balance” towards dismissal. This is still impermissible.

Where, then, do such legal niceties leave HR departments? Craving certainty, no doubt, but there appears little of that to be had from these three decisions. Rather, the judgment will always be one of whether (as always) the employer has acted reasonably or unreasonably in all the circumstances. Nevertheless, there are a number of actions which hard-pressed HR advisors can take to enhance the chances of a good result in an employment tribunal:

  • Ensuring that dismissal and appeal managers are aware of the difference between taking a lapsed warning into account when deciding whether to dismiss for an already dismissible offence, and taking it into account to “elevate” a previously minor infraction into a dismissal offence. The latter is almost certain to create trouble.
  • Ensuring that staff handbooks and any disciplinary policies set out in clear terms that, while a written warning might lapse after a certain period of time, it may still be taken into account as part of the background circumstances of any disciplinary proceedings in the future.
  • Ensuring that any warning procedures are flexible enough that they can be tailored to the particular circumstances of the case, as suggested by Elias J at paragraph 61 of the Employment Appeal Tribunal’s decision in Airbus, approved by the Court of Appeal. For example, warnings do not always need to have a time limit of 12 months. If the nature of the misconduct is such that any warning needs to last longer than that, this should be considered. Similarly, processes could also be put into place which limit a warning to 12 months, except in circumstances of misconduct which are substantially the same as those for which the warning was given, in which case the time limit would be extended.
  • Ensuring that any warnings given are documented properly, and that their status is clear. All too often, multiple “informal” warnings stack up on an employee’s file without any further action having been taken, without any time limit being decided on, and without the employee having been clearly told how to improve his or her behaviour. As always, approaching an employment tribunal with a clear record of disciplinary action is vital, even if the warnings in question have since lapsed.
Devereux Matthew Sellwood

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