The question of whether an employer can take into account a previous disciplinary warning is a difficult one.

On the one hand employees need certainty and if a warning is expressed to only last for a definite period, they should not expect it to be used against them when that period has passed. On the other hand, if an employee has previously committed a similar misdemeanour an employer would wish to take that into account when considering the appropriate sanction.

This difficult balancing act is explored in the Court of Appeal (CA) decision in Airbus v Webb, which overturned the decisions of the Employment Tribunal (ET) and the Employment Appeal Tribunal (EAT). The ET and EAT had both interpreted the previous case of Diosynth v Thomson, a Scottish Court of Session decision, as meaning that an employer had to ignore expired warnings for all purposes when considering disciplinary sanctions. The CA found that this was wrong but the CA did caution against regarding this case as encouraging reliance on expired warnings as a matter of course.

Facts

Mr Webb had been employed by Airbus since 1990 as an aircraft fitter. In 2004 Mr Webb was accused of misusing Company premises and equipment, specifically 'fraudulent use of company time' and was summarily dismissed. On internal appeal, his dismissal was substituted with a final written warning. According to Airbus's procedures, in the absence of further endorsement, written warnings were to expire after 12 months on the employee's record. The procedure went on to say that warnings:

'should normally be disregarded for future disciplinary purposes. There may however be occasions where an employee's conduct lapses once the warning is no longer in force. Where a pattern emerges and there is evidence of abuse, the employee's disciplinary record should be borne in mind in deciding the entry level for disciplinary action...'

Mr Webb's warning letter reflected this, stating that it would remain on his file for 12 months, whereafter it would be removed subject to his satisfactory conduct as detailed. It concluded that the likely sanction for further misconduct would be dismissal.

13 months after this event, he was again accused of misconduct, this time for watching television whilst on his night shift. Following an investigation he was dismissed and his internal appeal rejected. Four other employees accused of the same misconduct were given final written warnings due to their good disciplinary records to date.

Mr Webb brought a claim for unfair dismissal.

Employment Tribunal

The ET found that it was bound by the decision in Diosynth. Airbus acknowledged that the reason Mr Webb was dismissed rather than given a final written warning as his colleagues were was because of his previous misconduct. The ET held this amounted to taking an expired warning into account rendering the dismissal unfair. If it had not done so, the dismissal would have been fair.

Airbus appealed.

Employment Appeal Tribunal

On appeal, the EAT gave the Airbus argument serious consideration. The EAT accepted it was not strictly bound by a Court of Session decision, but felt it was important not to create separate case law in England and Wales as opposed to Scotland when the law itself was the same. Accordingly, whilst acknowledging the difficult balancing act, the EAT also followed Diosynth and concluded that Airbus had taken an unexpired warning into account in the decision to dismiss which was impermissible under the principles in Diosynth.

Airbus again appealed.

Court of Appeal

Airbus raised a number of arguments: first that whether or not an expired warning had been used and should not have been, this was but one element of the overall decision to be made, namely was the dismissal reasonable in all the circumstances. Secondly, the other employees were merely being given the opportunity that Mr Webb had been given the last time he fraudulently misused company time.

The CA acknowledged that they had to resolve a difficult balance between the fairness of relying on a time limited warning and the fact that an employee was being disciplined for substantially the same misconduct as something he had done before.

However, first the CA noted that one particular circumstance was not necessarily determinative of whether or not a dismissal was reasonable in all the circumstances. Secondly, there was nothing in the unfair dismissal legislation which required an employer to ignore previous misconduct.

Finally, the CA agreed that it was desirable for the ET and EAT to follow the decisions of the Court of Sessions, however, they had misinterpreted Diosynth as it applied to this case. First the circumstances in Diosynth were different to those here. Secondly, it had not held that previous misconduct could never be subsequently taken into account by an employer.

Applying all of the above to this case, the CA found that Mr Webb's dismissal was fair. The principal reason for his dismissal was not that he had previously had a final warning, the principal reason was his misconduct. The relevance of the warning was therefore whether Mr Webb's dismissal was a reasonable response to his misconduct. In addition, Mr Webb was not treated differently to those who were not dismissed as this was their first offence but his. The ET had therefore erred on the law and had it not wrongly interpreted Diosynth it would have found the dismissal fair.

Conclusion

As with many such decisions, this case should be treated with caution and employers should not expect to rely on expired warnings routinely. The legal arguments here were finely balanced and, as always, these cases will turn on their facts.

The EAT did, however, come up with some helpful guidance which was endorsed by the CA:

Employers should be particularly careful when issuing written warnings to tailor them to the circumstances. This means that, although ACAS guidance suggests 12 months as a suitable expiry time, this need not be a hard and fast rule. If the misconduct justifies it, or if the warning itself is a substitution for a higher penalty (as was the case here), a longer expiry date could be used. The warning could also be termed to be extendable in the event that a similar act of misconduct occurs.
Notwithstanding the ACAS guidance, employers should be free to tailor their procedures on written warnings to suit their circumstances although they must always be carefully drafted and clearly drawn to the attention of employees.

What the CA said was that Airbus had not relied on the expired warning as the reason for the dismissal. The misconduct itself was sufficient to justify the dismissal. In Diosynth, however, the employer used the expired warning as part of the reason for the dismissal. What Airbus effectively did was rely on the warning as a reason not to change dismissal into a final warning.

It remains the case that expired warnings cannot be used as a reason to justify a dismissal. However, it does mean that an employer, when considering mitigating factors, can use it to note that the employee does not have an unblemished disciplinary record. A further word of caution, however: the CA placed some emphasis on the fact that Mr Webb's misconduct had been similar on both occasions. Therefore, even if previous misconduct is only being taken into account to this limited extent, the type of misconduct may be also relevant.

This article originally appeared on the Bond Pearce website - www.bondpearce.com.