MAPLES Charlie 3x3 JOLLIFFE Arron 3 x 3When is a final warning not a final warning? Issuing a final written warning is often an important procedural step to achieve a fair conduct dismissal, however, it is not always clear cut whether a final written warning is sufficient to enable an employer to take the next step to dismissal. Charlie Maples and Arron Jolliffe consider a recent case that looks at this and identify some practical points for employers to take away.

Background

Generally, an employer can only fairly dismiss an employee on the basis of conduct if the employee has committed an act of gross misconduct or the employee has already been given a final written warning for a past act of misconduct and that warning remains 'live' (i.e. has not expired) at the time when the final act of misconduct is committed. Final written warnings are typically issued following prior informal/formal verbal/written warnings as appropriate and depending on the seriousness of the conduct.

However, where an employee is dismissed after a final written warning, employees sometimes try and reopen the final written warning and argue that their dismissal has been unfair on the basis that the warning was invalidly given. This is what the Claimant argued in the recent case of Beattie v Condorrat War Memorial and Social Club & Others (EAT).

Legal position

There is well-established case law on reopening final written warnings which provides that tribunals:

  • Will not reopen the circumstances of final warning relied on for procedural dismissal;
  • Will presume that the final warning was validly given for a genuine act of misconduct; and
  • Will not require employers to prove the validity of the final written warning unless the Claimant can show some facts from which a Tribunal could conclude the sanction was manifestly inappropriate (Bandara v BBC UKEAT/0335/15); and
  • Will only conclude that a final warning was invalidly given (and therefore not 'live' when the employee was dismissed) in three circumstances:
    1. the final warning was given in bad faith
    2. there were no prima facie grounds for giving the final warning
    3. it was manifestly inappropriate to have given the final warning. (Wincanton Group plc v Stone & Another)

It was this third ground – whether it was manifestly inappropriate to have given the final warning – that was the subject of the present case.

Factual Background

The Claimant (an employee of a social club) identified that two bottles of vodka had gone missing and was not able to locate them on the premises. She attended a meeting with the employer but could offer no explanation as to why the stock had gone missing and could not be sure whether she or a colleague had been on duty for the relevant delivery. She did, however, accept "part responsibility" and offer to pay the employer back for the missing stock (which in the event was rejected).

In its employee handbook, "misconduct" was defined by the employer as including negligent loss of the employer's property, which would be deemed "serious misconduct" if it had a serious or substantial effect on the employer's operation. The handbook also stated that if an employee were to commit serious misconduct, the employee could be issued with a final written warning (in the absence of any other warnings).

The employer decided to issue the Claimant with a final written warning for serious misconduct, on the basis that she had negligently lost the cases of vodka and this had a serious effect on the employer's operation (since the club could not afford to have stock go missing).

Four months later, a second issue arose; the Claimant informed the employer that she refused to sell tickets for a function on the basis that she could face dismissal if money went missing whilst she was responsible for the tickets. The employer eventually dismissed her for misconduct (refusing to sell the tickets), treating the earlier warning as a 'live final warning'.

The Claimant then brought a claim for unfair dismissal, claiming that the employer had followed an unfair process when treating the earlier final warning as a 'live final warning' when dismissing her for the later misconduct. The Claimant argued that the final warning given by the employer was invalid because it was "manifestly inappropriate" in the circumstances. In particular, the Claimant focused on the fact that her alleged initial misconduct was a negligent loss of property, but as the employer had not conducted any investigation into whether the Claimant had acted negligently when she lost the property, it should not have found the Claimant guilty of misconduct. If correct:

  • the Claimant could not have committed serious misconduct, so issuing a final warning was manifestly inappropriate in the circumstances.
  • there would therefore have been no valid 'live final warning' when the employer dismissed the Claimant for the later misconduct, making the dismissal unfair.

Outcome

The tribunal dismissed the Claimant's claim for unfair dismissal, finding that the earlier final warning was not "manifestly inappropriate". Although the employer had not conducted an investigation into whether the Claimant had acted negligently, her admission of "part responsibility" for the missing stock was sufficient evidence to allow the employer to conclude that she had acted negligently. Therefore, the employer was entitled to conclude that she had committed an act of misconduct, and as the misconduct amounted to serious misconduct the employer was entitled to issue her with a final warning.

On appeal, the Employment Appeal Tribunal agreed and the Claimant's claim for unfair dismissal was rejected.

Take Away Points

Although the employer successfully defended the unfair dismissal claim here, this case nonetheless highlights the issues faced when dismissing for misconduct following the issue of a final warning.

Here, the employer had clearly stipulated in its handbook that an employee commits an act of misconduct if they "negligently" lose the employer's property and the employee accepted "part responsibility". However, if the Claimant had not said anything and the employer had still not conducted an investigation the tribunal may have considered that the final warning was "manifestly inappropriate" and the Claimant's unfair dismissal claim could have been successful.

When issuing a final written warning, employers should consider the following steps:

1. Check your disciplinary rules to see whether the conduct is covered and how it will be treated. Employers are not expected to provide an exhaustive list but it is useful to clearly identify the types of behaviour that will be considered misconduct.

2. Check what specific criteria you need to be satisfied of in accordance with the rules in order to find the employee guilty of misconduct. For example, do you need to be satisfied that the employee acted "negligently" or "recklessly" or "with intent"?

3. Conduct a thorough investigation.

4. Consider any mitigating circumstances.

5. Follow a fair process in accordance with the company's disciplinary rules and the ACAS code on disciplinary procedures

6. Ensure that a manager who issues a disciplinary sanction, such as final written warning, includes an accurate overview of the conclusions made from the investigation, the misconduct that the employee has been found guilty of, and the date of the final warning in the letter. The letter should also clearly state the date on which the warning will expire (which is usually 12 months after issue).

7. If you are considering procedurally dismissing an employee for misconduct, check the final written warning is 'live' (i.e. it has not expired) and that there are no potential validity issues with it (i.e. it looks well-reasoned bearing in mind your disciplinary rules, what the disciplinary manager concluded happened based on the investigation and any relevant mitigating circumstances and any appeal at the time).

8. It is also important to remember that, regardless of what your disciplinary rules state, to be fair, any subsequent dismissal must be reasonable in the circumstances (which includes the size and administrative resources of the employer's undertaking). In particular, it is important that a fair investigation and procedure were undertaken and it was reasonable to treat the misconduct as a sufficient reason to dismiss.

For assistance and advice on how to conduct a disciplinary procedure and/or a conduct dismissal, please speak to Charlie Maples or your usual Foot Anstey contact.