Unfair dismissal: Warning given in bad faith could not be relied upon to justify dismissal - DAC Beachcroft

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Unfair dismissal: Warning given in bad faith could not be relied upon to justify dismissal

Published On: 12 May 2015

In this case the Court of Appeal looked at whether an employer who had relied on a warning for unrelated misconduct, which was allegedly given in bad faith, to dismiss an employee for further misconduct had acted reasonably.

The Claimant was employed by SPC Ltd as a recruitment manager. In 2010, he was given a final written warning for assisting a friend to obtain employment with SPC, in contravention of their fair recruitment procedure.

The letter confirming his warning stated that he was to familiarise himself with SPC's policies and procedures as detailed in the staff handbook. The Claimant did not appeal against this warning. He subsequently sent a number of offensive e-mails that were found to be inappropriate and in breach of the computer usage policy. As his final written warning was still ‘live’, and he was supposed to have familiarised himself with the company's procedures following that warning, he was dismissed for misconduct. After an unsuccessful internal appeal hearing the Claimant brought an employment tribunal claim for unfair dismissal, alleging, among other things, that the final written warning had been given in bad faith. He alleged that the manager, who was in charge of the disciplinary proceedings regarding the appointment of his friend, covered up his own involvement in the recruitment process. The employment judge, taking the view that the background to the final written warning was ‘irrelevant satellite litigation’, refused to hear evidence on this. He went on to find that the Claimant's dismissal was fair.

The Claimant appealed to the EAT, arguing that the employment judge was wrong to exclude evidence about the background to the warning. The EAT considered that while the employment judge ought to have investigated the earlier warning, even if bad faith had been found in its view this would not have made any difference to the finding that the claimant had been fairly dismissed. It noted, among other things, that the final written warning was valid ‘on its face’ and had not been challenged at the internal appeal. The Claimant appealed to the Court of Appeal.

The Court of Appeal upheld the claimant's appeal finding that an employer would not be acting reasonably in taking into account such a warning. The Court of Appeal found it was well open to question whether it was fair to dismiss, rather than finally warn, someone who would not otherwise been dismissed but for the warning allegedly given in bad faith. The case was remitted to a differently constituted employment tribunal to decide whether the warning had, in fact, been given in bad faith and the fairness, or otherwise, of the Claimant's dismissal.  

What this means for employers

We have sympathy with the employer here as the Claimant had not raised the issue of the warning being given in bad faith until the tribunal proceedings, so they did not have an opportunity to resolve the issue earlier. The Court of Appeal's judgment makes it very clear that just because a warning is not challenged on appeal does not make the warning valid if it is challenged at a later date. This puts employers in a difficult position. Ensuring there is a proper investigation before any warnings are meted out should mean that any later allegations of bad faith can be defeated. 

Way v Spectrum Property Care Ltd

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