UK: A (Final?) Word Of Warning

Last Updated: 21 March 2007
Article by Sue Nickson

Employers should not rely on expired warnings, according to the EAT in Airbus UK Ltd v Webb.

In July 2004 Mr Webb was summarily dismissed for washing his car when he should have been working. On appeal a lesser sanction, a final written warning, was imposed. Mr Webb was informed that this would remain on his file for 12 months. However, in September 2005, little more than three weeks after the expiry of the warning, Mr Webb was one of five employees caught taking a break when they should have been working. All were found guilty of gross misconduct and Mr Webb was summarily dismissed. The other four received final written warnings because, unlike Mr Webb, they had clean disciplinary records.

Mr Webb claimed unfair dismissal relying upon the Scottish Court of Session’s decision in Diosynth Ltd v Thomson [2006] in which an employer had been found wrong to take into account an expired warning when deciding whether or not to dismiss an employee for misconduct where the act of misconduct would not in itself (without that prior warning) have justified dismissal.

The Tribunal was satisfied that Mr Webb’s conduct on this second occasion amounted to gross misconduct under Airbus’ disciplinary procedure and that it would have been reasonable for it to dismiss him. However, since its treatment of the others showed that it would not have dismissed him had it not been for the expired warning, the Tribunal found (relying on Diosynth) that the dismissal was unfair.

At the EAT Airbus sought to distinguish Diosynth. It pointed out that the warning issued to Mr Webb was not the basis for taking more severe disciplinary action than the conduct otherwise justified, but rather it was a basis for not showing leniency towards Mr Webb in circumstances where his conduct did in fact justify dismissal. Whilst the EAT had some sympathy with this argument, it said that the Tribunal had applied "a very modest and entirely logical extension" to the principle established in Diosynth and that it was not prepared to interfere with it, especially as to do so would mean that the law in England and Wales would be different from that in Scotland.

The EAT therefore concluded, with evident reluctance, that it could not overturn the decision that Airbus was not justified in taking into account the expired warning. It said that the purpose of a warning is to enable an employee to know where he stands and what is expected of him and that it was legitimate for Mr Webb to assume that the warning would not be taken into account once it had expired. As a result, it took the view that the Tribunal was not just entitled but actively obliged to disregard expired warnings for all purposes.

This is an outstandingly unattractive and frustrating decision for employers, which flies in the face of both common sense and good industrial relations. It means that if a warning includes a time limit (which, in line with established good practice, most do) then once it has expired it can no longer be relied on – even if, as in Mr Webb’s case, the employee goes on to commit the same offence only a matter of weeks after the warning has expired, and even though his knowledge of the employer’s disapproval of the conduct in question clearly does not expire with the warning. By barring reliance on expired warnings even by way of background (to establish, for example, that the employee knew the conduct in question to be unacceptable, surely a material factor in considering the appropriate sanction), the EAT effectively gives carte blanche (almost an invitation) to an employee to re-offend on a regular basis.

Is the answer therefore to issue warnings that never expire? In the past employers have been cautioned against doing so, not least because the ACAS Code of Practice on Disciplinary and Grievance Procedures states that warnings should be disregarded for disciplinary purposes after a specified period, for example 12 months in the case of a final written warning. In Webb, however, the EAT acknowledged that if employers are not going to be allowed to have regard to expired warnings in any circumstances they should at least be given some flexibility over how long the warnings last for. It did not go so far as to say that employers can, as a matter of course, issue indefinite warnings but it did say that in certain circumstances it may be appropriate to issue them for a longer period than would normally be the case.

The ACAS Code only says that final written warnings should "normally" be imposed for 12 months – it does not say that they have to be. The EAT said that there is no reason why final warnings could not be issued for longer if the nature of the misconduct justified it, especially (as in Webb) if the warning is imposed as a lesser sanction for something which would have actually justified dismissal. It said that an employer might extend the normal period of a warning in respect of a later act of gross misconduct which is the same or substantially the same as that for which the earlier final warning was given, for example, a warning that future misconduct would lead to dismissal in the next 12 months, or 24 months if it was his taking unauthorised time off again.

On the facts of Webb, it would appear that Airbus was undone by its own leniency, first towards Mr Webb when his dismissal was commuted to a warning in 2004 and second to his colleagues in 2005. This decision would therefore appear to push employers into a much tougher disciplinary regime, extending the duration of warnings given and discouraging any moves back from the brink of dismissal. Giving the employee the benefit of the doubt will clearly have its risks. Indeed, it is not hard to foresee an employee using the employer’s own leniency on one occasion to argue that dismissal after a repetition (the warning for the first occurrence having expired in the interim) is necessarily too harsh because it did not happen first time and any more severe penalty on the second occasion must therefore have relied, even subconsciously, upon that warning.

If employers want to go down the extended warning route they need to ensure that their policies and procedures give them the flexibility to do so. They should, for example, as a minimum, reserve the right in any disciplinary procedure to extend the duration of warnings in certain circumstances (especially final written warnings) if the conduct justifies it.

In light of this decision employers should also be cautious about taking expired warnings into account for other purposes, for example as part of a redundancy selection or promotion exercise. The same would apply for pay or bonus purposes – it is not unusual for such schemes to take into account disciplinary warnings over the preceding year, but that would mean that a, say, 6-month warning which had expired would mean something different in cash terms from the same warning given for the same thing just late enough not to have expired. In other words, if you are going to misbehave, do it early in the pay year! Express provision for the use of even expired warnings for these purposes would seem necessary.

The position is further complicated by the Data Protection Act requirement that employers not keep data about staff which is out of date. Surely a record of an expired warning which cannot be relied upon for any purpose is necessarily out of date? In fact, probably not. Such warnings remain as a necessary record to support pay/promotion/retention etc. decisions made while they were still current, decisions which could later be argued to be discriminatory in the absence of evidence to the contrary. For those purposes they need to be retained, though perhaps moved from the Disciplinary to the Pay/Termination section of the HR file to reduce the risk of inadvertent reliance on them by the employer.

The EAT said lightly that most of these obvious ills could be addressed for the future by careful drafting of policies and the warnings themselves (and to some extent this is true) but this really does not address the position for the present, and all the existing "fixed-term" warnings already issued. If in doubt, take advice!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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