Employer Could Not Rely on Final Written Warning Issued in Bad Faith

An employer cannot rely on a final written warning issued in bad faith when dismissing an employee for subsequent misconduct.

In Way v Spectrum Property Care Mr Way received a final written warning after he helped an acquaintance obtain employment with his employer. This breached his employer’s recruitment policy. He did not appeal that warning. Later he was found to have sent inappropriate emails in breach of his employer’s IT policy. His employer did not consider that sending the inappropriate emails justified dismissal on its own. However, as he was on a final written warning which was still “live”, it dismissed him. 

Mr Way appealed, arguing that the manager who conducted the disciplinary proceedings which resulted in the final written warning:

• Had allowed Mr Way to assist the recruit; and
• Had used the disciplinary proceedings to cover up his own involvement. 

The employer rejected these arguments and confirmed the decision to dismiss.

Mr Way claimed unfair dismissal, arguing that the final written had been issued in bad faith. His employer had not therefore been entitled to rely on it when deciding to dismiss him for the subsequent breach of the IT policy. The employment tribunal refused to let him give evidence on this point, saying that the background to the final written warning was irrelevant. Mr Way appealed to the Employment Appeal Tribunal and then to the Court of Appeal.

The Court of Appeal ruled that an employer cannot take account of a warning issued in bad faith when deciding whether there are sufficient grounds for dismissal. An employer who takes such a warning into account will not be acting reasonably and any subsequent dismissal will be unfair. The employment tribunal should therefore have allowed Mr Way to give evidence on this point. 

Employers need to be careful when relying on a final written to justify dismissal for subsequent misconduct. If the employee alleges that the earlier final written warning was issued in bad faith, they will need to investigate that allegation and decide if it is well-founded. Failure to do so could mean that any subsequent dismissal based on the final written warning will be unfair. Employers cannot assume that just because the employee did not appeal the final written warning at the time, it is not open to challenge at a later date.