Final Warnings Must Be Given in Good Faith to Have Any Effect

In Way v Spectrum Property Care Limited, the Court of Appeal has ruled that final warnings given in bad faith cannot be relied upon when assessing whether or not there was sufficient reason for dismissing an employee.

Mr Way worked for property service company Spectrum Property Care Limited as an electrical contracts manager. In December 2010 he had been given a final warning in respect of alleged breaches of the company's recruitment policy. He was said to have assisted his ex-partner's son to obtain a position with the company. The letter confirming the outcome of the disciplinary hearing stated that the conduct improvement expected of him was to ensure that he was fully familiar with the group's policies and procedures as detailed in the staff handbook. That warning was still on his file when he was later found to have used his work computer to send inappropriate emails. A subsequent disciplinary hearing found that he had sent offensive emails in breach of the company's computer usage policy and, in the light of the 'live' final written warning, the decision was taken in December 2011 to dismiss him for gross misconduct.

Mr Way brought a claim for unfair dismissal. In rejecting his claim, the Employment Tribunal (ET) found that the disciplinary procedure followed was fair and reasonable and that dismissal was within the band of reasonable responses available to Spectrum in the circumstances. The ET did not address Mr Way's claim that the final warning given to him in 2010 had been given in bad faith. His contention was that the disciplinary proceedings had been initiated to cover up a more senior employee's part in the matter and that he was told not to appeal against the warning and 'it would pay him to forget about the whole thing and move on'.

The ET's ruling was subsequently upheld by the Employment Appeal Tribunal (EAT). Although the EAT acknowledged that the ET had failed to address Mr Way's allegation that the final written warning had been given in bad faith, it concluded that the failure to address the issue had not affected the outcome of the case. In its view, the warning meant that dismissal was almost inevitable and its fairness could not be doubted.

In allowing Mr Way's appeal, however, the Court of Appeal described the EAT's decision as having 'a degree of illogicality'. Furthermore, it had reached for itself a decision which it was for the ET to make. The ET had been wrong to refuse to consider Mr Way's arguments. A final warning given in bad faith could not be relied upon for the purpose of determining whether there was a good enough reason to justify dismissal and Mr Way's case was sent back to a freshly constituted ET for reconsideration.