March 2013 case update

case updatesUnfair dismissal: Warning bells…

Summary: In what circumstances should a Tribunal consider whether a final written warning, subsequently relied on in deciding to dismiss an employee, has been appropriately given? Only if it was issued in bad faith or manifestly inappropriate, says the Court of Appeal and the EAT respectively.

The cases of Simmonds v Milford Club and Davies v Sandwell MBC are available here and here.

Facts: The above appeal cases have explored the limited circumstances in which a Tribunal is entitled to look behind a final written warning when assessing the fairness of a subsequent dismissal.

  1. Simmonds: Mr Simmonds was employed by Milford Club (a private social club) as Club Steward. He had been given a final written warning when he asked his wife to deposit the club’s takings: he had been unable to park outside the bank and so asked his wife to deposit the takings whilst he waited in the car. Mr Simmonds was then disciplined for failing to follow a reasonable management instruction: He gave the staff a Christmas bonus of £15 instead of a bottle of wine up to the value of £15 as he was instructed to do. This resulted in Mr Simmonds’ dismissal as he was already under a final written warning.Mr Simmonds brought an unfair dismissal claim which was upheld by the Tribunal. However, the EAT allowed the employer’s appeal as the Tribunal had failed to consider whether the final written warning was ‘manifestly inappropriate’, particularly given that the employer had failed to comply with their own disciplinary procedure when issuing a final rather than first written warning. This test has a higher threshold than the test applied to the reasonableness of a dismissal. The case has been remitted to the Tribunal to reconsider.
  2. Davies: Miss Davies worked for Sandwell Council (the Council) as a teacher. She was given a final written warning for alleged misconduct during a lesson. Miss Davies appealed but dropped this as she was concerned the process may instead lead to her dismissal. The final warning was therefore still on Miss Davies’ record when further misconduct was alleged. The Council took the final warning into account when deciding, after a further disciplinary hearing, to dismiss Miss Davies. A Tribunal found that Miss Davies had been fairly dismissed.Miss Davies appealed on the basis that the Council had deliberately chosen not to consider relevant evidence (that would have shown that the events which led to the final written warning could not have happened as alleged) and had failed to establish a case against her. Miss Davies argued that the final warning was therefore manifestly inappropriate and her dismissal unfair.Miss Davies appeal was ultimately dismissed by the Court of Appeal. The Court emphasised that the question for the Tribunal is whether the dismissal was fair. It is not the Tribunal’s role to re-open the warning and rule on whether it should, or should not, have been issued. The Tribunal may only conclude that it was unreasonable for the employer to rely on the warning when deciding to dismiss where the Tribunal finds the warning has been made in bad faith or is manifestly inappropriate, or that there were no obvious grounds for issuing a final warning.

    In this case the Court of Appeal criticised the Tribunal for reading “acres of irrelevant materials” in respect of the factual background to the final written warning over a 20 day hearing. Instead a Tribunal should concentrate on whether the final written warning is something “a reasonable employer could reasonably take into account in the decision to dismiss the claimant for subsequent misconduct”. It should have been enough here for the Tribunal to satisfy itself that there was an arguable case for imposing a final written warning on Miss Davies. It did not need to go into the detailed evidence in support of the underlying allegations.

Implications: Tribunals will only re-consider previous warnings when they were issued in bad faith or were manifestly inappropriate. Employers should bear this in mind when faced with a situation where a decision to dismiss is affected by a prior warning an employee has received. The employer should satisfy itself that any such warning had substance at least to the extent that it was handed out in compliance with procedures and was not obviously unreasonable or unfair. Overall, employers should ensure that their disciplinary procedures are applied fairly and consistently at all disciplinary stages.

Redundancy – careful with criteria

Summary: Is a dismissal fair where the redundancy selection procedure includes a series of competency tests normally used in the context of recruitment? No, says the EAT in Mental Health Care (UK) Ltd v Biluan and another, available here.

Facts: In late 2010 the employer, Mental Health Care (UK) Ltd, decided that it needed to make redundancies as a ward was being closed. It decided to treat the pool for redundancy as all the nursing and support staff at the hospital. 58 staff were therefore placed at risk, and told that they would be subjected to a 30 day consultation period which would include a selection process. The selection criteria were made up of a competency assessment (which accounted for 60% of the score); the staff’s disciplinary record (20%); and their sickness absence (also 20%).

The competency assessment involved three elements: a written test, an individual interview and a group exercise, which took the form of an observed discussion of a hypothetical scenario presented to the employees. These methods of assessing competency were normally used by the hospital for the purpose of recruitment and were apparently deliberately chosen because there was thought to be insufficient information about past performance. The competency assessment was carried out by a team of HR staff, led by the Group HR Director, none of whom had any experience of working with the individuals who were being assessed. No past appraisals came into the equation, nor were any line managers consulted. The results had been acknowledged by the managers to be “surprising” and to have led to the selection for redundancy of some “very good workers”, but they had not been revisited because the process was thought to have been “robust”. Ms Biluan was one of these workers.

Ms Biluan and Mr Makati were subsequently made redundant and brought claims to the Tribunal for unfair dismissal and discrimination. They were successful in their unfair dismissal claims and the employer appealed on the grounds that the Tribunal had “substituted” its own views for that of the employer as to the validity of the selection criteria.

The EAT considered it very unusual for an employer to conduct a redundancy selection exercise using recruitment-style assessments without any reference to past appraisals or the views of managers. The process had produced some surprising results and the Tribunal had been entitled to find that the employer had acted unreasonably. The EAT commented that it had been a mistake to choose an elaborate and HR-driven method which deprived it of the benefit of input from managers and others who actually knew the staff in question. That method produced results which were acknowledged to be surprising, but which the employer persisted with because the process was thought to be so “robust”. The EAT was critical of a “blind faith in process” which had in this case led to the employer losing touch with common sense and fairness.

Comment: A fair selection procedure is a key requirement in redundancy dismissals. Although unusual, it might have been reasonable for the employer to use recruitment-type assessments if it had combined these with more traditional methods of selection such as appraisals and managerial input from those who knew the staff. Any departure from the conventional approach to selection criteria should be treated with caution and emphasises the importance of having a performance management system in place under which appraisals are carried out regularly and consistently across the workforce.