Discipline and Grievanceby Kate Russell
Possible pitfalls for inexperienced managers
Good intentions are not enough – the best way to avoid making an expensive mistake is to rigorously follow the correct procedures.
Resignation before a disciplinary hearing
It often happens that a manager who is about to take an employee through the disciplinary process suggests that the employee should resign rather than face dismissal. This may be very well intentioned: for example, to save the employee the embarrassment of being dismissed. Don’t do it. Your job is to apply the disciplinary procedure. To circumvent it, even if it’s for the best of reasons, can lead you to a constructive dismissal claim.
If an employee resigns of his own volition rather than face the disciplinary process, he is entitled to do so.
Resignations during the hearing
Once the disciplinary process has started, you should carry it through.
Occasionally an employee going through the hearing will conclude that he’s likely to be dismissed and will ask to resign. Adopt the Magnus Magnusson approach (‘I’ve started so I’ll finish...’) and complete the hearing process.
The risk here is that if you allow a resignation in these circumstances, the employee may claim duress later and thus constructive dismissal. The risk is increased if you are chairing the meeting by yourself.
It’s important for everyone concerned that the rules are known to everyone, are crystal clear and are consistently and fairly applied.
Custom and practice
Some terms and conditions of employment become established because they have become an accepted way of doing things for some time. They are often not written down, but are widely adopted and can form part of the employment contract.
For a term to be regarded as ‘custom and practice’, it must be
- Reasonable – it must be approved by a court or tribunal
- Certain – it must be able to be defined precisely
- Notorious – it must be long-established and well known
- Not inconsistent with an express term or some other implied term of the contract
- Necessary to give business efficacy to the performance of the contract.
Custom and practice is usually associated with matters such as the custom of early finishing on Fridays, but it can arise in discipline too.
A Christian charitable housing association always tried to give their staff one last chance when applying the disciplinary process. Over the years, they had formed the habit of giving not just a Final Written Warning, which was part of the disciplinary procedure, but a Final, Final Written Warning, which was not.
A new manager arrived at one site and eventually dismissed a black woman, B, who at that stage was on a Final Written Warning. The manager was not aware of the practice of issuing Final, Final Written Warnings. B claimed that she’d been unlawfully discriminated against on grounds of her colour because she was treated less favourably than her white colleagues. The case was settled out of court with the association accepting liability and making appropriate compensation.
How many final warnings?
You would think that a final warning would mean just that – one warning and the next step is dismissal. Many companies fall into the trap of giving repeat final written warnings. This tends to happen when they are short staffed and feel that they can’t afford to lose people.
Always stick to your procedure, unless there are genuine mitigating circumstances.
It doesn’t work as a strategy (that staff member is still failing to meet your standards) and everyone else becomes complacent about the way you apply your process. If your procedure works on the Three Strikes basis and you keep giving final warnings, at what point do you dismiss? How can an employee with five written warnings distinguish between five and six final written warnings? He may be able to argue that he was unfairly dismissed because he’s had all these final written warnings and never been dismissed. What’s different this time? It’s a fair comment.
If a formal sanction is needed, the level and nature must be reasonable or justified. This will depend on all the circumstances of the particular case. If the facts are disputed, you have to decide on the balance of probability which version of events is true. A balance of probabilities doesn’t mean that you have to have proof beyond reasonable doubt. All it means is that on balance the reasonable manager would reach the conclusion you did.
Make sure that any disciplinary sanction is a reasonable response to the circumstances of the case. Your decision should fall within the ‘reasonable band of responses’. Although developed by the Court of Appeal in 1981 – British Leyland (UK) Ltd v Swift  – this is still the test used by the courts today. Below is Lord Denning’s definition of the test.
The correct test is: was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view; another quite reasonably take a different view.
There have been some surprising decisions as to what constitutes a reasonable response. Case law has usually agreed that theft amounts to serious misconduct justifying dismissal, but in a few cases some decisions have suggested that where the amount stolen is very small it may be unfair to dismiss in those circumstances.
The case of Tesco Stores Ltd v Othman-Khalid, below, gives some comfort. You should make sure that your disciplinary procedure specifies that an employee who steals will be dismissed, even if the intrinsic value is very small. The case does not go so far as to establish the principle that dismissal for theft will always be fair. However, given the circumstances of this particular case, it is a strong indication that an employment tribunal will need exceptionally strong mitigating circumstances before finding that a dismissal for theft is unfair.
O-K worked alone at nights in one of T’s petrol stations. He was caught on a video camera stealing a packet of ten cigarettes from a bag of damaged stock which was due to be returned to the manufacturer. At the subsequent disciplinary investigation he denied the theft and claimed that he had sold the cigarettes to a customer.
He was subsequently dismissed for gross misconduct and complained of unfair dismissal. The court upheld T’s decision. Theft was a potentially fair reason and the dismissal fell within the band of reasonable responses for an employer. It was irrelevant that some employers would not have dismissed the employee in these circumstances.
Although the employer was large and the amount involved small, the employer was entitled to take the theft very seriously.
It is usual for two or three warnings to be given before dismissal is contemplated. The courts take the view that it is an extremely serious matter to deprive a person of his livelihood, so you are expected to give plenty of time for the employee to improve.
Dismissal is, of course, the ultimate sanction and an act of last resort. If you dismiss an employee on the grounds of either misconduct or poor work performance, the onus is on you to show that this is the real reason for the dismissal.
So before deciding on any disciplinary penalty, consider
- The seriousness of the offence, and whether the procedure gives guidance
- The penalty imposed in similar cases in the past
- The individual’s disciplinary record and general service
- Any mitigating circumstances
- Whether the proposed penalty is reasonable in all the circumstances
- Any current warnings for related offences.
There are several potential levels of sanction. These are
- Oral warning
- Written warning
- Final written warning
- Summary dismissal.
Many employers now adopt a two-stage warning approach:
- First warning, often for six months
- Final warning, often for twelve months.
The law does not lay down the length of time during which warnings will remain live. That’s the choice of the individual organisation, but it is subject to the over-riding requirement if reasonableness.
The Data Protection Act gives employees the right to see disciplinary notes held on their personal file, though they will not be automatically entitled to access third-party witness statements if to do so would reveal the identity of the witness. The witness would have to give permission.
Employees may be dismissed for the totting up of repeated minor offences or a single act of gross misconduct. ‘Totting up’ is the term used for taking a live sanction into account when making a decision about a further breach of standards. You can only tot up like with like, in other words, conduct with conduct or poor performance with poor performance.
John receives a first warning for poor time keeping, which is minor misconduct.
During the time that warning is live he is warned again for inappropriate use of equipment, another act of minor misconduct. At this stage, you can replace his first stage warning with a final warning.
If he offends again on a misconduct matter while this final warning is live the next stage will be dismissal.
If the next issue is a poor performance issue, John will receive a first warning for capability.
Note that many organisations still only increase the level of sanction when the misconduct is the same. For example, John receives a first warning for poor time keeping, which is minor misconduct.
During the time that warning is live he is warned again for inappropriate use of equipment, another act of minor misconduct. He receives a second first warning.
The first of the two warnings will only be escalated if he re-offends on time keeping while the first warning relating to time keeping is still live.
You should not dismiss for a first offence other than gross misconduct.
Note that plunging into formal warnings too early or giving an unduly harsh warning may be counter-productive and in one case was even found to be constructive dismissal.
S had worked for her employer for five years and had never been given any formal warnings. One day she had a heated discussion with a colleague. She felt so drained and upset that she left the office for 90 minutes. She was entitled to a 30-minute lunch break. On her return, her supervisor saw that she was still very upset and sent her home. The company disciplined her for her unauthorised absence and issued a final written warning. S resigned claiming constructive dismissal. The court agreed with S that the penalty was unduly onerous in this case.
Expired warnings should be disregarded
In deciding what action to take, it is reasonable to consider the employee’s track record. However, you cannot use an expired warning to give a heavier sanction than you otherwise would.
D chiefly produced raw chemicals and had an extensive safety training programme, which T had attended. He was taught, among other things, the safety risks of failure to follow a process known as ‘inerting’. The company made clear that omitting the process was an act of gross misconduct.
In July 2000 T was disciplined for failing to inert a vessel and received a 12-month written warning. He was told that any further failure to inert would result in disciplinary action. The warning was not specified as a final warning.
Following a fatal explosion at the plant in November 2001, it emerged that T had breached the procedure three more times in October and November 2001, and had falsified some documentation. Some 17 other employees were found to be guilty of the same charge. All the employees involved were taken through a disciplinary process. Only T was dismissed.
Although the warning had expired by then, the company said it had lost confidence in T and that he obviously could not be trusted to follow the safety rules. T complained successfully that he had been unfairly dismissed.
The company argued that the key question was not whether the warning had expired but whether it had acted reasonably in all the circumstances.
T argued that it was unfair for the company to rely on the previous written warning to take more severe disciplinary action than it would otherwise have taken. He said that he was entitled to believe that the company was genuine when it said that the warning would expire in 12 months.
The Court of Session agreed with him. It pointed to the ACAS code of practice which states that a warning that is not subject to a time limit would normally be inconsistent with good practice.
Although this warning was for a fixed period, the company had acted as though it was still in force at his second disciplinary hearing. T had been entitled to assume that it would expire after 12 months. The company had acted unreasonably when it tried to extend the effect of the warning beyond that period.
Mr Webb was dismissed because he had been found washing his car when he should have been working. The company considered this to be gross misconduct and dismissed him summarily. He was reinstated on appeal and the sanction downgraded to a final warning which remained live for 12 months. Mr Webb was advised that if re-offended he would be taken through the formal procedure.
12 months and three weeks later, Mr Webb was found watching TV with four other employees when they should have been working. Following an investigation and a disciplinary hearing Mr Webb was dismissed summarily. The other employees who were also not working when they should have been were given a final written warning.
Mr Webb complained that he had been unfairly dismissed and that Airbus must have relied on an expired warning.
The Court of Appeal found that he had been fairly dismissed. Diosynth was a case where the expired warning ‘tipped the balance in favour of dismissal’, as the other factors taken together would not have justified dismissal. In those circumstances the expired warning was part of the set of facts that operated in the employer’s decision to dismiss. As the warning had ceased to have effect, it was not reasonable for the employer to rely on it as the deciding reason for the dismissal.
In this case, the employer had decided to dismiss Mr Webb principally because his offence fell into the category of gross misconduct and it can be fair to dismiss for an act of gross misconduct. His colleagues could have been dismissed, but the sanction was downgraded because of their previous good track records.
You need to clearly explain what the warning means, how long it will remain live on the file and what will happen if there is a repetition of the offence (or any other offence). Tell the employee verbally of your decision (even if your decision is to take no further action) and follow it up in writing.
Your employee should be in no doubt about what action is being taken under the disciplinary procedure. He must also be very clear about what he has to do to avoid further disciplinary action, and by when. Your letter should include
- What was included in the discussions
- Any agreements or admissions
- The disciplinary penalty, if any, and its duration
- The reason for the decision
- The actions being taken as a result of that decision
- The specific improvement required of the employee, if being warned, not dismissed
- The review period
- The right to appeal.
Note that difficulties can sometimes arise for employers where they wish to communicate a dismissal to an employee who is absent from the workplace (for example, because of sickness or absence without leave). The problems associated with dismissal by post were considered in the case of Gisda Cyf v Barrett.
Miss Barrett was informed that she had been dismissed by her employer by way of a recorded delivery letter. The letter informed her that she had been summarily dismissed for gross misconduct.
Miss Barrett lodged a claim for unfair dismissal with the Employment Tribunal, but the employer claimed that she was outside the three-month time limit for bringing a claim. The employer claimed that the date of termination was the date when the dismissal letter was written and posted. Miss Barrett claimed that it was the date that she actually opened the letter and became aware that she had been dismissed.
The Supreme Court has decided that where a dismissal is communicated by way of a letter sent to the employee at home, provided that the employee had neither gone away deliberately to avoid receiving the letter nor avoided opening it and reading it, the effective date of termination of employment – and thus the date from when the three-month time limit starts running – is when the letter is actually read by the employee, not when it is posted or even when it arrives in the post.
The lesson to take on board is that if it is important to the employer that it has a definite date for dismissal then communication of the dismissal person to person will be the best option.
Being specific about improvements
It is not enough to make vague comments such as ‘you must improve your attendance’. Be very specific in your requirements. Any warning letter must state clearly how much improvement you want to see and what standard of performance is required, together with an indication of the timescale that will be given for the improvement to take place.
The purpose of discipline is improvement. Generalities don’t work; you must specify exactly what improvements you expect to see. If you say that you’re only making 35 widgets an hour and everyone else is making 50 widgets an hour and we need an improvement, don’t be surprised if the widget-making increases to 37 an hour. You’ve got what you asked for but not what you wanted. There are various ways of specifying what’s needed, as the following examples illustrate.
- Percentages or ratios – ‘Your current absence rate is 22 per cent; the target is 8 per cent.’
- Frequency of occurrence – ‘You are to hold a weekly team meeting in order to improve communication in your section.’
- Averages – ‘You must achieve an average of 75 per cent of monthly sales target within three months. This will be reviewed on a monthly basis for the duration of this warning.’
- Time – ‘You must respond to call-outs within one hour in future.’
- Zero tolerance – ‘Any further conduct of this nature will result in further disciplinary action being taken.’
- Organisation standard – ‘You must achieve the XYZ target set and agreed at national levels.’