Simmonds v Milford Club

When a previous disciplinary warning is material to the fairness of a later dismissal, an Employment Tribunal should ordinarily treat it as valid. However, where the facts give real cause to consider that the warning may have been manifestly inappropriate, the Tribunal must investigate the relevant circumstances and decide that issue. The threshold is higher than the ordinary test of whether the dismissal fell within the band of reasonable responses. The Tribunal should consider the employer’s disciplinary procedures and whether the sanction was appropriate for the conduct proved. A failure to undertake that inquiry is an error of law where the warning was determinative of the dismissal’s fairness.

Mr Simmonds appealed against a majority decision of the Employment Tribunal dismissing his claim for unfair dismissal. The Tribunal found that the Respondent had reasonable grounds for concluding that he breached an instruction by paying employees’ Christmas bonuses in cash, although it had not established a separate breach of confidence.

The dismissal would not have been found fair without a final written warning issued after an earlier incident involving the banking of the club’s takings by the Claimant’s wife. The Tribunal divided on whether that warning could be taken into account. The majority considered that the Claimant should have known that the arrangement was wrong; the minority considered that the absence of adequate instructions or induction made the warning inapplicable. The central issue was whether the Tribunal had properly scrutinised the appropriateness of the earlier sanction.

Appeal allowed. The Employment Tribunal had erred in law by failing to consider whether the final written warning was manifestly inappropriate, even though that warning was determinative of its conclusion that the subsequent dismissal was fair.

1. A previous warning should not ordinarily be revisited when assessing a later dismissal. The Tribunal may nevertheless examine the warning where there are grounds to question whether it was issued in good faith, whether there were prima facie grounds for it, or whether it was manifestly inappropriate. The approach derives from Stein v Associated Dairies Limited [1982] IRLR 447, as explained in Co-operative Retail Services Limited v Lucas EAT/145/93.
2. The phrase manifestly inappropriate imposes a high threshold. It is more exacting than the ordinary fairness test applicable to the dismissal itself. The Tribunal should not conduct a detailed factual inquiry merely because it might have reached a different view about the warning.
3. Where the facts give the Tribunal cause to consider that a material previous sanction may have been manifestly inappropriate, it should hear evidence and decide whether it was. That inquiry includes the factual background and the employer’s own disciplinary procedures. A sanction outside the level indicated by those procedures may raise a concern that it was manifestly inappropriate.
4. Here, the Tribunal recognised that the earlier warning was essential to its decision but did not examine whether the sanction was consistent with the applicable disciplinary procedure. The case was remitted to the same Tribunal, if practicable, to determine that limited question and then reconsider the fairness of the dismissal.

• Employment Tribunal: By a majority, dismissed the Claimant’s unfair-dismissal claim in a decision sent on 13 January 2012.
• Employment Appeal Tribunal: Allowed the appeal and remitted the case to the same Employment Tribunal, if practicable, for determination of whether the final written warning was manifestly inappropriate and reconsideration of fairness.