Davies v Sandwell Metropolitan Borough Council

The Court of Appeal dismissed the appeal and upheld the Employment Tribunal's conclusion that the employer was entitled to take a prior final written warning into account when deciding to dismiss the claimant for later misconduct. The court applied the statutory reasonableness test in section 98(4) of the Employment Rights Act 1996 and endorsed the established common law principle that a prior final warning may be relied upon provided it was issued in good faith, there were at least prima facie grounds for it, and it was not manifestly inappropriate to issue it.

The court emphasised that Employment Tribunals are not generally to re-open earlier disciplinary decisions or treat a historic warning as a nullity except in exceptional circumstances (for example, where there is bad faith, an oblique motive, or manifest inappropriateness). The ET had made relevant findings of fact on good faith, prima facie grounds and manifest inappropriateness and did not err in law in treating the warning as a circumstance a reasonable employer could take into account.

Background and parties: The claimant, a teacher employed as Second in Science at Willingsworth High School, was dismissed by Sandwell Metropolitan Borough Council following an investigation and disciplinary hearing into alleged misconduct between November 2005 and February 2006. The Council had previously issued the claimant with a final written warning on 10 February 2005 arising from alleged misconduct in October 2004; that warning was to remain on the record for 24 months and an appeal against it was commenced but not pursued to a conclusion.

Procedural posture: The claimant brought an unfair dismissal claim before the Employment Tribunal (ET). After a lengthy first hearing the ET dismissed the claim (judgment March 2009). The matter was remitted and reheard; the ET again dismissed the claim (judgment August 2011). The Employment Appeal Tribunal (EAT) dealt with procedural and limited legal grounds and on 21 March 2012 rejected the claimant's appeal. Permission to appeal to the Court of Appeal was granted on a single ground concerning whether a final written warning should be treated as a nullity where the employer deliberately did not consider evidence that might have shown no misconduct.

Nature of the claim and issues: The claim was for unfair dismissal. The central issue before the Court of Appeal was the legal role of a prior final written warning in a later dismissal for misconduct while the warning remained in force, specifically whether the ET should have treated the earlier warning as a nullity because the employer allegedly declined to consider evidence that, objectively viewed, might have shown no misconduct.

Court's reasoning: The Court began with the statutory test in Part X and section 98(4) of the Employment Rights Act 1996: the tribunal must determine whether, in all the circumstances, the employer acted reasonably in treating the reason for dismissal as sufficient. The court endorsed the principle from Stein v Associated Dairies Ltd and Tower Hamlets Health Authority v Anthony that an employer may rely on a prior final warning provided it was issued in good faith, there were prima facie grounds for imposing it and it was not manifestly inappropriate. The court clarified that the ET's role is not to re-open the earlier disciplinary decision unless exceptional circumstances exist; instead the ET must assess whether a reasonable employer could properly have treated the prior warning as a circumstance relevant to dismissal.

Application to facts: The ET had made findings of fact that the final warning had been issued in good faith, that there was a substantial body of evidence supporting it and that it was not manifestly inappropriate. On that basis the Court concluded the ET did not err in law in regarding the warning as valid for the purposes of the later dismissal and that the dismissal was within the band of reasonable responses.

Wider comments: The court also emphasised the need for proportionate case management in Employment Tribunals, warning against allowing irrelevant evidence to lengthen hearings and the importance of tribunals exercising their case management powers to focus on relevant issues.

Appeal dismissed. The Court of Appeal held that the Employment Tribunal had not erred in law: a prior final written warning may properly be taken into account when deciding to dismiss for subsequent misconduct provided it was issued in good faith, there were at least prima facie grounds for it and it was not manifestly inappropriate. The ET had made findings of fact on those points and applied the statutory reasonableness test in section 98(4); it was not the ET's function to re-open the earlier disciplinary sanction except in exceptional circumstances.

Claim first heard by the Employment Tribunal (initial 24 day hearing Sept–Dec 2008; judgment sent 23 March 2009). Case remitted and reheard at the ET with judgment sent 4 August 2011. The Employment Appeal Tribunal considered an earlier appeal and remitted limited issues; the EAT later rejected the claimant's appeal on 21 March 2012. Permission to appeal to the Court of Appeal was granted on a single point and this Court delivered judgment on 26 February 2013 ([2013] EWCA Civ 135).