Perrys Motor Sales Ltd v Edwards

Where a conduct dismissal relies on an extant final written warning, the tribunal must assess fairness under section 98(4) of the Employment Rights Act 1996. It must ordinarily treat the warning as valid unless its validity is properly put in issue and there is a basis, under Wincanton, for finding it was issued for an oblique motive or was manifestly inappropriate.

A tribunal must not decide the case by introducing matters not raised by the parties or by substituting its own view for that of the reasonable employer. Mitigation may nevertheless take even a gross-misconduct dismissal outside the range of reasonable responses.

The Claimant, a service manager, was dismissed after entering an incorrect completion date on a warranty claim. The employer relied on the conduct and on an extant final written warning for similar conduct.

The Ashford Employment Tribunal upheld his unfair-dismissal complaint. It held that the earlier warning was unjustified, took account of an alleged absence of detailed induction following the employer's acquisition of the business, and found the dismissal outside the range of reasonable responses. It reduced the awards by 50 per cent for contribution.

The employer appealed. The central issues were whether the Tribunal could revisit the final warning and rely on matters not in issue, whether dismissal was necessarily fair, and whether the parties should have been heard on Polkey and contribution.

1. Appeal allowed. The Tribunal's finding of unfair dismissal could not stand. The case was remitted for a complete rehearing before a differently constituted Employment Tribunal.

2. Under section 98(4) of the Employment Rights Act 1996, the final written warning was a relevant circumstance in assessing the employer's reason for dismissal. The Claimant had neither appealed it nor put its validity in issue in the proceedings. The Tribunal therefore erred by independently investigating the basis of the warning.

3. The Tribunal also applied the wrong approach to the warning. Following Wincanton Group plc v Stone, it could not hold that the warning should have been a lesser warning merely because that would have been within the range of reasonable responses. It had to ask whether the warning was invalid because it was issued for an oblique motive or was manifestly inappropriate, lacking good faith or prima facie grounds. Its error prevented a proper assessment of dismissal against a valid final warning.

4. The Tribunal further erred by treating the absence of detailed induction into operating procedures as material when the Claimant had not contended that he did not understand those procedures. Taken with its treatment of the warning, this showed substitution of its own view for that of the reasonable employer and undermined its conclusion on fairness.

5. The conclusion that dismissal was unfair was not, however, necessarily perverse. A tribunal applying the correct test could consider whether pressure, unavailable promised assistance, management conduct and a deficient investigation of mitigation took dismissal outside the range of reasonable responses. That remains possible even where conduct amounts to gross misconduct.

6. Although unnecessary to the outcome, the Tribunal also acted contrary to natural justice by deciding contribution and, by implication, Polkey without allowing submissions after it had declined to receive them. Justice required rehearing before a different Tribunal because the errors went to the heart of the original approach.

• Employment Appeal Tribunal: Allowed the employer's appeal and remitted the unfair-dismissal claim for rehearing before a different Employment Tribunal.
• Ashford Employment Tribunal: On 3 August 2015, with reasons sent on 1 September 2015, upheld the Claimant's unfair-dismissal complaint and reduced his basic and compensatory awards by 50 per cent for contributory fault.