Posted By Paul L Williams
I thought this case (Diosynth Ltd v Morris Thomson, 2006) which was
recently heard in the Court of Session would be of interest to you at a
number of levels:
Background
* An employee commits (for the second time) a serious, life-
threatening breach of safety rules and is dismissed. The dismissal is
held to be unfair.
* This decision of the Court of Session (affirming the Employment
Appeal Tribunal) must come as a surprise to many of our readers. The
case hammers home a very important point for employers and their
advisers; despite the gravity of a matter, a dismissal can be ruled
unfair if the employer fails to operate a fair procedure. It also
provides guidance on making sure that procedures recommended by the
Disciplinary and Grievance Code of Practice are followed. All references
to a Code are to the version published in 2000, this being the one in
force at the material time
The facts
The employers were part of the pharmaceutical division of a
Netherlands-based company employing some 66,000 people world-wide and
170 at their factory at Fife. They produce chemicals for use by major
companies in the pharmaceutical industry. Not surprisingly safety is a
key issue (the risks of an explosion or leakages was an ever-present
hazard) and the employers operated a highly developed training programme
for every employee. One safety procedure was known as "inerting"; it
involved removing air from a vessel and checking that the valves were
closed. The employer's disciplinary procedures provided that:
"A serious breach of safety rules, potentially involving loss of life or
limb, and flagrant failure to follow company documentary procedures and
regulation, will be treated as acts of gross misconduct."
In June 2000 an accident took place and an investigation revealed that
the applicant had been guilty of a failure to inert; he had also
falsified documentation to conceal his breach. There then followed a
disciplinary hearing at which the applicant was given a written warning
and a three day suspension. The warning stated that "in future it is
expected that you will adhere in detail to all safety, health and
environmental procedures". Then came the critical sentence: "This letter
will remain on your record for a period of twelve months."
There was a further incident in November 2001 and on this occasion it
was revealed that a failure to inert was much wider than the employers
had realised. The applicant himself had been guilty of this (and
document falsification) on three occasions in October and November. The
management decided that, in the light of the earlier warning, the
applicant could no longer be trusted and he was dismissed. An internal
appeal having failed, the applicant brought proceedings for unfair
dismissal.
The tribunal was split. The majority ruled that the company had
considered the stale warning as just one factor in the relevant history
of events and, in all the circumstances, the dismissal clearly fell
within the band of reasonable responses - a view which many would agree.
The minority member thought otherwise. The employers had not been
entitled to consider the warning at all, because it had expired.
Further, the warning had not been drafted as a final written warning.
Accordingly a reasonable employer would not have dismissed the employee
but would have issued a final written warning (if necessary supplemented
by enhanced supervision). This is difficult to reconcile with the facts;
the employee was fully aware of his duties and the serious consequences
of a breach. At the 2001 disciplinary hearing he said that he had learnt
his lesson from the events of 2000 and that the latest incident was an
isolated occurrence (which was not true).
One could be forgiven for saying that the minority decision was perverse
but the Employment Appeal Tribunal reached exactly the opposite
conclusion. A decision to dismiss, which took into account the lapsed
warning, was unfair and `"to hold otherwise would be perverse". Not
surprisingly, counsel for the employers strongly attacked this approach
when the case reached the Court of Session. He argued that the EAT had
treated the stale warning point as an issue of absolute principle,
whereas s.98(4) of the Employment Act 1996 (which has already been
considered in no less than 187 cases) merely requires the tribunal to
decide whether the employer acted reasonably in all the circumstances of
the case when deciding to dismiss. Faced with the decision in William
Grant & Sons Ltd v Devlin, unreported, EAT March 25, 2004 (reliance on a
stale warning makes a dismissal unfair) he was constrained to argue that
this case had been wrongly decided.
The Court of Session, upholding the finding of unfair dismissal, pointed
to the central weakness of the employers' case - namely the evidence
that they themselves had given to the tribunal. It was clear from that
evidence that the stale warning was not merely one factor among others.
It was the crucial factor; if the warning had not been given the
employee would not have been dismissed. The court referred to the
solicitor case of Bevan Ashford v Malin [1995] I.R.L.R. 360 which
confirmed that written warnings would be strictly construed contra
proferentem. They also referred to the ACAS Code of Practice 1
Disciplinary and Grievance Procedures 2000 which states that a warning
should normally lapse after a specified time, and that is fundamental to
good industrial relations practice (see para.15). A peiod of twelve
months is suggested. The relevance of the Code is to be found in s.270
of the Trade Union and Labour Relations (Consolidation) Act 1992 which
provides that "if any of the provisions of the ACAS Code of Practice is
relevant to a question arising in proceedings before an employment
tribunal, those provisions shall be taken into account by the tribunal
in determining that question". In Lock v Cardiff Railways Company Ltd
[1998] I.R.L.R. 358 Morison J, giving the judgment of the EAT, stated
that the Code formed the basis on which employers' conduct should be
judged and should be used by employment tribunals as a guide to good
sound industrial relations. The case was remitted to the employment
tribunal for a remedies hearing.
Practice points
1.The above statement in the Code that a warning should be time limited
is qualified by the word "normally". Practitioners should always
consider whether the facts justify a departure from that rule. The
instant case appears to be a classic example. The employer's common law
duty to take reasonable care for his employees' safety includes a duty
to provide competent fellow workers. One wonders whether a decision not
to dismiss would have exposed the employers to an action for damages if
the employee had then committed another breach resulting in injury or
death.
2. The points made in the previous paragraph are not affected by the
changes made by the Employment Act 2002 and reflected in the updated
Code which came into force on October 1, 2004 (SI 2004/2356) - but make
sure that all disciplinary and grievance procedures are in line with
those recommended in the updated Code.
3. A warning should be clear and unambiguous and the employee should be
left in no doubt that further breaches or misconduct can result in his
or her dismissal.
4. All employer clients should be advised to seek advice before
dismissing an employee. A telephone conversation with advisers can be a
valuable and cost-effective use of management time.