Diosynth Ltd -v- Thomson

Section 98 of the Employment Rights Act 1996 gives employers five potentially fair reasons for dismissing someone. If that decision is challenged, it is up to tribunals to decide whether it was reasonable for the employer to dismiss, and then whether the dismissal was fair.

In Diosnyth Ltd -v- Thomson (IDS Brief 800), the Court of Session said that, when dismissing someone, it was not reasonable for employers to rely on a written warning that had expired. 

What was the background to the case?

Morris Thomson was employed by Diosynth from January 1996 to December 2001 as an operator in their factory in Fife, producing chemicals for big pharmaceutical companies.

The factory produced mainly raw chemicals and had an extensive safety training programme, which Mr Thomson had attended. He was taught, among other things, the safety risks of a process known as “inerting”. The company made clear that failure to follow the process was an act of gross misconduct.

Following an accident in November 1998, caused by an employee failing to inert a vessel, Mr Thomson gave a specific commitment to comply with the procedure at all times in the future. 

In July 2000, however, he 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. 

Following a fatal explosion at the plant in November 2001, it transpired that Mr Thomson had breached the procedure three more times in October and November 2001, and had falsified some documentation. 

Although the warning had expired by then, the company said it had lost confidence in him and that he obviously could not be trusted to follow the safety rules. He was dismissed in December and subsequently complained of unfair dismissal. 

What did the tribunals decide?

A majority of the tribunal said that, given the need for safety in the plant, dismissal was within the range of reasonable responses available to the company, and was therefore fair.

One tribunal member, however, said that the company had not been entitled to take the expired warning into account. And as it had not given Mr Thomson a final written warning, they said that the employer had failed to get across to him the seriousness with which it viewed the breaches of safety. 

Mr Thomson appealed to the EAT which agreed that he had been unfairly dismissed, given that the warning had expired. The company appealed to the Court of Session.

What did the parties argue?

The company argued that the key question was not whether the warning had expired but whether it had acted reasonably in all the circumstances.

The EAT had not taken all the relevant factors into account, including the fact that Mr Thomson had given an explicit undertaking to follow the procedure for inerting before he was disciplined. 

Mr Thomson, on the other hand, 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 was entitled to believe that the company was genuine when it said that the warning would expire in 12 months. The EAT was, therefore, right and the tribunal’s decision had been perverse. 

What did the Court of Session decide?

The Court of Session agreed with Mr Thomson. It pointed to para 15 of the Acas code of practice which stated that a warning that was not subject to a time limit would normally be inconsistent with good industrial relations 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. 

Mr Thomson 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.