Can an Employer Increase a Disciplinary Penalty Following an Appeal?

Most people are aware that any fair disciplinary procedure will provide an employee with the opportunity to appeal against any sanction, such as a written warning. Sometimes, the person or panel dealing with the appeal might not only agree with an original finding of misconduct, but might also think that the sanction that has been applied is too lenient and wish to increase it. But can they do that?

This issue has just been considered by the Court of Appeal in a case called McMillan v Airedale NHS Foundation Trust. An employee had originally been issued with a final written warning, but the appeal panel wanted to consider dismissal.

In that case, the disciplinary procedure was silent as to whether a sanction could be increased on appeal. The High Court refused to imply that there was such a power, as that would be inconsistent with the right to appeal, which was intended as a benefit for the employee. An injunction was granted preventing the Trust from reconsidering the penalty.

The Court of Appeal agreed with that decision. In doing so, it was observed that the non-statutory Acas Guide ‘Discipline and grievance at work’ (which is separate from the statutory Code of Practice – Disciplinary and Grievance Procedures) expressly states that an appeal should not result in an increase in penalty as this may deter employees from appealing.

That said, it was further noted that there is nothing wrong in principle with an employer reserving to itself the right to increase a disciplinary sanction on appeal, but that right must be expressly provided for in the relevant procedure.

The lesson for employers is that if they wish to reserve the right to increase a sanction following an appeal, they should expressly reserve the right in their disciplinary procedures, and any separate performance capability procedures, to do that. Lanyon Bowdler’s template disciplinary and performance capability procedures, which are carefully drafted and kept under review to ensure that they provide maximum flexibility for employers, already include such a provision.

If an employer increases a sanction to dismissal following an appeal without having expressly reserved the power to do so, it is likely to render the dismissal unfair if the employee has the necessary minimum 2 years’ continuous service. To increase a sanction to a level which is short of dismissal might, depending on the circumstances, result in an employee resigning and succeeding with claims based on constructive dismissal.

To emphasise, even if the power is reserved to increase a sanction on appeal, it does not automatically follow that it will be reasonable and fair to do so. We would always encourage employers to obtain advice before implementing any disciplinary or appeal process with a view to minimising the risk of disputes and liabilities.

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