In DLA Piper’s latest case report, the Court of Appeal held that an employer does not have the right to increase a disciplinary sanction on appeal unless it expressly provides for this option in its disciplinary procedure.
Disciplinary procedures in the NHS: the case law
McMillan v Airedale NHS Foundation Trust  EWCA Civ 1031 CA
The Court of Appeal held that, on the facts of the case, Airedale NHS Foundation Trust could not increase the severity of a disciplinary penalty following an appeal by its employee, Ms McMillan. Ms McMillan appealed against a final written warning administered by the trust. At the appeal hearing, the panel convened by the trust contemplated increasing the disciplinary sanction to dismissal because it viewed the disciplinary charges so seriously.
This increase was not permitted under the terms of the disciplinary procedure that applied to Ms McMillan. The Court, however, confirmed that an employer could, in principle, include a contractual right in a disciplinary process to increase disciplinary penalties on appeal.
Ms McMillan was employed as a midwife by Airedale NHS Foundation Trust and the disciplinary procedure that applied to her was incorporated into her contract of employment. It included details about the process to be followed and provided for one right of appeal against a warning or dismissal, with no further right of appeal.
Following a disciplinary investigation, the trust imposed a final written warning on Ms McMillan. She appealed against the decision. The trust advised Ms McMillan that the internal appeal panel would rehear the matter and this would include a review of the outcome “in terms of the sanctions applied”. The trust’s view was that the appeal panel had full control over the decision, including upholding, reversing, reducing or increasing the sanction.
The appeal hearing took place. Ms McMillan’s lawyers believed the hearing was deficient, but the trust denied their request for a full rehearing. The panel informed Ms McMillan that it was deciding on the sanctions previously imposed. The appeal panel advised Ms McMillan of its decision that she had breached the trust placed in her and that her employment was untenable. Ms McMillan withdrew her appeal to avoid the trust increasing the penalty against her to dismissal and applied to the High Court for an injunction to restrain the trust from doing so.
High Court decision
The High Court held that Ms McMillan’s contract with the NHS did not enable her employer to impose more severe sanctions. The contract did not clearly provide such a power, and to do so contradicted the Acas code of practice on disciplinary and grievance procedures, which was referenced in the trust’s disciplinary processes. Seeing as the appeal was the sole and final right of appeal, if the sanction was increased, Ms McMillan would have no appeal against her dismissal, which would be a breach of the Acas code. The trust appealed.
Court of Appeal decision
The Court of Appeal dismissed the trust’s appeal. It found the right to appeal granted by the trust against a warning or dismissal existed to benefit the employee, not to allow the employer to continue the disciplinary process and make it more severe. The Acas code included within the trust’s process clearly stated that an appeal must not result in an increased sanction.
The trust argued that in a rehearing a more serious charge might be made out and it would then be compelled to start a new disciplinary procedure if it was not entitled to increase the original penalty.
The Court of Appeal observed that, where a contractual disciplinary process is breached, employees may have the possibility of getting an injunction, but otherwise there is potentially no remedy, given that the test for unfair dismissal is on substantive and procedural fairness, rather than a strict contract test.
Implications for employers
The lesson for employers is that they may reserve a right to increase a disciplinary penalty on appeal if this is done expressly and transparently. However, if such a right is included, it would be strongly advisable (and in accordance with the Acas code) to permit a second right of appeal, rather than confining an employee to a single right of appeal.
A key principle of the Acas code is that employers should allow an employee to appeal against any formal decision made. Employers should also be reminded that disciplinary procedures may be incorporated into the employee’s contract and must be followed.