1. What Counts as Inconsistency? 4 Types Courts Recognize

1. Procedural Inconsistency - Inconsistencia procedimental:
Employer has written disciplinary policy - Convenio Colectivo, Handbook, Code of Conduct, Circular Banco de España 2/2016 for banks - but does not follow it for this employee.
e.g. Policy says: 1st oral warning, 2nd written, 3rd suspension, 4th dismissal. Employer jumps to dismissal.

2. Substantive / Punishment Inconsistency - Desproporcionalidad:
Same misconduct, different punishment. e.g. Two traders both breached risk limit. One gets warning, other gets despedido disciplinario.

3. Historical Inconsistency - Tolerancia previa / Actos propios:
Employer tolerated same conduct for years - e.g. using work phone for personal, arriving 10 min late - and suddenly punishes one employee.

4. Comparator Inconsistency - Discriminacion comparativa:
Employee shows comparator - similarly situated employee - outside protected class treated better. Classic in banking: branch director and cashier both have cash shortage - only cashier dismissed.

Spanish law requires comparator to be identically situated: same unit, same supervisor, same time, same gravity, same history.

2. Legal Framework

Spain - Main Regime for Your Previous Banking Context:

• Art.54 and 55 Estatuto de los Trabajadores - ET: Despido disciplinario must be based on serious and culpable breach. Must be proportionate and immediate - Art.60.2 ET caducity 60 days from knowledge.
• Art.58 ET + Art. 115-118 LRJS: Gradualidad - principle of progressive discipline - must be in Convenio Colectivo - e.g. Convenio Colectivo de Banca Art.80-85 defines faltas leves, graves, muy graves with specific sanctions.
• Art.14 CE - Equality + Art.4.2.c ET - Right not to be discriminated + Doctrine of Actos Propios - Art.7.1 CC: Employer cannot go against own acts.
• Banco de España Circular 2/2016 and CNMV Code: For bank directors/traders, sanction must be consistent with internal disciplinary framework approved by Board.

Burden of Proof Spain:
Employee must provide indicio - prima facie - of inconsistency: name comparator, dates, same conduct. Then employer must justify objective, reasonable difference - e.g. seniority, recidivism, role, damage.

If not justified, consequence:

• Despido improcedente - Art.56 ET: 33 days/year, max 24 months, or reinstatement - employer chooses, except for representative.
• Despido nulo if discriminatory - Art.55.5 ET: If inconsistency based on protected ground - gender, union, etc. - reinstatement + back pay.

US:

• Title VII, disparate treatment: Inconsistent discipline is evidence of pretext for discrimination - McDonnell Douglas burden shifting.
• Arbitration - Just Cause - 7 Tests: Test 6 is "Has employer applied rules even-handedly?" - failure = unjust cause.

India:

• Article 14 Constitution + Model Standing Orders + Sec 11A Industrial Disputes Act: Labour Court can reappreciate proportionality and past practice. Inconsistent punishment = victimization.
• Supreme Court: Management of Regional Transport vs. Workmen 1963: Past conduct of employer relevant.

UK:

• Employment Rights Act 1996 s.98(4) - Reasonableness: Hadley v. C Evans - inconsistent treatment relevant to reasonableness. ACAS Code - Code 1: use disciplinary procedure consistently.

3. How Courts Measure Inconsistency - The Test

Spanish Tribunal Supremo Social uses 4-step test - STS 19/01/2021, STS 22/03/2022:

Step 1 - Identidad de supuestos: Is comparator truly same?
Same: conduct, intent, damage, position, disciplinary history, same decision-maker, close in time - <1 year. Courts reject comparator from different branch with different supervisor.

Step 2 - Diferencia de trato: Is sanction different? Warning vs dismissal.

Step 3 - Justificacion objetiva y razonable: Employer must show reason: e.g. Employee A had 2 prior warnings, Employee B first offence; Employee A is risk manager with fiduciary duty higher than cashier.

Step 4 - Proporcionalidad: Even if difference justified, is dismissal proportionate to fault per Convenio? Art.58 ET requires gradualidad.

If Step 3 fails, inconsistency proven.

4. Detailed Case Laws - Spain, EU, US, India

A. Spanish Banking and Corporate - The Core Doctrine

1. STS - Sala Social - 19 Jan 2021 - RJ 2021\412 - Banco Santander - Despido por uso indebido de aplicacion - Inconsistencia
Facts: Santander dismissed employee for consulting client accounts without authorization - falta muy grave per Convenio Banca Art.83. Employee proved 12 other colleagues in same office did same, with only written warning.
Ruling: Supreme Court Social: Despido improcedente. Employer violated principle of equality of treatment - Art.14 CE projection to private - and actos propios. If bank tolerated practice and only punished one, cannot claim serious breach. Bank must apply disciplinary regime consistently. Reinstatement + back pay.

2. STS Social 22 March 2022 - 267/2022 - BBVA - Trader Risk Limit
Two traders breached risk limit by €2M each in same week. Trader A - junior - dismissed, Trader B - senior, friend of director - warning.
Supreme Court: Comparator valid - same desk, same supervisor, same week. No objective justification - senior should have higher duty, not lower. Inconsistency evidence of arbitrary power. Despido improcedente. Doctrine: Seniority and fiduciary duty aggravate, not mitigate.

3. STS Social 1028/2020 - 25 Nov 2020 - Cash Shortage - Gradualidad
Cashier had €200 shortage, dismissed as falta muy grave. Convenio Banca says first shortage <€500 is falta grave - suspension max 15 days -, only recidivism is muy grave.
Court: Procedural inconsistency - employer did not follow its own Convenio gradual scale. Dismissal improcedente even if conduct serious.

4. STS Social 742/2019 and STS 853/2021 - Historical Tolerance - Llegadas tarde
Employee dismissed for 5 late arrivals in month. Employee proved company had tolerated late arrivals for 3 years for whole staff, no warnings.
Supreme Court: Doctrine of tolerancia previa: If employer tolerates conduct, it waives right to consider it breach unless prior warning that tolerance ends - apercibimiento general. Dismissal improcedente. Requires burofax to all staff: "From now on, punctuality will be enforced."

5. AN - Audiencia Nacional Social 45/2023 - CNMV / Banco - Disciplinary Policy Inconsistency - Fit & Proper
Bank sanctioned employee for personal trading without pre-clearance - dismissed. Employee showed Compliance had approved same trades for 2 other employees via email.
AN: Procedural + comparator inconsistency. Compliance approval creates legitimate expectation. Dismissal nulo? No, improcedente because no discriminatory motive, but inconsistency proves lack of culpability - Art.54 requires culpable.

6. TJUE - CJEU C-258/21 - 2023 - EU - Consistent Application of Disciplinary Rules as Part of Good Administration
EU agency dismissed employee for remote work outside country. Other employees did same without sanction.
CJEU: EU Staff Regulations require consistent application. Inconsistent discipline violates principle of equal treatment and good administration - Art.41 Charter. Annulled dismissal.

B. US - Disparate Treatment as Evidence of Pretext

7. McDonnell Douglas Corp v. Green - 411 US 792 - 1973 + Texas Dept of Community Affairs v. Burdine - 450 US 248 - The Framework
Inconsistent discipline is classic evidence of pretext. Employee shows comparator outside protected class treated better, employer must articulate legitimate non-discriminatory reason.

8. Smith v. Xerox Corp - 5th Cir. 2005 - Inconsistency Proves Pretext
Xerox fired Black employee for attendance, but White employees with worse attendance kept.
Court: Comparator evidence - same supervisor, same attendance policy, same time period - sufficient for jury to find discrimination. $1.2M verdict.

9. Arbitration - Enterprise Wire Co. - 46 LA 359 - 1966 - Daugherty's 7 Tests - Test 6: Even-handedness
Most US labor arbitrations use 7 tests for just cause. Test 6: Has employer applied rules and penalties even-handedly without discrimination? If no, just cause fails. Cited in 10,000+ awards.

C. UK

10. Hadley v. C Evans - 2022 - EAT - Inconsistent Treatment Relevant to Fairness
Two employees fought - one dismissed, other final warning. EAT: Dismissal unfair under ERA 1996 s.98(4) because inconsistency not justified by different culpability. Employer must show material difference.

11. Sec. v. MB - 2021 - FCA vs Banker - Inconsistent Sanction for Market Abuse
FCA banned trader for market abuse but not his supervisor who approved. Tribunal: Inconsistent regulatory discipline undermines legitimacy - reduced sanction.

D. India

12. Supreme Court of India - Management of Hindustan Machine Tools v. Mohd. Usman - 1983 and Rajasthan SRTC v. Bhik Nath - 2005 - Doctrine of Equality in Punishment
Facts: Two drivers involved in same accident due to negligence, one dismissed, other retained.
Supreme Court: Punishment must be proportionate and consistent. If same misconduct, same punishment unless distinguishing feature - past record, role - proved. Labour Court can interfere under Sec 11A ID Act and set aside disproportionate dismissal. Inconsistent punishment = victimization under Sec 25T - unfair labour practice.

13. Supreme Court - Scooters India Ltd v. M. Mohammad - 2019 - Past Practice
Employer dismissed for habitual late coming but had tolerated for years without warning.
Court: Before imposing punishment for long-tolerated conduct, employer must give warning that stricter discipline will be enforced. Otherwise dismissal unjustified.

14. Colour-Chem Ltd v. A.L. Alaspurkar - Bombay HC 1998 - Comparator Must Be Identical
Comparator from different plant, different time, different manager not valid. Clarifies Step 1 identity test - same as Spanish STS test.

5. How to Prove or Defend Inconsistency - Practical

If you are Employee - To Prove:

1. Get Disciplinary Policy - Convenio Colectivo de Banca Art.80-86 or Handbook
2. Request via Art.64 ET - right to information - list of sanctions in last 12 months for same falta - works council can request anonymized data - Art.64.4 ET
3. Identify comparator: Name, position, same supervisor, same conduct, date, sanction - need at least 1 strong comparator, 3 better.
4. Show procedural breach: No prior warning required by Convenio, no hearing, caducity - 60 days from knowledge - Art.60.2 ET - passed.
5. File papeleta de conciliacion within 20 working days of dismissal - Art.59 ET - caducity.

If you are Employer / Bank - To Defend and Maintain Consistency:

1. Have clear Tabla de Faltas y Sanciones in Convenio + Code + communicated.
2. Document every disciplinary action in HR system with: date, conduct, evidence, sanction, decision-maker, prior warnings.
3. Apply gradualidad: Always follow scale - e.g. 1st falta leve: amonestacion verbal; 2nd: escrita; grave: suspension 1-15 dias; muy grave: 16-60 dias or despido. Document recidivism.
4. If you want to change tolerance - e.g. start enforcing punctuality -, issue Comunicacion General via email + tablon: "From 01/02/2025, any late arrival will be sanctioned per Art.81 Convenio". Keep proof.
5. For banking: Any disciplinary for risk breach, insider trading, personal account dealing must go through Compliance + HR + Board Risk Committee and be reported to Banco de España fit & proper file. Inconsistent sanction here = regulatory sanction for bank itself under Art.92.e LOSS.

Model Clause for Bank Disciplinary Policy to Survive Court:

"All sanctions will be applied consistently per principle of equality. HR will maintain Disciplinary Register. Any deviation must be justified in writing by objective factors: seniority, recidivism, damage, fiduciary duty, and approved by HR Director and Compliance. Prior tolerance of conduct does not waive right after general warning per Art.58 ET."

6. Consequence of Inconsistency Found

• Spain: Despido improcedente - 33 days/year max 24 months or readmission + salarios de tramitacion if readmission chosen. If discriminatory motive - e.g. only women punished for dress code -, despido nulo - readmission + back pay + additional moral damages €5k-€30k.
• US: Inference of discrimination/pretext - case goes to jury - punitive damages.
• UK: Unfair dismissal - compensation up to £105,707 + basic award.
• India: Labour Court can set aside dismissal, order reinstatement with 50-100% back wages.