September 26, 2013

Undue dismissal will damage your company

Have you ever dismissed an employee unfairly, with damaging and costly repercussions to your company?

While there are a number of reasons this might happen, it often comes down to a poor investigation process – and a lack of understanding about it.

Most probably know that, when an employee is charged with a disciplinary offence, you must follow the legal procedure to the letter.

Employees are entitled to put their case across and employers should conduct a reasonable investigation into the alleged offences, in light of the employee’s account and the specific circumstances of the case.

Following this, if the employer still believes that the employee has committed the offence, then an appropriate sanction must be determined. This must not be ‘outside the range of reasonable responses’ bearing in mind the specifics of the case in question.

Employment Lawyers will be aware that these principles are derived from the case of BHS Ltd v Birchall, a case from 1980 which was re-approved by the Court of Appeal in the 2003 case of Sainsbury v Hitt.

In my experience, where employers are found to have been unfairly dismissed an employee, it is most likely to be because of a failure in the investigative process.

Of course there are a number of reasons why it might be found to be unfair but certainly investigative flaws tend to be high up the list.

In many ways it is easy to understand how this can happen. Often it can be difficult to remain completely objective when managers are asked to investigate issues that they are already close to. For this reason it is always beneficial to get independent input as to the relevant evidence which ought to be considered.

In addition to this, people independent to the situation can often posit the obvious, but essentially necessary questions. Sometimes the obvious is easy to overlook if you’re too close in the first place.

These issues are clearly important where dismissal is a potential outcome. But where the employee is working in an industry covered by professional regulation such as teaching, the care sector, nursing, financial services for example, employers ought to be extra careful.

Indeed in any profession in which the disciplinary allegation could have a detrimental impact on the employee’s professional standing the employer should tread very carefully.

There are 2 connected but equally important reasons:

1. The Court of Appeal confirmed in the case of Salford Royal NHS v Roldan the “heavy responsibility on an employer to conduct a fair and thorough investigation when allegations have been made which could affect an employee’s reputation and ability to work in his or her chosen field.”

The Court of Appeal also reaffirmed that in these types of cases the allegations may be of a criminal nature and may involve polarised disputes as to the facts of a particular incident. It is imperative, when the potential consequences are so serious, that every effort is made to investigate all relevant evidence in an sensible and even-handed manner. This may involve re-interviewing witnesses rather than simply taking a written statement at the start of the process.

Employers are also encouraged to bear in mind the fact that often it will not be possible to completely resolve any disputes as to the facts of a case.

In some circumstances, it might be perfectly proper for an employer to say that they are not satisfied that they resolve the conflict and therefore do not find the disciplinary case to be proven.

This does not necessarily mean that they disbelieve the complainant, but that the evidence has not allowed the employer to come down on the side of one party or another.

Where sufficient safeguards are not put in place, the Employer can expect little sympathy from an Employment Judge or Tribunal.

2. The second reason why these matters are important is that the effect of the disciplinary sanction can make the subsequent claim for unfair dismissal much more valuable.

Take the teaching profession for example. The dismissal of a teacher for gross misconduct for allegations of improper conduct of some sort or other will inevitably result in a referral to the teacher’s professional body and potentially the disclosure and barring service.

It is highly likely that, if the dismissal was found to be unfair because the investigation had not been sufficiently thorough, the employee would have a very lengthy claim for loss of earnings because the nature of the disciplinary allegation would clearly impact on their attractiveness as a candidate for alternative work.

So, we can see that it is potentially double trouble where the initial investigation is flawed in these cases. It is more likely to be held to be unfair and that, having been found, it is much more likely to be a very expensive mistake.

Employers are encouraged to take independent advice throughout the process to avoid these potentially costly errors.

Stuart P. Morley

LLB (Hons).

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