Allegations of misconduct in the workplace and unfair dismissal

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Most employers will have faced a situation where they have to investigate and potentially take disciplinary action in relation to allegations of misconduct against an employee. If the nature of the misconduct may warrant a dismissal, what questions should the employer ask and what tests will an employment tribunal apply if the employee brings a claim for unfair dismissal? Generally, employees can only bring such a claim if they have at least two complete years’ service with the employer at the time their employment is terminated.

Conduct is one of the five potentially fair reasons for dismissal (the others being capability, redundancy, statutory restriction and some other substantial reason). When establishing the fairness of any dismissal relating to conduct, the employer must be able to identify the conduct relied on and demonstrate that it is the reason for dismissal. It must have a genuine belief in the employee’s misconduct.

Turning to the issue of fairness, there is both a statutory test, and a test developed by case law. The statutory test, as set out in s.98(4) Employment Rights Act 1996, requires a tribunal to consider whether, having regard to the reason for the dismissal and circumstances of the employer, the employer acted reasonably. In order to reach a conclusion on this test, a tribunal will often ask: (a) did the employer undertake a fair investigation before deciding to dismiss? and (b) did the employer act reasonably in treating the misconduct as sufficient reason for dismissal?

As it is up to the courts to interpret the law, case law has developed around these questions, most notably in British Home Stores v Burchell, where the tribunal developed what has come to be known as “the Burchell test”. The Burchell test prescribes that, in order for a misconduct dismissal to be fair, the employer must have:

  1. Believed the employee to be guilty of misconduct;
  2. Had reasonable grounds for the above belief; and
  3. Carried out as much investigation as possible at the time it held the above belief.

Whilst this may be surprising to some, the above test demonstrates that a tribunal will not concern itself with whether the employee was actually guilty of the alleged misconduct. Instead, it will assess whether the employer believed, or had reasonable grounds to believe, that the employee was guilty of the misconduct at the time of the allegation. In order to have such a reasonable belief, the employer must have carried out a reasonable investigation (see point 3 above).

If the employer can pass this test, the tribunal will then consider whether the decision to dismiss the employee fell within the range of reasonable responses available to a reasonable employer. The test is objective and the outcome very much dependant on the facts and circumstances of each case. It involves the examination of any correspondence and documentation that is contemporaneous to the investigatory and disciplinary process that should have taken place.

When assessing the above, the courts will also have regard to principles of procedural fairness; the employee should be able to understand the case against them, know that there is a risk that they could be dismissed, is able to make representations and have the right of appeal. Employers should also bear in mind the ACAS Code of Practice on disciplinary and grievance procedures when dealing with cases of misconduct – if an employer follows this, it will likely go a long way to ensuring procedural fairness.

It’s clear that employers must act with care when considering dismissing an employee with at least two complete years’ service on the grounds of misconduct. Even in cases where an employee does not have the requisite length of service, it is still advisable to act with a degree of care to ensure the employer’s actions do not give rise to any other claims, such as discrimination.

In the case of employees with at least two years’ service, employers should always ensure that a fair process is followed and the above tests are complied with, even in cases where it appears that the alleged misconduct and its seriousness are not in doubt.  A failure to do so will put the business at risk of a successful unfair dismissal claim, which could lead to significant financial awards being made.

If you require any advice or assistance with any of the issues raised above, or any other aspect of employment law, please contact a member of Buckles’ employment team.