Employment law clinic: No 15 Unfair dismissal

THECHALLENGE: HR manager David has been informed that Alex is appealing
against his dismissal. Alex is alleging his manager, Tim, did not investigate
his case properly. Alex has threatened to go to an employment tribunal, if
necessary. But Tim reports Alex had been using his company credit card to buy
personal items and Alex has admitted this. What should David do?

Legal issues

The company must make sure it dismissed Alex for a fair reason (here,
misconduct, allegedly), and that it followed a fair procedure. It is also clear
from decisions such as Whitbread plc v Hall, 2001, IRLR 275 CA, that in a
misconduct case an employment tribunal may still analyse the procedure even in
cases where the misconduct has been admitted.

On the facts of that case, although Mr Hall admitted financial
irregularities, the dismissal was unfair because despite being within the
reasonable range of responses for that offence, the disciplinary process was
fundamentally flawed. In particular, the same individual had carried out the
investigation into the misconduct and conducted the disciplinary hearing.

The company also needs reasonable grounds for its belief that the employee
has committed the misconduct. It must, therefore, investigate. If an employee
admits he has committed the misconduct, there is nothing to be served in carrying
out further investigation (Boys and Girls Welfare Society v McDonalds, 1996,
IRLR 129). However, it is crucial to be clear about the extent of that

It is tempting, especially where financial irregularities are admitted, for
the employer to treat that as gross misconduct but the recent EAT case of OHR v
Possante EAT/0905/00, illustrates the dangers in this.

Here, Possante was a restaurant manager at a hotel. He was dismissed after a
stocktake showed a drop in the normal levels of wine held in the cellar. The
wine had been sold and he admitted that the proceeds had gone into his personal
bank account.

However, Possante appealed and his previous manager at OHR gave evidence
that they had agreed to replenish the stock by selling the wine and buying
replacement bottles from the bar at retail prices. The money was resting in his
account because of problems with the hotel safe.

The tribunal had found that OHR had made no effort to fully investigate the
circumstances, as it believed Possante’s admissions meant no further enquiry
was necessary. The EAT agreed. The procedure used by Possante may not have been
in accordance with OHR’s policies but a proper investigation would have showed
there was no dishonesty.

If there are problems in the procedure that has been followed, it is
possible for the appeal to cure those defects if it is a comprehensive
re-hearing, rather than just a review of the initial decision (Byrne v BOC Ltd,
1992, IRLR 505).

HR issues

The employer must investigate how the matter has been dealt with so far. It
should have been handled in accordance with the company’s disciplinary
procedures. It needs to ask if there was a proper investigation. Did the
employee’s manager conduct the investigation? If so, there will be problems as
in the Whitbread case (above). It is, however, possible for a full appeal heard
by a more senior manager who has had no previous involvement, to cure this
defect if handled properly.

The employer should also look at the company’s policies on expenses and use
of credit cards. If Alex has not followed it, the employer needs to find out if
there is a reasonable explanation why. If Alex has admitted using the credit
card for personal items, but that he intended to repay the money on the basis
that this is a practice that has been condoned by management before, it will
not be possible for the company to treat that as an admission of gross

The company should consider refresher training for managers involved in
disciplinary issues. Further, if it is clear company policy on credit card use
is not being adhered to, the message of policy compliance must be reinforced
among management.

Staff also need to be clearly informed that departures from the policy will
no longer be acceptable. If the company wishes to be in a position to take
action against misuse of company property, it will have to show that employees
knew what was expected of them and that it has acted consistently.

By Sarah Lamont, partner at Bevan Ashford

Comments are closed.