November 8, 2014

Error in considering misconduct dismissal

The Claimant was employed initially by one company but, after a succession of different employers, he was employed by Uniqwin UK Limited. He was a shopping centre manager and on 4 bank holidays a year a market was held in the supermarket car park. His job was to collect the rents from the stall holders. When the new employer conducted an audit it found there was £400 deducted from the stall holders without authority, £200 of which the Claimant had retained for himself without any deduction of tax or national insurance contributions. He was dismissed for gross misconduct.

The Employment Judge held that he has been procedurally unfairly dismissed on the basis that the employer had withheld information which would have supported his case at the disciplinary hearing, including evidence that he did have authority from his original employer to retain cash payments, and that the person hearing his appeal against dismissal was not in possession of relevant evidence at the time. Furthermore the member of staff hearing the appeal was less senior than the individual who had held the disciplinary hearing and the Employment Judge found that this was a breach of the ACAS Code of Practice on Disciplinary and Grievance Procedures.

The appeal centred on whether the employer had carried out a reasonable investigation in the circumstances in respect of its belief that the Claimant had committed acts of gross misconduct. The EAT accepted the employer’s argument that a reasonable investigation was based on the conduct in question and that the Judge had not properly focused on the reasons for the employer’s belief in the Claimant’s guilt. The EAT accepted this argument, finding that the Employment Judge had identified failings in the investigation but these were not relevant to the dismissing manager’s reasonable and genuine belief in the Claimant’s gross misconduct. When the Employment Judge looked at the Claimant’s contributory conduct, he found that the Claimant had not disclosed to at least 4 subsequent employers after his original employer that he was in receipt of additional income which was not disclosed for tax purposes and which did not accord with the terms of his contract. These findings of fact were the basis of the employer’s belief in the misconduct.

The EAT also found that when the Judge had referred to the ACAS Code of Practice he was in fact referring to the ACAS guide which, of course, has no statutory force. The main point here is that ACAS recommend that, where possible, employers should utilise a more senior employee to hear appeals. Accordingly the EAT allowed the appeal and substituted a finding of fair dismissal.

This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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