Our thoughts on the world of employment law - and beyond.

Misconduct investigations: when is enough enough?

According to BHS v Burchell, a dismissal for misconduct will only be fair where, at the time of the dismissal, the employer:

  • believes the employee to be guilty of misconduct;
  • has reasonable grounds for that belief; and
  • has carried out as much investigation as was reasonable.

So, this begs the obvious question: how much investigation is reasonable?  At the risk of giving the most infuriatingly unhelpful answer an employment lawyer can give to a client - it depends, each case will turn on its own facts.  There are, however, some guiding principles to bear in mind which include the following:

  • Where an employee has been effectively caught carrying out an act of misconduct, less investigation will be needed than in a case where there is no apparent objective proof. 
  • Consideration should be given to the seriousness of the alleged misconduct and the impact on the employee if the allegations are upheld.  If the consequences of finding that an employee has done a particular act of misconduct could include for example criminal, immigration or professional regulatory sanctions then an employer should investigate more thoroughly.
  •  The investigation should be even-handed - meaning that questions arising on both sides of the case may need to be looked into further.

In the recent case of Shrestha v Genesis Housing Association, the Court of Appeal confirmed that an employer does not have to investigate each line of an employee’s defence in order for the investigation to be reasonable.  Rather, the investigation should be considered as a whole when a tribunal is deciding whether or not it was reasonable.  In this case, following an audit, the employee was accused of making fraudulent mileage claims by inflating the distances he had driven to visit clients.  The comparator used was AA route-finder which provided distances that were (in some cases) half as long as the Claimant’s stated mileage.  A disciplinary investigation took place in which the Claimant’s mileages for the past year were checked, as were the distances given by the RAC, which were similar to the AA’s.  At a disciplinary hearing the Claimant argued that there were three reasons for his longer journeys: parking problems, one-way systems and diversions.  The employer dealt in detail with two particular journeys but did not go through the rest on the basis that there could not be a legitimate explanation for every one.  In relation to the defences, it found that: if the parking claim were made out, the journeys would have been longer than if the Claimant had simply walked from the office to begin with; AA route-finder takes into account one-way systems in its calculations; and diversions could not account for the mileage on every journey.

The Claimant was summarily dismissed for gross misconduct.  He appealed unsuccessfully and then brought claims for unfair dismissal and wrongful dismissal.  The Claimant argued that the employer’s investigation was unreasonable because it had not tried to recreate every journey to investigate his defences.  The tribunal disagreed, holding that the investigation by the employer was reasonable. The EAT and the Court of Appeal confirmed the tribunal’s approach, with the latter adding that, whilst an employer should consider all aspects of an employee’s defence, this does not mean they must all be investigated.  This case should be helpful to employers faced with the sometimes challenging task of deciding how far to go with an investigation. 

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