An employee Gross Misconduct as stated under Section 98(2) of the Employment Rights Act 1996 (ERA 1996), may lead to a dismissal. In a recent case of Shrestha v Genesis Housing Association Ltd [2015], the EAT held that the employer carried out a reasonable investigation into alleged misconduct for an employee dishonesty.

Mr Shrestha, worked for Genesis Housing Association Limited and was entitled to travel expenses for visits to clients. After a 3 months audit held in 2011 on the employee’s claims, it was found that the employee had over-claimed travel expenses fraudulently and as a result he was dismissed. Subsequently, Mr. Shrestha issued a claim at the tribunal for unfair dismissal and wrongful dismissal.

The Employment Appeal Tribunal in this case emphasised the judgment in British Home Stores Ltd v Burchell [1978] that a dismissal is consider to be fair, if the following elements are fulfilled (‘the Burchell Test’):
• The employer is convinced that the employee committed the alleged misconduct;
• Such findings of misconduct have been based on reasonable grounds; and
• The employer carried out as much investigation as reasonably possible according to all the circumstances of the case.

In relation to the third element of the Burchell Test (the reasonableness of the investigation), in Shrestha the Court of Appeal ruled that is the investigation as a whole was sufficient and that the employer did not need to investigate every element mentioned by the employee in its defence.

This case, despite the positive outcome for employers, has highlighted the importance of undertaking full investigations into allegations of misconduct of employees. In addition, employers may wish to take actions to ensure that an investigation would not be put into question in an Employment Tribunal, for example, by properly documenting and recording investigation results and ensuring objectivity in the investigation. This can be achieved by having a different person be responsible for the disciplinary process to the person who may have been a witness to the alleged misconduct. These actions would assist in the prevention of a Tribunal finding that an investigation was insufficient or finding that a dismissal was indeed unfair.
For further information, please contact Koichiro Nakada – Head of Japan Business Group (koichiro.nakada@lewissilkin.com) and Yoko Nakada - Senior Associate, Deputy Head of Japan Business Group (yoko.nakada@lewissilkin.com).
Disclaimer
The information and any commentary on the law contained in this bulletin is provided free of charge for information purposes only. No responsibility for its accuracy and correctness, or for any consequences of relying on it, is assumed by Lewis Silkin LLP or Centre People Appointments. The information and commentary does not, and is not intended to, amount to legal advice and is not intended to be relied upon. You are strongly advised to obtain specific, personal advice from a lawyer about your case or matter and not rely on the information or comments in this bulletin.

This information is supplied by Lewis Silkin LLP www.lewissilkin.comm

Article top