Fair dismissal for misconduct: pitfalls to avoid and best practice
Author: Esther Wilkins
Applies to: England, Wales and Scotland
In this article we look at how to dismiss an employee for misconduct fairly, in order to avoid a claim for unfair dismissal.
Misconduct is one of the five potentially fair reasons under the Employment Rights Act 1996 for which an employer may dismiss an employee. It is one of the most common reasons for employers to terminate the employment relationship.
When dismissing an employee with over two years of service for misconduct, the dismissal not only needs to be substantively fair, but must also be procedurally fair in order to avoid a successful claim for unfair dismissal.
Most employers will be familiar with the existence of the ACAS Code of Practice on Disciplinary and Grievance Procedures (the Code) which sets out best practice procedure for disciplinary matters, including disciplinary matters relating to misconduct. However, it is not uncommon for mistakes to be made in the process which risk jeopardising the fairness of a misconduct dismissal.
Although there is no direct penalty for failure to follow a recommendation of the Code, employment tribunals consider the Code as a benchmark when deciding whether or not a fair process was followed. If a tribunal rules that a dismissal was unfair, it can award an uplift in compensation of up to 25% where it considers that there was an unreasonable failure to follow the Code.
Key considerations for a fair dismissal:
- Substantive fairness: The decision to dismiss an employee must fall within the range of reasonable responses open to a similar employer in the same circumstances. For misconduct dismissals the employer must have a 'reasonable belief' that the employee committed the misconduct complained of and have carried out as much investigation as was reasonable in the circumstances to establish that belief. Establishing a reasonable belief does not mean that an employer must be able to prove definitively that an employee did or did not commit the relevant misconduct (there is no 'beyond reasonable doubt' test), but carrying out adequate investigation will be key.
- Investigations: The amount of investigation required will depend on the circumstances of each case. However, in the vast majority of disciplinary scenarios it is sensible for the employer to have a clear investigatory stage during which it designates a person responsible for the investigation, gathers documentary evidence and takes statements from any relevant witnesses. It will usually also be appropriate to speak to the accused employee to gather their evidence. Employers need to look at all the relevant evidence, including evidence that might exonerate the employee rather than only looking for evidence which supports the allegations of misconduct.
A different manager should be appointed to investigate from the manager who will be responsible for the disciplinary hearing. Only the very smallest organisations will be able to argue that their size and administrative resources allow them to have the same individual carry out both roles.
- The right to be accompanied: An employee has a right to be accompanied to a disciplinary meeting by either a trade union representative or a colleague of their choice. Provided the companion falls into one of these two categories the employer has no ability to interfere with the choice of companion. In exceptional circumstances, perhaps due to a disability or language difficulties, the employer can exercise discretion to allow an alternative companion such as a friend or family member.
- Inviting the employee to a disciplinary hearing: An employer should write to the employee formally inviting them to the disciplinary hearing. The employee should be given sufficient notice of the meeting to prepare their response (a week is usually recommended), details of the misconduct of which they are accused and any evidence gathered in the course of the investigation. The employee should be reminded of their right to be accompanied.
- Note taking: A common mistake employers make in respect of disciplinary processes is to fail to take minutes of, or adequate minutes of, investigation meetings, disciplinary meetings and, where applicable, appeal meetings. Ideally, a neutral observer, such as someone from HR, should be present to take notes. Minutes should be as full and accurate as possible and a copy should be sent to the employee for their review and comment so that there is an agreed record of events.
- Conducting the meeting: The employee should be asked to comment on the allegations and the evidence provided by the employer, in effect to give 'their side of the story' and to produce any other relevant evidence. The manager conducting the hearing should be clear about whether or not the employee is admitting to the conduct complained of or is challenging the allegations and/or evidence. Where the employee admits to the conduct, they should be asked if there are any mitigating circumstances the employer should take into account.
- Adjournments: A failure to follow up on evidence produced by the employee during a disciplinary meeting may jeopardise the fairness of a subsequent dismissal. If any further investigation is required, the manager chairing the disciplinary meeting should adjourn the meeting and refer the outstanding points for investigation back to the investigating officer.
- Consideration: Once the disciplinary hearing is complete, the manager needs to consider any further evidence which has been provided and reach a decision on the appropriate sanction. If the employee has admitted the misconduct the manager should consider any mitigating factors, such as a previously clean disciplinary record or long service. The manager should be satisfied that dismissal is an appropriate response to the misconduct and not too harsh a penalty. If the employee is denying the misconduct then it will be for the manager to carefully weigh the evidence and decide, on the balance of probabilities, whose evidence they prefer and why.
- Outcomes: The employer should confirm the outcome of the disciplinary meeting promptly and in writing. The communication should deal comprehensively with the disciplinary allegations, the evidence considered and the employer's decision on sanction (if any). This will include the rationale for reaching a decision to dismiss (if that is the decision). If the employee is dismissed, the outcome letter should deal with the administrative arrangements for the end of the employment relationship including any notice, holiday pay, return of property and the P45. It is important that the employee is given the right of appeal along with the contract details of the appeal manager and the time limit for submitting an appeal.
- Independent appeal: Where an employee appeals the decision to dismiss the appeal process should be managed, if at all possible, by a more senior employee than the person who made the decision to dismiss and who has not already been involved in the previous decision making in the disciplinary process.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.