Dismissal for misconduct: an employer's guide to decision making

Whether or not a dismissal will be fair depends on many factors. Employers need to carefully consider all of the circumstances before reaching a decision to dismiss to avoid successful claims against them.

Introduction

In the first of this three part series we look at the law of unfair dismissal and the factors that decision makers must take into account before deciding to dismiss an employee for the potentially fair reason of misconduct. We also consider when a lesser (or no) disciplinary sanction will be appropriate.

Tribunal statistics

While the number of accepted claims has fallen over recent years, primarily as a result of the introduction of employment tribunal fees, the government's latest statistics tables show claims appear to be on the increase again.

Claims for unfair dismissal are, and have always been the most common single claim brought. The government's latest statistics confirm that of those unfair dismissal claims proceeding to a full hearing, 46% were successful with a median award of £7,332 and a mean award of £13,851.

The law

It is for the employer to show the reason for any dismissal. The dismissal of a qualifying employee (an employee with at least two years' continuous employment service) will be unfair unless:

- the employer can show that the reason was one of five potentially fair reasons (i.e., misconduct, capability, redundancy, contravention of a statutory restriction or for some other substantial reason); and
- an employment tribunal finds that, in all the circumstances (including the size and administrative resources of the employer), the employer acted reasonably in treating that reason as a sufficient reason for dismissal.

The reasonableness of the employer's decision will be determined in accordance with equity and the substantial merits of the case. This is an objective test.

Overall, a decision to dismiss must be both 'procedurally' and 'substantively' fair.

The benchmark for procedural fairness is the ACAS Code of Conduct on Disciplinary and Grievance Procedures (the Code) which sets out behaviours that employers should adopt prior to dismissing an employee for misconduct (or poor performance).

A reasonable investigation is key to an employer's success here, and the famous case of British Home Stores Ltd v Burchell confirms that in order to establish the reason for dismissal in a misconduct situation, the employer must show that:

• it believed the employee to be guilty of misconduct 
• it had in mind reasonable grounds upon which to sustain that belief 
• at the stage at which that belief was formed on those grounds, it had carried out as much investigation into the matter as was reasonable in all of the circumstances

For the purposes of this series of articles we will focus on the often forgotten, or more unusual, factors that decision makers must remember to take into account before concluding that it is fair dismissal.

Substantive fairness involves an assessment by the tribunal of whether or not the decision to dismiss falls within the 'band of reasonable responses' available to a reasonable employer in similar circumstances. The well-known decision of the Court of Appeal in Foley v Post Office; Midland Bank plc v Madden makes it clear that a tribunal must not substitute its view of what it would have done in the same situation, but must simply assess whether the employer's actions fell within the permitted band.

Factors to take into account

Whether an employer acted reasonably or unreasonably in the circumstances is a question of fact for the employment tribunal to decide.

There is no statutory 'tick box' list available, but the following non-exhaustive factors may be taken into account when assessing the reasonableness of an employer's decision to dismiss in a misconduct situation:

• the employee's length of service 
• the nature of the employee's employment and their experience 
• the employee's general work record 
• the status of the employee 
• the employer's working environment 
• consistency of treatment / the penalty imposed in similar cases in the past 
• the nature of the misconduct involved, and whether it amounts to gross misconduct 
• the extent to which any company rules and procedures have been breached 
• whether the employee's conduct is deliberate or repeated 
• whether or not the employee has live disciplinary warnings on file 
• whether or not the employee was remorseful for their actions 
• whether the employer's actions were reasonable, particularly when dealing with a situation where an employee has refused a reasonable instruction 
• whether or not there are any mitigating circumstances which might make it appropriate to adjust the severity of the penalty

The ACAS Guide also suggests that employers should consider whether:

• the employer's rules indicate what the likely penalty will be as a result of the particular misconduct 
• the standards of the wider workforce are acceptable, and whether the employee is being unfairly singled out 
• any training, additional support or adjustments to the work is necessary

before deciding whether disciplinary action is appropriate and, if so, what form it should take.

Best practice

A disciplinary process should involve a thorough investigation, making sure the employee is fully aware of the case against them and then has the chance to respond to the allegations and put their own position/defence to the employer. If the employee raises issues which need further investigation then the disciplinary hearing should be adjourned to allow any necessary additional investigations to be carried out.
It is usually good practice for the manager conducting the disciplinary hearing to adjourn in order to consider the case fully before coming to any final decision. During that adjournment, the decision maker, with the support of their HR colleagues as appropriate, should consider all evidence and mitigating factors carefully, before determining what, if any, disciplinary action is appropriate.

In accordance with an employer's disciplinary policy and procedure, and the ACAS Code, the sanctions available will include:

• no disciplinary action
• a first written warning
• a final written warning
• dismissal, whether that be with notice or a summary dismissal (dismissal with no notice or pay in lieu of notice) for gross misconduct.

Next time

In future articles we will look more closely into the considerations of length of service, prior disciplinary records and expired warnings, the availability of alternative sanctions and mitigating circumstances.