When is dismissal unfair?

11 April 2013
When is dismissal unfair?

If an employee commits misconduct, what happens next? Rebecca Lawton reports

The Problem
Recent press coverage concerning a McDonald's employee who was dismissed for gross misconduct after giving a paying colleague what was deemed to be "extra" chocolate flakes on a McFlurry ice-cream has highlighted the difficulty for employers to fairly dismiss employees for gross misconduct.

In this case, the employer had a "zero tolerance" policy on theft but does that mean it was fair for them to dismiss the employee on a first offence?

The Law Misconduct is one of five reasons on which an employer can rely to justify its dismissal of an employee. Employees can be dismissed as a result of a single event constituting gross misconduct, or as a result of a series of less serious incidents for which they have been warned that the consequence of any failure to improve may result in disciplinary action culminating in dismissal.

Employers need only have a genuine belief that the employee committed the misconduct; their belief does not have to be correct or justified. An employer seeking to rely on misconduct as grounds for dismissing an employee must be satisfied that: a) misconduct was the reason for their dismissal; and b) that it is reasonable to dismiss the individual in all the circumstances. The employer must then make the dismissal in a procedurally fair way.

Expert Advice It is essential that any allegations of misconduct (especially gross misconduct) are thoroughly investigated before any disciplinary action is taken. It is also essential that company disciplinary procedures are followed and that (as a minimum) employers comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures.

This process involves:

â- informing the employee in writing of the issues with their conduct
â- holding a disciplinary hearing, to which they are entitled to be accompanied by a trade union representative or a colleague
â- informing the employee of the decision in writing and allowing them a right of appeal against the decision.
Any failure to comply with the ACAS code may result in an uplift of up to 25% in any compensation paid to an employee who successfully claims unfair dismissal in an Employment Tribunal.

To ensure that a dismissal is fair, employers must be able to show that they believed that the employee was guilty of the misconduct, that they had reasonable grounds for that belief and that, at the time they held that belief, they had carried out a reasonable investigation.

Gross misconduct refers to the most serious types of misconduct which ordinarily comprise either deliberate wrongdoing or gross negligence, such as theft, violence, bullying, discriminatory behaviour, a serious breach of Health and Safety rules and bringing the company into disrepute.

Employers also need to ensure that they are reasonable in treating the misconduct as sufficient reason to dismiss. Even if theft is listed in a disciplinary policy as misconduct that warrants dismissal, it does not mean that any dismissal for theft will be fair. Employees will argue that there are various degrees of theft and that, for example, giving a paying colleague a few more chocolate flakes on their ice-cream is not the same as taking £50 from the till. Employers should ensure that employees are clear on their policies, what is considered to be gross misconduct and what constitutes theft in particular.

Even where an employee has committed an act constituting gross misconduct, when considering whether or not to dismiss them, employers should consider the individual's length of service and previous disciplinary history. It may be more reasonable to give a longstanding employee with an unblemished disciplinary record a final written warning, suspension without pay or a demotion, depending on the facts of the case.

Beware! An employee who successfully claims unfair dismissal can be awarded compensation of up to the statutory cap, which is £72,300. Employees who started employment before 6 April 2012 are required to have one year's service with their employer prior to bringing any such claim; however, employees taken on after 6 April this year need two years' service. Employees can also claim wrongful dismissal if they are unfairly dismissed without notice pay.

Checklist â- Ensure that the business's disciplinary rules are clear on what conduct is unacceptable and may lead to disciplinary action or dismissal. If you have a zero tolerance policy on a particular offence, this should be clearly set out within the policy and highlighted to employees.
â- Apply disciplinary sanctions for the same or similar offences consistently and investigate the seriousness of the misconduct in each particular case.
â- Consider if an alternative to dismissal may be appropriate in any given case of gross misconduct, having regard to the seriousness of the offence.

Contact Rebecca Lawton is an associate at Charles Russell LLP 

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