And The Law Says

Unfair dismissal: the extent of reasonable investigation into misconduct

March 10, 2015


unfair dismissal

(Shrestha v Genesis Housing Association)

Mr Shrestha worked as a floating support worker for Genesis Housing Association Limited (Genesis), until his dismissal for gross misconduct. He used his own car to travel to see clients at their homes, and claimed fuel expenses for these travels by completing online claim forms.

Following suspicions about the size of his claims, an audit for a three-month period in 2011 showed that Mr Shrestha claimed for nearly twice the distances calculated from AA route-finder and the RAC website, and compared with his claims for a similar period the previous year.

During the disciplinary investigation and hearing, Mr Shrestha presented several explanations for the discrepancies, such as: difficulty in parking, one-way road systems, and road works causing closures or diversions.  Mr Shrestha was questioned about two individual journeys, but the employer did not investigate each and every journey because, the employer reasoned, every single journey went well above the mileage suggested by the AA and RAC, it was not plausible that Mr Shrestha could provide a legitimate explanation for all of these.  Mr Shrestha was summarily dismissed him for gross misconduct.

Mr Shrestha then brought employment tribunal claims for unfair and wrongful dismissal.  The tribunal held that Genesis had carried out a reasonable investigation as it was reasonable in the circumstances not to question every single journey where a discrepancy existed.  It did not agree that every single journey should have been recreated to investigate his claims that road works and parking problems had increased his mileage.

Mr Shrestha appealed first to the EAT and then to the Court of Appeal, arguing that the tribunal had failed properly to apply the Burchell test when considering the reasonableness of the investigation carried out by Genesis.  The employee argued on appeal that the employer should have, for example, contacted the local authority to inquire about road closures or the installation of new residents’ permit parking zones.  Apart from the fact that these arguments were not raised at the original hearing, the Court held that the employer was not required to do so.  The Court of Appeal unanimously dismissed the appeal, holding that while an employer should consider any defences presented by an employee, the extent to which it should investigate each line of a defence will depend on the circumstances of the case and the employment tribunal had correctly considered the legal test.

Richard Linskell Says: The three-part Burchell test provides that, in misconduct cases (1) an employer must actually believe the employee is guilty, (2) based on reasonable grounds, (3) having carried out as much investigation as was reasonable in the circumstances of the case.  This case confirms that in deciding what is reasonable, the tribunal must consider whether the employer’s actions fell within the range of reasonable responses of an employer acting reasonably and this applies to the investigation as much as to the decision itself to dismiss.

It can often be difficult to know how far to go when investigating an allegation of misconduct.  Employers should therefore be comforted that they do not necessarily need to address each and every point raised by an employee.  This will still be a judgment to be made by employers in each case but at least the range of response test means that a reasoned and considered approach by the employer as to the extent of the investigation is likely to be upheld.  Employers should record the reasons they have limited the scope of the investigation so they have evidence to show the tribunal.

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