February 25, 2015

Misconduct dismissals – how far does the employer have to go to investigate the employee’s defence?

Investigating employees' defence

In a recent case, an employee, Mr Shrestha, was required to travel to see clients. His employer, Genesis Housing, became suspicious that the amount he claimed for certain journeys in 2011 was far higher than the amount he claimed for the same journeys the year before and, at 197 miles, far in excess of the recommended AA route-planner estimate of 99 miles. Genesis Housing concluded that this amounted to a potential deliberate expenses over-claim and started a disciplinary process.

During the disciplinary proceedings Mr Shrestha put forward various explanations: that for the various journeys concerned he had difficulty in parking, that there were confusing one-way road systems, and road works causing closures or diversions. The disciplining manager decided that it was implausible that each journey was above the recommended mileage, the explanations did not stack up to account for all journeys, and he dismissed these explanations with little further investigation. Mr Shrestha was dismissed for gross misconduct.

This claim went all the way to the Court of Appeal, to determine the extent to which a ‘reasonable investigation’ requires the employer to investigate each line of defence put forward by the employee.

The court accepted that an employer is not necessarily required to personally investigate each line of defence; what an employer must do instead is to carefully consider the explanations provided. In some cases it may then be necessary to investigate further but, as the court agreed in this case, it will not always be necessary to do so. Here, there was proven excess mileage and Genesis Housing was entitled to find Mr Shrestha’s explanations inherently implausible. Accordingly the employer was not required to telephone the local authority about resident’s parking bays, or ask the Highways Agency about road closures.

Practical tips for misconduct investigations

  1. Make sure that you carefully consider any explanation put forward by an employee for the conduct in question.
  2. Consider whether further investigation is needed to determine the plausibility of the explanation, or whether the explanation is inherently implausible. If it is implausible, explain why this is the case in the decision taken.
  3. If further investigation is required, it may be reasonable to ask the employee to provide some evidence to back up their account – but particularly for a larger employer it may be necessary to investigate the account provided by the employee, for example by interviewing other employees or contacting third parties.
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