In the recent case of Stuart v London City Airport , the Employment Appeal Tribunal (EAT) reviewed the extent of an employer’s obligation to carry out a thorough investigation before dismissing an employee for dishonesty.
Under the provisions of the Employment Rights Act 1996, employees who have one year’s service (two years for employees who started their employment after 5 April 2012) have a right not to be unfairly dismissed. It is for the employer to show that the dismissal is for a potentially fair reason, and those reasons include conduct. However, in order for the dismissal to be fair in law, the employer must also follow a fair procedure. The requirements of a fair procedure were set out by the EAT in the long established case of BHS v Burchell  and require the employer to show that they believed the employee to be guilty of misconduct, had reasonable grounds for holding that belief, and at the time that it held that belief had carried out a reasonable investigation.
In Stuart, Mr Stuart was employed as a Ground Services Agent which was a position of trust. He entered a duty free store on the airport premises to buy some presents. He was holding the goods in his hands as he waited in the queue. Whilst in the queue he was directed by a shop assistant to another queue which he joined. Whilst in that queue, another member of staff beckoned him to come outside the shop to a seating area. As Mr Stuart was speaking to his colleague in the seating area he was apprehended by security staff for dishonestly taking goods from the shop without paying for them.
The company held a disciplinary hearing and dismissed Mr Stuart for gross misconduct. They relied heavily on the evidence of a store assistant who said that she saw Mr Stuart conceal the items under his coat before leaving the shop area. Mr Stuart vigorously denied this, but despite his denial, the shop assistant’s evidence was not challenged at the disciplinary hearing, the subsequent appeal or at the Employment Tribunal. The company also refused to interview the colleague of Mr Stuart who he claimed beckoned him to come outside the shop area to speak to him. They also refused to review CCTV of the area which would have assisted in determining the question of whether Mr Stuart did conceal the goods, and thus whether he was likely to be acting dishonestly.
The EAT allowed Mr Stuart’s appeal against a finding by the Employment Tribunal that the dismissal was fair. They held that where there was a serious allegation such as dishonesty against an employee, the company was under a duty to carry out a thorough investigation, and that would include investigating any realistic evidence from the accused which might help his case. The employer’s failure to do this led the EAT to the conclusion that the Tribunal’s decision that the dismissal was fair was unsustainable and perverse.
The message from this case is clear – where there are serious allegations against an employee, especially ones which call the employee’s integrity into question, the employer must investigate thoroughly, and explore any explanations put forward by the employee which may explain the alleged conduct.
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Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.