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Gross Misconduct & Fair Dismissal

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Gross misconduct refers to conduct, actions or behaviour from an employee that is sufficiently serious to justify instant dismissal.

Responding to allegations of gross misconduct and taking disciplinary action against an employee is fraught with legal risk. While it may be instinctive in some circumstances to dismiss an employee immediately as a result of gross misconduct, this can expose the organisation to tribunal claims for unfair dismissal. In all cases of gross misconduct, employers must ensure they follow a fair and lawful procedure or any decisions resulting from the disciplinary are likely to be deemed unfair.


What is gross misconduct?

Effective disciplinary procedures should allow employers to deal with unacceptable or improper behaviour in the workplace fairly and lawfully while reducing the threat of grievances and tribunal claims.

While ‘ordinary’ misconduct is where an employee breaks workplace rules, such as persistent lateness, gross misconduct covers more serious acts or behaviours and as such, can warrant more severe disciplinary action, including dismissal without notice.

Gross misconduct has the effect of causing damage to the organisation or its reputation, or irreparably breaking trust and confidence in the employer/employee relationship. Examples could include theft, fraud, physical violence, damaging company property, bullying, health and safety breaches, incapacity in the workplace due to drugs or alcohol and serious insubordination. Organisations may also have their own specific rules on what constitutes gross misconduct, which should be detailed in the employee handbook or disciplinary policy.

What constitutes gross misconduct in the workplace is a common question and it refers to serious behaviour or conduct by an employee that falls below the expected standards and damages the contractual relationship between the employer and the employee.

In instances of gross misconduct, an employer may be justified in dismissing the employee without notice, known as summary dismissal, following a fair disciplinary process. As such, it is important for employers and employees to understand the difference between gross misconduct and ‘ordinary’ misconduct, and the potential disciplinary action that could result.

Gross misconduct can result from either a deliberate act or through the gross negligence of the employee. There may be variation in how employers define gross misconduct within their organisation, but as a general guide, the following are common examples of gross misconduct in the workplace:

Violent and offensive behaviour

Acts of violence and offensive behaviour such as aggressive or intimidating conduct, physical bullying and harassment or threats of violence are generally considered gross misconduct.

Theft and fraud

Theft and fraud, as fundamental breaches of trust and of the working relationship between the employer and the employee, are usually treated as gross misconduct. Examples could include stealing company stock or money or falsifying expense claims.

The employee may also face criminal sanctions as a result of any theft and fraudulent activity.

Illegal drugs or alcohol

Incapacity at work due to the consumption of alcohol or illegal drugs, buying or selling drugs while at work or possession of drugs in the workplace are typically deemed gross misconduct.

Damage to company property

Gross misconduct can include deliberate damage to property or damage caused through employee negligence.

Gross negligence

A serious lack of care either towards an employee’s duties or to other people, even where not deliberate or intentional, could be deemed gross misconduct by gross negligence. Generally, the degree of damage to the working relationship and any loss of trust and confidence resulting from the act of gross negligence will be the measure of whether gross misconduct applies.

Serious insubordination

Refusal to follow instruction to such a serious degree that it breaks the trust between the employer and employee could be considered gross misconduct.

Breaches of health & safety law

Employees are under a duty to cooperate with their employer on health & safety matters and to take reasonable care of the health & safety of themselves and of others who may be affected by their actions or omissions. Breaching health & safety rules may be deemed gross misconduct where it places the employee and others at risk of harm or injury by, for example, consistently refusing to follow company safety processes when operating machinery.

An organisation should state what it considers to constitute gross misconduct within its disciplinary rules and should also be clear on acceptable standards of behaviours and conduct within the workplace and the potential consequences where gross misconduct is established. This information should be made available to all employees, for example in the employee handbook or within a company disciplinary policy.

Employers are advised to regularly review their disciplinary policies and employee training to account for new and emerging types of gross misconduct such as cyberbullying and software piracy.

Dealing with gross misconduct

Beyond the discussion of what constitutes gross misconduct in the workplace is the issue of how to deal with the gross misconduct.

When handling a gross misconduct issue, the employer should follow a fair and lawful disciplinary procedure, to avoid giving cause for the employee to complain or bring a claim, and to minimise the impact on resources and employee morale.

In the absence of an internal disciplinary procedure, employers should follow the ACAS guidance on discipline in the workplace. Should the employee brings a claim for unfair dismissal, the tribunal will consider the disciplinary procedure followed against the ACAS guidelines and can uplift compensation by up to 25% where the employer is deemed to have failed to have met the requirements under the ACAS code.

It is not advisable to dismiss an employee instantly following an act of gross misconduct. Even in the most perceivably clear-cut of circumstances, a fair and lawful disciplinary procedure must be followed to prevent allegations of unfair dismissal.

For a gross misconduct dismissal to be considered fair, the employer must show they conducted a full and fair investigation into the gross misconduct. They have to show the employee has committed the gross misconduct and provide evidence they had reasonable grounds for believing this. The dismissal must also be considered a ‘reasonable response’ to the gross misconduct.

Before any disciplinary action is taken against an employee, employers are advised to first establish the facts. It is also advisable to cross-reference records of how the organisation has handled previous similar cases of gross misconduct to ensure consistency and fair treatment.

An investigation should be carried out into the allegations to establish what happened and to gather evidence. If the allegations are substantiated and disciplinary action is likely, the employer should write to the employee to invite them to a disciplinary hearing. In the letter, the employer should state the specific nature of the allegations of gross misconduct against them and the potential sanctions that could result. The employer should also provide the employee with all of the evidence that has been gathered.

During the hearing, you should discuss the allegations and the evidence, and allow the employee the opportunity to state their case. The employee has the right to be accompanied to the hearing.

Following the hearing, the employer should make a decision and communicate this to the employee in writing as soon as possible.

If disciplinary action is to be taken, the decision letter should also outline the process for the employee to appeal. Denying the right to appeal may be deemed unfair and provide grounds for a tribunal claim. For an appeal to be considered fair, it should be handled by an individual who was not involved in the initial investigation or disciplinary process.


How to deal with gross misconduct

Gross misconduct cases should be handled in accordance with the ACAS disciplinary code as a minimum, or in line with the organisation’s own disciplinary procedure if there is one in place.

The first step before making any disciplinary decisions or taking disciplinary action will be to investigate the allegations to gather sufficient evidence and establish the facts. In conducting a reasonable investigation, the employer should be looking to act quickly and thoroughly while minimising the impact and disruption to employees and the organisation. It will also be important that the investigation is carried out by an individual not involved in the matter and with experience in handling sensitive and complex personnel issues, such as an HR team member.

Failure to investigate in a fair and transparent manner could result in an appeal or unfair dismissal claim from the employee.

You will need to inform the employee of the investigation, but the timing may depend on the circumstances. Ordinarily you would notify the employee as soon as possible but you may delay this where there are reasonable concerns that the employee might adversely impact the investigation by for example influencing witnesses.


The disciplinary hearing

If the investigation establishes merit in the allegations, the next stage is to invite the employee to a disciplinary hearing.

Prior to the hearing, you should give the employee adequate notice of the date of the hearing to allow them time to prepare. When notifying, you should also provide the evidence resulting from the investigation, make them aware of their right to be accompanied and detail the specific nature of the allegations and the potential outcomes they are facing.

The employee has the right to be accompanied by either a work colleague, their trade union representative or an official employed by their trade union.

During the hearing, the allegations should be detailed and the evidence presented. Ensure contemporaneous notes are taken of the meeting.

The employee should be given the opportunity to put their case forward. This includes answering the allegations, calling pre-agreed witnesses and asking questions.

If new evidence is submitted by the employee, the hearing can be suspended and postponed while further investigations are conducted.

You should inform the employee of the decision in writing as soon as possible after the hearing, explaining the decision and informing of the right to appeal.

The final decision should give full consideration to the investigation and hearing outcomes and of what is fair and reasonable. Mitigating circumstances, previous conduct and disciplinary record can also be taken into account. While you can exercise discretion, it will be important to ensure consistency with previous decisions on similar issues of conduct.

Other disciplinary measures as reasonable and proportionate to the misconduct.

This could include a first or final written warning, demotion, redeployment or a period of suspension without pay. It is important when making this decision you ensure contractual terms are not breached and a fair process continues to be followed.

In some cases, it may be in the best interests of both the employer and the employee to consider a settlement agreement to bring the matter to a swift conclusion and to avoid any potential for a tribunal claim. Take legal advice on the circumstances as to the suitability of a settlement agreement, how to raise the suggestion and on negotiating the terms.


Suspending the employee

In some circumstances, employers may consider suspending the employee during the disciplinary process. This could be due to concerns about the investigation, or the impact on other employees. In such cases, suspension on full pay may be appropriate while you conduct investigations but it should be made clear that this is not a disciplinary measure and is no indication of the outcome of the disciplinary process.

Tribunal claims

Employees must have completed at least two years of service to be eligible to claim for unfair dismissal. The Employment Tribunal will consider in detail all the circumstances of the case, including the investigations carried out, the process followed by the employer, the information provided by the employer to the employee about the disciplinary procedure and potential sanctions.

The tribunal will also examine whether the employer’s response to the misconduct was reasonable. If the tribunal finds that no reasonable employer would dismiss the employee in these circumstances the dismissal will be deemed unfair.

There is also a risk of constructive dismissal claims where the employee resigns during a gross misconduct disciplinary procedure. The employee, again, must have a minimum of 2 years’ employment to be able to claim constructive dismissal.


Reducing the risk of tribunal claims

It is vital for employers when investigating gross misconduct to protect themselves by following a fair procedure that is ACAS compliant and considers the rights of employees. Failure to manage gross misconduct in a transparent and fair process can lead to costly and time-consuming tribunal claims, impacting both morale and reputation.

It is best practice for employers to have a comprehensive disciplinary policy that includes the process for dealing with gross misconduct and the consequences of gross misconduct.

The ACAS Code of Practice on disciplinary and grievance (ACAS Code) provides guidance for employers, and is used as the benchmark by the employment tribunal when assessing employers’ handling of any disciplinary matter. The tribunal has powers to increase awards for unfair dismissal claims by up to 25% where the employer is found to have fallen below the standard under the ACAS guidelines.

 

Need assistance?

DavidsonMorris’ employment lawyers are experienced in advising employers on all aspects of workplace disciplinaries and dismissals. We can support you with advice to ensure a fair and lawful procedure is followed and to minimise the risk of tribunal claims, and can support with developing and drafting an effective and compliant disciplinary policy. For guidance on misconduct and disciplinary issues, contact us.

 

Last updated: 2 November 2020 

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