Termination of Employment Due To Custodial Sentence

Termination Of Employment Due To Custodial Sentence


What does it mean for an employer if one of their employees is convicted of a crime and sent to prison?

In most cases, employers will jump straight to dismissal, terminating the employee’s contract, not least because the employee will no longer be available for work, but also due to associated issues such as bringing the company into disrepute.

However, as with all dismissals, employers must proceed with care and ensure they are meeting their obligations in terminating any contract of employment fairly and lawfully or risk the employee bringing a tribunal claim against them.

The following article provides employers with some best practice advice on termination of employment due to an employee receiving a custodial sentence.


What are an employer’s options if an employee has been sent to prison?

If an employee has been sent to prison, the employer’s options will depend on factors such as the nature of the offence and duration of the sentence, and the employee’s situation in general. Potential courses of action could include:

  • Taking disciplinary action against the employee, with the potential outcome of dismissing them.
  • Taking disciplinary action against an employee with the potential outcome of imposing a lesser disciplinary sanction.
  • Taking no disciplinary action, but instead keeping the employee’s job open for them pending their release from prison.


Employers are advised to approach the matter with caution and to take the time to consider the specific circumstances before making a decision on the next steps.


Dismissal due to custodial sentence or new criminal conviction

Faced with this scenario, most employers will at least consider the possibility of dismissal, given that any offence for which an employee has been handed a custodial sentence is likely to impact the employment relationship and risk bringing the employer into disrepute — especially where a conviction has been widely reported in the press.

Under the Employment Rights Act 1996, fair reasons for terminating an employee’s contract of employment include:


Being convicted of a criminal offence in itself can amount to ‘misconduct’, even if the offence was committed away from work or outside working hours. This is because the scope of misconduct as a potentially fair reason for dismissal is not strictly limited to conduct in the course of, or within the scope of, employment. The commission of any offence serious enough to warrant a custodial sentence could be considered a breach of company policy or, in any event, capable of seriously damaging an employer’s reputation.

The nature of the offence can also compound the seriousness of the misconduct, for example, where a person who works in a position of trust, including handling money for a business, is found guilty of a dishonesty offence, such as fraud or theft. In these circumstances, the employee would no longer be considered suitable to continue in their role or undertake the responsibilities required. Equally, a person found guilty of a violent crime or sexual assault may no longer be deemed suitable to work within the employer’s business, where the nature of their conviction could seriously impact working relationships with colleagues or clients.

In other cases, such as where the employee works with children or young adults, having a criminal offence can give rise to ‘a statutory restriction that prevents employment continuing’. If the employee is found guilty of a serious driving offence resulting in the loss of their licence, this would also prevent them from continuing in their role.

Finally, being unavailable for work because the employee is incarcerated in prison, and therefore unable to perform the contractual duties required of them, is likely to fall under either ‘capability’ or the statutory catch-all category of ‘some other substantial reason’.

As such, an employee being sent to prison could constitute fair grounds for dismissal, provided the employer acts reasonably in dismissing the employee for that reason and a fair process is followed.


Legal risks for employers

Where an employee has been imprisoned, many employers wrongly assume that this will automatically justify dismissal. However, provided an employee has accrued at least two years’ service, the law on unfair dismissal means that a thorough investigation and examination of the available facts should be conducted before a decision to dismiss is taken.

Even though the employer can, in most ‘custody’ cases, easily establish a fair reason to dismiss, they must still act reasonably in dismissing the employee for that reason and follow a fair dismissal process — including where an employee is guilty of gross misconduct. This is misconduct so serious that it justifies summarily dismissing an employee, ie; without notice or pay in lieu of notice, although summary dismissal is not the same as instant dismissal. For any dismissal to be fair, regardless of how serious the misconduct is, this must first be investigated and a reasonable procedure followed before reaching any decision.

Where a criminal offence is committed in relation to something that has occurred at work or in the course of the individual’s employment, the employer would be entitled to treat this as a serious misconduct matter. This is because the commission of an offence during working hours would amount to a fundamental breach of the implied duty of mutual trust and confidence between the employer and employee. The situation is slightly more complicated where the conviction is related to an incident that took place away from the workplace and is entirely unconnected to the person’s employment. In these cases, consideration must be given by the employer as to the circumstances surrounding the offence, and how the employee’s conviction and incarceration impacts their employment and the business as a whole.

In cases where there is no adverse connection between the commission of the offence and the employment in question, the key factor for consideration is whether the conduct and period of custody will have a significant bearing on the employment relationship and other working relationships. The fact that an employee has been convicted of an offence serious enough to warrant imprisonment, and that they will be unavailable to work for the duration of their sentence, is usually but not necessarily sufficient reason to terminate their employment.

Criminal conduct that results in a custodial sentence for an employee can also potentially frustrate an employment contract, bringing it to an end automatically. This is because the requirements of the contract cannot be fulfilled. However, the possibility of frustration generally applies to lengthy custodial sentences, so cannot always be relied on by an employer in justifying a decision to dismiss in the context of shorter prison sentences.


Failure to follow a fair dismissal procedure

Even where termination of employment in the event of a custodial sentence can be clearly justified, the manner in which that decision is reached must still be fair and reasonable in all the circumstances. The importance of a fair procedure here cannot be underestimated.

In the case of Harvey v Vista Hotels Ltd (ED002/15), the employee succeeded in a claim for unfair dismissal even though he was imprisoned for a period of 18 months for grievous bodily harm. This incident took place on staff accommodation but the employee was off duty at the time. Following his sentencing, Mr Harvey was dismissed by the hotel.

The tribunal found that even though the employee’s actions constituted a potentially fair reason for dismissal on grounds of misconduct, the dismissal was still unfair because the hotel had failed to follow a proper procedure. Prior to dismissing Mr Harvey, there was no attempt to interview him in prison to ascertain his version of events, or speak to any witness or otherwise investigate what had happened. The employee only learned of his dismissal six months later. The employer claimed to have sent a termination letter to prison, but no copy of this letter was located. This meant the employer was unable to demonstrate that they had notified Mr Harvey of their decision to dismiss or offered him any right of appeal.

In finding for Mr Harvey, the employment tribunal was persuaded that the absence of any disciplinary process with no right of appeal didn’t fall within the band of reasonable responses that are open to an employer in justifying the fairness of a summary dismissal. Given the seriousness of the employee’s conduct in this case, this decision may come as a surprise to many employers, but the tribunal’s judgment highlights the importance of following a fair disciplinary and dismissal procedure, even in cases of clear gross misconduct.


How to dismiss an employee who has been sent to prison

Many employers will already have in place a written disciplinary procedure, although the Acas Code of Practice on disciplinary and grievance procedures advises employers to:

  • Deal with issues promptly, without unreasonably delaying hearings, decisions or confirmation of those decisions
  • Act consistently when making disciplinary decisions
  • Carry out any necessary investigations so as to establish the facts of the case
  • Inform employees of the matters being investigated and give them an opportunity to put their case in response before any decisions are made
  • Allow employees to be accompanied at any disciplinary hearing
  • Allow an employee to appeal against any disciplinary decision made.


An employer may need to make a number of adaptations to their normal disciplinary process due to the employee’s imprisonment. This could include visiting the employee in prison to take a statement of their version of events whilst on remand. Even if an employee has already been convicted and sentenced, the employer should still seek the employee’s side of the story, as there could be mitigating factors that may impact the employer’s decision-making.

Only once the employer has fully investigated the matter and listened to what the employee has to say should a final decision be made as to whether or not to dismiss them. This decision should not focus solely on the fact that the employee has been imprisoned, but rather the employer should consider all the surrounding circumstances before deciding whether or not to dismiss an imprisoned employee, including whether a lesser sanction might be appropriate.

In making any final decision, the employer should take into account:

  • the nature of the offence committed
  • the length of the sentence, bearing in mind that offenders normally serve only half
  • the role performed by the employee and the relevance of their criminal conduct
  • the impact the conviction has on the employee’s continued suitability for that role
  • the impact the conviction may have on the organisation and its’ reputation
  • the impact the conviction has on relations with co-workers, clients and customers
  • the employee’s previous track record and employment history
  • the nature and extent of any mitigating factors
  • the nature and extent of any safeguarding steps that can be taken to prevent any reputational risk or damage to working relationships
  • the effect of the employee’s absence on the business.


This list is not exhaustive, but includes some of the most important factors that must be considered by an employer on termination of employment in the event of a custodial sentence. Each case will need to be decided on its own set of facts, for example, if the employee is imprisoned for a short period of time, for an offence that’s unrelated to their work, it may be reasonable for the employer to hold the employee’s job open pending their release.

Even in cases where the conviction and period of incarceration has a significant bearing on the employment relationship and the employer’s business, such that dismissal is unavoidable, the employer must still follow a fair process and provide a right of appeal. If an employer acts with total disregard for any disciplinary procedure or the Acas Code of Practice, regardless of the fact that an employee is in prison, a tribunal is likely to find that any dismissal is unfair.


Need assistance?

DavidsonMorris provides specialist employment law advice to employers on all aspects of workforce management, including disciplinary and dismissal procedures. Through our fixed-fee advisory service, Triple A, employers enjoy unlimited access to employment law advice from a dedicated lawyer to help protect the best interests of your organisation while minimising legal risk. For expert advice, contact us.


If an employee is sent to prison: employer FAQs

Can an employee be terminated immediately?

Employment can be terminated without notice or pay in lieu of notice for gross misconduct, but this does not mean dismissal can be instant. There should first be a full and fair investigation before making a decision to dismiss.

On what grounds can an employee be dismissed?

An employee can be lawfully dismissed on grounds of either conduct or capability, by reason of redundancy, any statutory restriction that prevents the employment from continuing or for some other substantial reason that justifies dismissal.

Last updated: 24 June 2023


Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.

She is a recognised by Legal 500and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.

Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals

About DavidsonMorris

As employer solutions lawyers, DavidsonMorris offers a complete and cost-effective capability to meet employers’ needs across UK immigration and employment law, HR and global mobility.

Led by Anne Morris, one of the UK’s preeminent immigration lawyers, and with rankings in The Legal 500 and Chambers & Partners, we’re a multi-disciplinary team helping organisations to meet their people objectives, while reducing legal risk and nurturing workforce relations.

Legal Disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct at the time of writing, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

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