Competing on misconduct

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Mark Stevens, a senior associate in the employment team at VWV, explains how disciplinary processes can be rendered useless if the correct procedures aren’t followed

An employer might want to take disciplinary action against an employee for any one of a number of reasons. However, as a recent employment law case has highlighted, it is important for employers to have clearly defined disciplinary procedures in place, and then to follow them when dealing with acts of potential misconduct. As a recent case has shown, a disciplinary process can fail wrong if proper procedures are lacking.

The facts
Tony Jones had been an employee of Electrical Supplies (Anglesey) Ltd (ESAL), a small business with only three employees, for 18 years. ESAL was a member of Sirius Building Group, through which it was able to obtain deals and advantageous prices from manufacturers and wholesalers. One of Jones’ duties was to monitor the business email account, and as a result he opened an email which contained details of an advertising competition for Sirius Group members. The prize for this was a promotional GT race day at Bedford Autodrome, valued at £1,300-£1,500. The competition was open to Sirius members and, although it was ESAL which was the member and not Jones, he assumed that he could enter – which he did – and he was subsequently selected as the winner. He did not attempt to cover up the fact that he had won the competition, although he did not discuss it with his bosses.

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When Jones’ bosses found out about his win, they suspended him on full pay and informed him that he had been dishonest by entering. To do so, they argued, without their permission amounted to theft, as he had tried to claim a benefit that ESAL was entitled to. Jones denied that he had acted dishonestly, claiming that he genuinely believed that he was not doing anything wrong by entering the competition. Jones had some annual leave which he was due to go on, and the day before his annual leave his bosses informed him that he was suspended and that he would be contacted in due course. It was nearly four weeks until Jones received any communication from ESAL. As a result, Jones, who had recently become a father, began to get very concerned about his job security, terminated his contract and accepted a lower paid job with a local builders’ merchant.

Duty of mutual trust and confidence
There is an implied term in all employment contracts that employers and employees have a duty of mutual trust and confidence. If this duty is breached, the innocent party can claim that this is a fundamental breach of the employment contract. If an employer breaches the duty, the employee can terminate their employment by reason of the employer’s conduct under the Employment Rights Act 1996, and they may then have grounds to bring a claim against the employer in the Employment Tribunal for wrongful dismissal.

To bring a claim for constructive dismissal, the employer must be in ‘repudiatory breach’ of a term of the contract. This means a breach that is so fundamental, it goes to the root of the contract. The employee must then show that they resigned in response to the relevant breach. The breach can be a singular act or it can be made up of a number of acts or events which accumulate over time, leading to the ‘final straw.’

Mr Jones therefore brought a claim against ESAL for, amongst other things, constructive dismissal, as he argued there had been no need in the circumstances to suspend him and an investigation could have been carried out without doing so.

Employers should have a disciplinary policy which clears sets out the course of action they will take if an employee is suspected of acts of misconduct. This policy does not have to be part of the employment contract but it should be in a separate document which employees are all referred to when they start their employment. In the majority of cases, if an employer needs to carry out an investigation into an employee’s conduct, the employee should be able to continue working for the employer, even if adjustments should be put in place. Suspension should not be a ‘knee jerk’ reaction and employers should only suspend if there has been a serious allegation of misconduct which means that it would be impossible for the employee to continue in their role whilst the allegations are being investigated.

If it is necessary to suspend an employee, the employee should be sent a letter which includes the reasons why they were suspended and how long it is expected to last, their rights and obligations during the suspension and a statement that the suspension does not imply that the employee is guilty of anything. The suspension should also not last longer than is necessary to carry out an investigation.

In this case, Jones had been a long serving employee with no disciplinary record. During the time that he was suspended, no further enquiry was being carried out by ESAL into the action they should take and the Employment Tribunal found that although ESAL was entitled to suspend Jones, to not communicate with him for three weeks would lead to the relationship of trust and confidence being seriously undermined.

What steps should have been taken?
It is important to note that the Tribunal did take into account that ESAL was a very small company and therefore its resources were limited. However, they also noted that a phone call would have been enough to keep Jones informed about what was going on.

If an employer expects that an employee may be guilty of misconduct, there are a number of steps that should be taken by the employer. First, decide whether the matter could be dealt with informally. Would it be enough to hold a private conversation with the employee to clear matters up? It may be that they are able to explain their behaviour and there will be no need for matters to proceed further.

If a more formal approach required, the employer should go through a fact-finding process. This can be a formal investigation, or it can be a simple process of establishing the facts. It is important however to keep a record of any steps taken as part of this process.

It may or may not be necessary to suspend the employee during this time. Even if the employee is not suspended, they should be informed in writing of what is happening and what the allegations of misconduct are.

A meeting should be held with the employee to allow them to present their case. They have a right to be accompanied to this meeting by either a trade union representative or colleague.

They should be informed of the result in writing. This could mean no further action is taken, a first warning or recommendation for further training is issued, or a final warning or dismissal is the necessary sanction.

The employee must be given the opportunity to appeal the decision. Even if a first warning is issued, the employee has a right to appeal this as, although it may mean no further action is needed, it will still form part of that employee’s disciplinary record and could therefore count against them at a later date.

It is difficult to ensure that all of these steps are followed when dealing with a small business, however the case of Jones v ESAL highlights how important it is to keep the employee informed when any disciplinary process is being undertaken.

To conclude
Mr Jones was successful in his claim against ESAL, however the amount of compensation that he received was reduced as the Tribunal accepted that he had acted dishonestly in entering the competition. Employers are entitled to suspend employees if it is reasonably necessary for them to fully investigate acts of misconduct, however it is important to remember that employers and employees remain bound by the employment contract during periods of suspension. This means that the duty of mutual trust and confidence should not be undermined, which in turn means that a documented disciplinary procedure should be followed if required.

It is essential that employees should be kept informed of what stage of the process has been reached and the suspension should not last longer than is reasonably necessary. Smaller businesses may be given more leeway in terms of the resources that are available to them in terms of a formal process, however the clearer the process that will be followed when employers expect misconduct, the easier it will be for employers to be able to show an employment tribunal that they have followed a fair process and not breached the employees’ rights.

In terms of competitions in the workplace, although Jones was not entitled to enter the competition as he was not a member of Sirius, employers should clearly set the expectations of employees as to whether they are able to enter any competition which their employer is responsible for.

Cases involving the coach sector
There are cases of those in the transport sector being disciplined.

In August 2018, the Guardian reported that a First West of England bus driver had been disciplined after asking a Muslim woman to remove her face veil, telling passengers that “this world is dangerous.”

The 20-year-old woman was with her baby when the driver told her he did not know what she was capable of doing if he could not see her face.
More recently, in November 2018, Deadlinenews noted that a Stagecoach driver had been suspended from duty after images were posted to social media of him reading behind the wheel.

He was shown driving a double-decker holding the steering with one hand while looking at a sheet of white paper in the other. The images were taken as the driver crossed a bridge over the A1M in Cambridgeshire.