If an employee is accused of misconduct, a dismissal will be unfair unless the employer reasonably believes that they have committed misconduct, having carried out a reasonable investigation. In Sunshine Hotel Ltd t/a Palm Court Hotel v Goddard the issue was whether failing to hold an investigatory meeting into alleged misconduct always makes a dismissal unfair. Even though the EAT found that it did not, the employer had nevertheless failed to carry out a reasonable investigation.

Although the facts are slightly unclear, it appears that Mr Goddard was suspected of sleeping while he was on duty. The employer conducted an "investigation" into the allegation, which involved watching some CCTV footage, although not in Mr Goddard's presence. It did not speak to Mr Goddard about the allegation before his disciplinary hearing. He was dismissed and brought a successful unfair dismissal claim. The employer appealed, arguing that the tribunal had incorrectly found that an investigatory meeting was a prerequisite for a fair dismissal and that this was wrong in law.

The EAT agreed that there is no specific requirement in the ACAS Code of Practice, the Employment Rights Act or case law for there to be separate investigation and disciplinary hearings in every case. What is required is as much investigation into the matter as is reasonable in all the circumstances. Here the tribunal had that test in mind and found that the employer's investigation did not meet the standard. It reached its decision on the basis that there had not been a proper investigation, not because of any principle that there should be separate investigation and disciplinary hearings in all cases. The finding of unfair dismissal was therefore upheld.

Despite the EAT's confirmation that separate disciplinary and investigation hearings are not always required, large employers with significant resources are unlikely to place too much weight on this decision. Not holding an investigatory hearing gives an employee an obvious line of attack in any unfair dismissal claim.