Conducting an investigation is fundamental to defending an unfair dismissal claim and to avoiding an uplift in compensation. In two recent decisions the Courts have highlighted the difficulties as to how far an employer should go in order to conduct a reasonable investigation. As we will see, the answer is not always clear cut. However, the message remains the same: if in doubt go the extra mile.

An admission of gross misconduct does not excuse an employer from carrying out an investigation.

The recent EAT case of Carmelli Bakeries Limited v Benali highlights that where an employee admits committing an act of gross misconduct the employer should still carry out a reasonable investigation into the gross misconduct.

The background

Mr Benali worked in a Jewish bakers. He understood the importance of using kosher produce.

On one occasion Mr Benali used non-kosher jam to make cakes. He claimed he was authorised to do this by an employee who subsequently carried out the investigation. The investigation only lasted an hour and did not involve speaking to Mr Benali. Instead it involved taking a statement from a member of staff who went to buy the jam and a statement from the investigating officer himself who denied that he authorised the purchase of the jam.

At the disciplinary hearing Mr Benali admitted that he had used non-kosher jam. He was dismissed for gross misconduct. He subsequently brought claims for unfair dismissal, wrongful dismissal and victimisation based on his disability.

The Tribunal decided that he had been victimised. In terms of the victimisation complaint, the protected acts included the fact that he was disabled and had previously raised a Tribunal complaint about this. The Tribunal found that the reason for the dismissal was that he was perceived to be a problem employee and the jam incident was used as an excuse to terminate his employment.

The Tribunal also found that the dismissal was unfair. He was awarded one year’s salary plus £14,000 for injury to feelings. The Tribunal decided that the real reason for dismissal was because he was a problem employee. They also decided there was an unfair process as the investigation did not go far enough. Crucially the investigating officer should have taken a statement from Mr Benali and Mr Benali was not impartial to the processes he had been accused of wrongdoing himself.

The Employment Appeal Tribunal

The EAT agreed with the Tribunal’s findings. Its key finding was that the investigation was not sufficiently thorough. There was some good news for the employer in that the case was sent back to another Tribunal to reconsider the compensatory award on account of the fact that Mr Benali’s conduct may have contributed to his dismissal.

A different case. A different outcome

In another case, Stuart v London Airports Limited, the Court of Appeal found that an investigation was sufficient and a subsequent dismissal was fair.

This case involved an employee at an airport. He had a clean disciplinary record. He allegedly stole goods from the airport’s duty free shop.

As part of the investigation the employer spoke to the shop manager together with a colleague who worked in the shop. They also interviewed Mr Stuart. In addition the investigating officer visited the site and took note of whether there were any clear demarcations as to the boundaries of the shop. This was because Mr Stuart’s main defence was that he had every intention of returning to pay and did not realise that he had actually gone outside the shop’s boundaries.

The investigation did not look at any CCTV footage nor did it speak to Mr Stuart’s colleague.

Mr Stuart brought a claim for unfair dismissal. It was unsuccessful. He then appealed to the Employment Appeal Tribunal who overturned the Tribunal’s decision on the basis there was not sufficient an investigation – the employer should have examined CCTV footage and spoken to other witnesses in the shop.

The Court of Appeal took a more robust view and decided that the investigation was sufficient in the circumstances. The rationale behind the decision was that Mr Stuart’s main defence was that he had every intention to pay and that he had not stepped outside the shop. However, it considered that he had been dishonest as there was a clear demarcation as to where the shop’s boundaries were. It therefore felt it was not necessary to probe any further.

Implications

The outcome of Mr Stuart’s claim is somewhat surprising. It is noteworthy that the EAT reached a different conclusion based on the same facts as the Court of Appeal. What both these cases demonstrates is the difficulty to predict what a Tribunal would decide is a reasonable investigation. The simple message to employers must be that if in doubt they must go the extra mile in order to conduct an adequate investigation. At the end of the day in Mr Stuart’s case it had not taken any time to examine CCTV footage or indeed to speak to other witnesses.

Conclusions

It is always a judgement call as to how thorough an investigation must be. Almost inevitably a less than happy employee looking to challenge a dismissal will raise concerns about the quality of the investigation. The more thorough the investigation then the more robust the employer’s response to any accusations of unfairness.