Is This the Way to Gross Misconduct?.

In the last week, we’ve seen two recent cases dealing with gross misconduct. The first dealt with how far an employer needs to go when investigating gross misconduct and the second with how to get out of paying notice by looking for gross misconduct.

In Shrestha v Genesis Housing, the Court of Appeal agreed that an employer did not need to investigate every reason put forward by the employee in their defence.  In this case, the employee had submitted mileage claims for journeys well in excess of the AA suggested mileage (sometimes double) and the same journey was longer when taken a year later. The employer decided that the employee’s suggestions that diversions, difficulties parking and one way systems could never explain why the mileage could be so high for every single journey.  It therefore did not investigate the purported defence put forward by the employee for each individual journey.  The Court held that the employer had conducted a reasonable investigation as a whole and that dismissal for gross misconduct was fair.

Then in the case of Williams v Leeds United Football Club, Mr Williams (a senior employee) was made redundant and was one day into his twelve months’ notice period when forensic investigators found that he had emailed obscene pornographic images from his work email account to a male friend and he was dismissed for gross misconduct one week later – even though the relevant email had been sent 5½ years ago.  The Club had always wanted not to pay his whole notice period and had started the investigation to dig up any kind of wrongdoing even before he was made redundant.

They later discovered that he had emailed the same lewd images to a junior female colleague (which could easily have given rise to a claim for sexual harassment) and another male friend.  The High Court held that the Club was entitled to dismiss Mr Williams without notice due to his repudiatory breach of contract (which had only just been discovered by the Club after he was made redundant).  It was irrelevant that the Club had actively been looking for a way not to pay Mr Williams his notice monies.

On a practical point, when we draft settlement agreements for clients, we always include a warranty by the employee that they have not committed any repudiatory breach of contract such that they could be dismissed for gross misconduct.  In the event that the employer were then to discover (shortly after signature) that this warranty had been given falsely, the employer would no longer need to pay the settlement monies, but could still rely on the agreement so that the employee could not bring any claims against them.

Insights.

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