A recent Employment Tribunal decision, upheld by the Court of Appeal, has ruled that in cases of suspected misconduct, an employer doesn’t have to investigate every line of defence put forward by an employee.
The case, Shrestha vs Genesis Housing, involved an employee who was fraudulently claiming excessive mileage on his expenses claims. Mr Shrestha was employed as a floating support worker who travelled by car to visit clients in their homes. Over a three month period in 2011, Mr Shrestha consistently over-claimed on mileage – claiming for 197 miles when AA figures for the journeys in question totalled just 99 miles.
When Genesis Housing challenged Mr Shrestha about his expenses, he gave a number of explanations for the excess mileage, including parking difficulties, road works, road closures, one way streets and diversions. Mr Shrestha said that only two allegations of over-claiming were discussed with him, but his dismissal was based on further findings.
In the Employment Tribunal, Mr Shrestha claimed that he had been unfairly dismissed because his employer didn’t investigate each and every journey on which his gross misconduct charge was based. However, Genesis Housing argued that it hadn’t investigated more than two of the fraudulent claims because every single journey that Mr Shrestha was claiming for was over the mileage suggested by the AA.
The employer concluded that there couldn’t possibly be a valid reason for all the journeys being above the suggested mileage and, therefore, all the claims were fraudulent and Mr Shrestha had committed gross misconduct.
After an Employment Appeal Tribunal ruling Mr Shrestha appealed to the Court of Appeal. The Court ruled that the Employment Tribunal had acted correctly in rejecting Mr Shrestha’s claim of unfair dismissal. Specifically, the Court rejected the argument that, if an employee raises several lines of defence, the employer must investigate all of them, unless they are clearly false or unarguable, in order to pass the ‘reasonableness’ threshold.
The correct legal test for unfair dismissal cases is set out in the leading case of BHS-v-Burchell. This requires that the employer has an honest belief, on reasonable grounds following a reasonable investigation that the misconduct took place.
The Employment Tribunal had applied this test to consider whether Genesis Housing had carried out a reasonable investigation given the circumstances. The Tribunal found that the employer had indeed investigated to a reasonable extent. The Court of Appeal ruled that the Tribunal had applied the Burchell test correctly and was therefore entitled to reach this conclusion.
In other words, it wasn’t necessary for Genesis Housing to investigate each and every suspicious mileage claim and consider all the different lines of defence (parking difficulties and so on) put forward by Mr Shrestha for each individual claim. The investigation they carried out was reasonable in the circumstances, as it was sufficiently clear that all the mileage claims considered under the gross misconduct charge were fraudulent.
Wayne Smith, employment solicitor at Integra Legal, comments: ‘This reaffirms the fact that you don’t need to investigate every single explanation put forward by an employee in cases of misconduct. Provided you can show that your investigation was reasonable and went far enough given the circumstances, you can dismiss for gross misconduct without falling foul of an Employment Tribunal.’
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