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Investigating Misconduct

Does an employer have to investigate every line of defence put forward by an employee when considering allegations of misconduct?

No, said the Court of Appeal in the case of Shrestha v Genesis Housing Association Limited.  There, the Court of Appeal held that the band of reasonable responses test applied to an investigation into suspected misconduct as well as to determining the appropriate sanction to be applied if the allegations are upheld.  Accordingly, where misconduct is suspected, an employer is not obliged to investigate every line of defence put forward by the employee. 

Mr Shrestha was employed by Genesis Housing Association as a floating support worker. He was required to travel by car to visit clients at their homes. He was reimbursed travel expenses by submitting mileage claims.  An audit of Mr Shrestha’s mileage claims was taken over a three month period. The audit revealed that the mileage claimed was substantially more than the mileage estimated by the AA mileage calculator. Mr Shrestha alleged that the extra mileage was due to additional factors such as road works and parking difficulties. The audit led to a disciplinary hearing where it was found that Mr Shrestha had been fraudulently over-claiming his travel expenses.  Mr Shrestha was dismissed on the grounds of gross-misconduct. 

Mr Shrestha lodged a claim of unfair dismissal, alleging that his employer did not complete a reasonable investigation into his defences. This argument was refused by the Employment Tribunal who held that the dismissal was fair as it met the three-step test set out in British Home Stores Ltd v Burchell. The “Burchell” test requires that (1) the employer had a genuine belief in the employee’s guilt, (2) the belief was reasonable for the employer to hold and (3) the belief was reached after the employer had carried out as much investigation as was reasonable in the circumstances. The Employment Tribunal concluded that although the employer did not question Mr Shrestha on each individual journey, all of which were found to be higher than the AA mileage indicated it should be, it was not plausible that every extended journey had a legitimate explanation and therefore the employer had acted reasonably in his investigation. 

Mr Shrestha appealed to the Employment Appeals Tribunal and to the Court of Appeal but both appeals were dismissed. The court stated that the employer must consider any defences put forward by the employee but the extent of inquiry will depend on the facts of the case as a whole. 

This case confirms that employers are not required to conduct an investigation into every line of defence put forward by the employee in order to demonstrate that they have carried out a reasonable investigation. However, the case does not alter the duty which remains on employers to investigate the misconduct or its justifications to such extent as is reasonable in the circumstances.

For more information please contact Martin Sinclair or Nicola Gray or call 01224 632464.

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