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Emma O'Connor
Emma O'Connor,
HEAD OF TRAINING
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How far does an employer's investigation process have to go to be reasonable?
11 March 2015

When dismissing for gross misconduct an employer must show that it had a reasonable belief that the employee committed the act they are being accused of and that that belief is based on the employer’s reasonable investigation. But how ‘reasonable’ does an employer’s investigation process have to be?

Facts

In Shrestha v Genesis Housing Association Ltd [2015], an employee frequently travelled as part of his work, for which he was entitled to claim mileage expenses. The employer investigated the employee’s mileage for a period in 2011 and found that his expenses claims were in excess of the recommended mileage for the relevant journey claimed. Their investigation also found that the employee had made the exact same journeys in 2010, but that the mileage had been substantially lower. Following this investigation, the employee was disciplined. The employee claimed that he had to take longer routes due to road-works, one-way systems and parking difficulties. The employee was dismissed for gross misconduct.

An issue arose over the reasonableness of the employer’s investigation process. The employee’s claim for unfair dismissal was dismissed by the employment tribunal as was his appeal to the EAT. However, the employee appealed to the Court of Appeal. He argued that the employer had carried out an unreasonable investigation process. He argued that the employer not only had to investigate the original allegations of him claiming excessive mileage; but also that the employer should have carried out a reasonable investigation into his response to those allegations. He was therefore seeking to break the investigation process down into separate processes depending on the nature of the investigation. As the employee had given a number of reasons in his defence (road-works, one-way systems and parking difficulties) the employer, he said, was obliged to investigate each of them as a separate investigation process and that if it didn’t the process was unreasonable and his dismissal unfair.

Reasonableness of the Investigation Process

The Court of Appeal upheld the tribunal’s decision.

It found that the investigation process should always be looked at as a whole and not as separate processes depending on whether an employer was considering initial allegations or mitigation evidence. As part of this overall process the employer must consider any defences advanced by the employee in response to the allegations put to them. However, whether it is necessary to carry out a specific inquiry into each defence will depend on the circumstances of the case.

The employer’s original investigation had revealed that the mileage claimed was almost twice that recommended by different travel and route planning websites, the expense claims in 2011 had exceeded those for the same journey in 2010, and the disciplinary hearing had given consideration to all of the defences put forward by the employee. The assessment made was that none of the defences plausibly explained why every single journey had a higher mileage. The tribunal had considered not only what the employer did, but also why it was unnecessary for the employer to pursue any further inquiry into the explanations. Consequently it was entitled to reach the conclusion that a reasonable investigation had been carried out.

Comment

In this particular case, what mattered was the reasonableness of the investigation as a whole and it is that upon which an employer is judged.

This case reinforces the need for a reasonable investigation and confirms that provided an employer has a reasonable explanation as to why its investigation only went as far as it did, and can establish that the employee was given a fair hearing, that should be sufficient. However, employers will still be required to give a proper explanation as to why certain questions were not asked or followed through and both the employer’s decision to dismiss and its investigation will continue to be subject to the “band of reasonable responses” test.

For more information about the issues in this article or to find out more about how the Employment team can help you please contact the team on 0118 952 7206 or email [email protected].

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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