Case update (2): Unfair dismissal – investigating misconduct

Summary: In a suspected misconduct case does an employer have to investigate every line of defence put forward by an employee in order to secure a fair dismissal?

No, held the Court of Appeal in Shrestha v Genesis Housing available here.

Facts: Mr Shrestha was employed by Genesis as a mobile worker. He travelled by car to visit clients in their homes and he submitted mileage claims. When his claims were audited, it was suspected that he had been over-claiming. At his disciplinary hearing he explained that the high mileage was due to difficulties in parking, one-way road systems and roadworks.

Genesis did not review every single journey, but because every journey was above the mileage suggested by both the AA and the RAC, Genesis did not think it was plausible that there was a legitimate reason for the higher mileage for every single journey. Mr Shrestha was dismissed.

Mr Shrestha brought a claim for unfair dismissal. He alleged that the investigation was inadequate. In particular, Mr Shrestha alleged that Genesis should have investigated the individual circumstances of each trip, should have driven the same journeys to understand the traffic issues and should have checked whether road works and diversions had been operational during the alleged period.

The Tribunal, EAT and the Court of Appeal dismissed Mr Shrestha’s claim. The Court of Appeal found that, although the investigation was not totally comprehensive, when looked at as a whole, it was reasonable in the circumstances. The Court of Appeal emphasised that an employer only has to carry out a reasonable investigation; it does not have to do everything possible to investigate every possible explanation put forward by an employee.

Implications: This is welcome confirmation for employers that they need only carry out a reasonable investigation when dismissing for misconduct. Employers do not have to do everything possible to investigate every possible explanation put forward by an employee. However, employers would still be well advised to satisfy themselves that they have taken practical and reasonable steps in the circumstances to investigate the allegations and any explanation given, in order to minimise the risk of exposure to unfair dismissal claims.