The Risks of Dismissing an Employee for Gross Misconduct

Recently my colleagues and I, have received enquires where an employee has been dismissed for gross misconduct, where we did not consider the employee should have been dismissed for this reason.

This has resulted in having to consider the implications and potential claims which may arise from a dismissal for gross misconduct.

Dismissing an employee fairly

An employee can be dismissed fairly, where the employee has committed misconduct.

This can either be where the employee has committed a series of breaches, and has already received an active final warning, or a single act of serious misconduct, known as gross misconduct.

What is gross misconduct?

Gross misconduct is where an employee has deliberately committed a serious act of misconduct or where their conduct amounts to gross negligence.

The contract of employment and/or the employer’s staff handbook, will normally include examples of conduct which will be considered, gross misconduct, by the employer.

However, what amounts to gross misconduct is fact sensitive, therefore, I recommend employers seek advice before dismissing an employee. This is particularly important if they have been employed for 2 years or more and may therefore be able to make a claim for unfair dismissal.

What is the difference if you dismiss for gross misconduct?

The difference is that where an employee is dismissed for misconduct (following a series of warnings for example), they are entitled to their full notice or a payment in lieu of notice.

A dismissal for misconduct, will usually only be fair, where the employee has received previous warnings (not necessarily for the same reason) and they have received a final warning, which is still active.

Whereas an employee dismissed for gross misconduct is not entitled to notice or payment in lieu of notice.

Also, no previous warnings need to have been given, as the act is serious enough, to amount to a repudiatory breach of contract.  

The Risks of Dismissing an Employee for Gross Misconduct

If an employee is dismissed for gross misconduct the following claims could be pursued:

1. Unfair Dismissal

If the employee has two years’ service, and can show that the act, for which they were dismissed, did not amount to gross misconduct, they may be able to pursue a claim for unfair dismissal.

2. Wrongful Dismissal

If an employee does not have two years’ service, but can show that the act, for which they were dismissed, did not amount to gross misconduct, they may be able to pursue a claim for wrongful dismissal.

I specifically want to address the claim for wrongful dismissal, as this is a claim which is often, in my view, overlooked by employers and not all dismissals which are wrongful, will be unfair. There will be times where a misconduct dismissal is fair, but the Employment Tribunal finds that the specific act of misconduct was not sufficient to amount to gross misconduct, which would have allowed the employer to dismissal without paying notice.

What is Wrongful Dismissal?

This is a claim for breach of contract.

This means if an employee can show they have not committed an act of gross misconduct, then they should have been given notice or paid in lieu of their notice payment, as a result of not being paid this payment, the terms of their employment contract have been breached.

Often, the risk of a wrongful dismissal claim, does not worry employers, as it is limited to an employee’s notice period. However, there are occasions, where the employee’s notice period is lengthy, either because of the employee’s length of service, or because they have a contractually enhanced notice period.

I recommend employers follow a fair procedure when considering disciplinary action, as this will reduce any risk of a claim and will ensure the reasons for the dismissal are fully documented.

If you are unsure if an offence can amount to gross misconduct, you should seek advice before taking disciplinary action, as an employee needs to be made aware of the possible sanctions, when being invited to a disciplinary hearing.