On Tuesday 13th June, our Employment Team, alongside Bond Williams, held a mock tribunal with real barristers.
The case explored the dismissal of Greg Hirsch, the Business Manager of Respondent Company, SCN Systems Limited, for alleged gross misconduct.
Here, Employment Solicitor Chris Dobbs has provided a summary of the case for those of you who weren’t able to attend (as well as any attendees who want a recap).
The dismissal
Greg, ably played by Frettens trainee Rupert Knell, was accused of taking advantage of his senior position in the company to place orders for personal use through company accounts. It was alleged that his primary motivation for doing so was to avoid the VAT on the orders.
The Respondent, through its CFO (Tom) and Chairperson (Jerry) played by Paul Burton and me respectively, dismissed Greg on this basis.
There were some significant defects with the procedure that followed and so Greg argued that his dismissal was both substantively and procedurally unfair.
The claimant’s argument
Our case was potentially complicated by the fact that Greg's role had been considered for redundancy under which he could have been entitled to £1 million in share value. Was the dismissal a sham to avoid this process and payment?
Represented by Heather Platt of Pump Court Chambers, that was certainly part of Greg's argument.
She also argued on his behalf that the overlapping involvement of Tom and Jerry in the investigation and disciplinary meant that the dismissal was not fair.
Greg also claimed that he had the consent of a business owner to place the orders in the first place. There was a vested interest in finding a gross misconduct dismissal because of the share situation if Greg were to be made redundant.
The respondent’s view
Acting for the Respondent, Richard Wayman, also of Pump Court, argued that the focus should be on the misconduct itself.
Potential VAT evasion is a criminal offence and having permission of the business owner would not have been a defence to those criminal acts. It would have created potential issues for the company with HMRC and so there was no logical reason for the permission to have been given.
While the procedure to dismiss was perhaps not perfect, there is no requirement for it to be perfect and any defects were remedied by the appeal process which did not involve Tom or Jerry.
The tribunal’s decision
Delivering her judgement, Employment Judge Daniella Gilbert found that there was sufficient belief in the misconduct.
The Claimant’s justifications for using the company accounts had changed and it was logical to conclude that either he had been trying to evade VAT or, indeed, that he never intended to repay the costs at all.
On balance, she did not believe that he had permission to place the orders and that even if he had done so it would not necessarily have meant that intending to evade tax could not be misconduct.
Was the dismissal unfair?
However, she took issue with the company’s procedures and processes. While the investigation process itself was sufficient, the decision to dismiss was tainted by the overlapping involvement of Tom and Jerry.
The company readily accepted that it had external HR involved and the judge could not understand why one or more stages of the process was not delegated if there was not sufficient capacity in-house. The dismissal was therefore procedurally unfair.
Remedy
Having found an unfair dismissal, we then turned to the question of remedy. In theory, Greg would be entitled to his notice period, basic award and a potential compensatory award of up to one year’s salary.
Naturally, Ms Platt sought as much of this as possible while having to accept that the Judge had found the misconduct had taken place.
In response, Mr Wayman sought a significant reduction of the award based on the principles of contributory conduct (i.e. that regardless of how the dismissal took place, Greg was still at fault for the fact he is now unemployed through his behaviour).
As well as Polkey deductions (in brief, the idea that a procedurally unfair dismissal would have happened anyway under a fair process and that the award should only reflect how long that may have taken).
The remedy decision
The Judge was particularly swayed in her decision on remedy by the fact that the misconduct had, in effect, been admitted and that despite Greg’s claims that his intention was always to pay the amounts in full, this had not happened up to the termination date.
She therefore applied a significant 75% deduction to his award.
Conclusion
Chris Dobbs said: "This was a bit of a rollercoaster of a case and one we had to condense into 3 hours.
For employers, the key takeaway must be that even where there is potentially obvious misconduct, you still run the risk of an unfair dismissal if the procedure is not fair and reasonable.
While the contribution and Polkey deductions might help to mitigate the damage caused by an award, they are by no means guaranteed and they do not help with the costs that have already been invested in defending the claim, or the public judgment that you unfairly dismissed someone.
For the Respondent this was a failure in process which could have been easily remedied by seeking proper advice or giving some serious through to its procedure and who to involve at each stage before starting.”
Tailored, specialist Employment advice
Following this summary, if you have any additional questions, please don’t hesitate to get in touch with our bright Employment Team.
We have vast experience in assisting employers in defending unfair dismissal cases like this one, but also in the other aspects of employment law such as redundancies, disciplinary issues, workplace grievances and more.
You can call us on 01202 499255, or fill out the form at the top of this page, for a free initial appointment.
Tailored courses for Employment & HR Professionals
We also offer a range of tailored Employment Training Courses for new and experienced employers and HR professionals, one which might be of use to you.
To keep up to date with employment news, tribunal and updates; you can register for our free newsletter here.
Comments