Shrestha v Genesis Housing Association Ltd

In a misconduct dismissal, the reasonableness of the employer’s investigation under section 98(4) of the Employment Rights Act 1996 is assessed as a whole. The employer must consider explanations advanced by the employee, but there is no separate rule requiring specific investigation of every line of defence unless it is manifestly false or unarguable.

The question is whether the investigation, including any decision not to make further inquiries, fell within the range of reasonable responses open to a reasonable employer. The required extent of inquiry depends on all the circumstances, including the strength of the prima facie case and the explanations given.

The appellant, a floating support worker entitled to mileage expenses, was dismissed for gross misconduct after an audit found that his mileage claims substantially exceeded AA and RAC route figures. He said that parking difficulties, road works, closures, diversions and one-way systems explained the difference.

An Employment Tribunal dismissed his claims for unfair and wrongful dismissal on 5 April 2013. The Employment Appeal Tribunal dismissed his appeal under the rule 3(10) procedure on 18 October 2013, under reference UKEATPA/0759/13/SM.

On a further appeal, the central issue was whether the employer and the tribunal had applied the reasonable-investigation requirement correctly by not making further inquiries into the explanations for the claims.

1. Appeal dismissed. The Employment Tribunal correctly applied the misconduct-dismissal approach in British Home Stores Ltd v Burchell, [1980] ICR 303. The range of reasonable responses applies both to the decision to dismiss and to the adequacy of the investigation.
2. The appellant’s proposed rule would have added an unwarranted gloss to that approach. An employer must consider the employee’s defences, but the investigation is to be assessed as a whole. Whether a particular defence requires a further and specific inquiry depends on all the circumstances. The explanations for the mileage claims were not distinct defences requiring separate treatment; they formed part of the single question whether the claims had been inflated.
3. The tribunal was entitled to find the investigation reasonable. The employer had compared the claims with AA and RAC figures, compared them with earlier claims for the same journeys, and gave the appellant a full opportunity to explain the discrepancies. It reasonably concluded that the explanations did not plausibly explain why every journey was substantially higher. It was therefore unnecessary to recreate the journeys or make further inquiries of local authorities about parking or road works.
4. The challenge to wrongful dismissal also failed. The point had not been raised before the Employment Appeal Tribunal. In any event, the Employment Tribunal had expressly found that the appellant had acted dishonestly. That finding was supported by its earlier findings and justified dismissal for gross misconduct without notice pay.
5. The claims for an essential car-user allowance and unpaid mileage also failed. The tribunal was entitled to make no award after the appellant’s representative accepted that those claims could not succeed if dishonesty were found.

• Court of Appeal (Civil Division): dismissed the appeal and upheld the tribunal decisions: [2015] EWCA Civ 94.
• Employment Appeal Tribunal: dismissed the appeal from the Employment Tribunal under the rule 3(10) procedure on 18 October 2013: UKEATPA/0759/13/SM.
• Employment Tribunal: dismissed the claims for unfair dismissal and wrongful dismissal on 5 April 2013.