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ET wrong to award notice pay to employee dismissed for theft

Posted by TonyBrownEmploymentSolicitor on October 14, 2015

Is an employee who is fairly dismissed for theft nonetheless entitled to notice pay? In a baffling decision, a tribunal decided that an employee could not be dismissed summarily for stealing if there was no term in the employment contract entitling the employer to dismiss without notice.

In that case, the Claimant was an assistant store manager and was responsible for the banking. Her employer discovered a discrepancy between the store receipts and the banking records. After a careful and detailed investigation, the employer concluded on the balance of probabilities that the Claimant had stolen the money. She was dismissed without notice.

The Claimant issued tribunal proceedings in which she claimed both unfair dismissal and her notice pay.

The ET concluded that the employer genuinely believed that the Claimant had stolen the money, and that it had reasonable grounds for that belief following a reasonable investigation. Accordingly, the ET dismissed the Claimant’s claim of unfair dismissal.

However, despite agreeing that the Claimant had probably committed theft, the ET awarded the Claimant her notice pay because there was no term in the Claimant’s contract entitling the employer to dismiss her without notice.  

The EAT allowed the employer’s appeal. 

The EAT ruled that the tribunal’s error was in requiring some term in the employment contract entitling the employer to dismiss the Claimant without notice rather than applying well established principles of common law.

If an employee shows by stealing from her employer that she is not intending to honour her contract, an employer is not bound to keep its side of the employment bargain. Since the right to notice is part of that bargain the employer is not bound in those circumstances to provide an employee with notice.

The only conclusion the tribunal could have reached was that the Claimant’s dismissal did not have to be on notice.

Comment

As the EAT pointed out, if an employee is guilty of repudiatory conduct, which stealing inevitably is, an employer is entitled to dismiss the employee without notice. The right to dismiss without notice derives from the common law. It should not be necessary to include a term in the employment contract entitling an employer to dismiss summarily an employee who is guilty of gross misconduct.

If you would like advice about how the issues in this note apply to your situation, please contact Tony Brown on 01225 740097 or by e mail to tony@bathemploymentlaw.co.uk

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