Clear Strategy

Last month we blogged about a case [1] in which the Employment Appeal Tribunal found that an employer’s reasons for dismissing an employee should be looked at as a whole, when deciding on their fairness. The Court of Appeal has recently taken a similar approach on the question of what amounts to a ‘reasonable investigation’ into misconduct. In this case[2], it considered how far an employer has to go in investigating allegations against an employee and the arguments raised by the employee in his defence.

The test for determining the fairness of misconduct dismissals was established some years ago as involving three key questions [3]:

  1. Did the employer actually believe that the employee was guilty of the misconduct?
  2. Did the employer have reasonable grounds on which to base that belief?
  3. At the stage that the employer formed that belief on those grounds, had he carried out as much investigation into the matter as was reasonable in all the circumstances of the case?

Since this test is well established, it may therefore have been something of a surprise to the Court of Appeal that it was asked to consider the matter once again in February 2015.  In this latest case, the employee (Mr Shrestha) came under suspicion when he put in a claim for an additional allowance for employees who drove more than 2,500 business miles a year. Since he had never claimed this allowance before, the employer carried out an audit of his recent mileage claims.

The employer found that the claims were far in excess of the journey distances quoted by the AA and the RAC. They were also more than twice the distance claimed the previous year by the same employee for the same journeys. The employee sought to justify the excessive mileage claims, with a number of excuses including parking problems, road works, traffic congestion and road closures.

The employer did not accept this explanation and dimissed him for making fraudulent expense claims. It also dismissed his appeal. The employment tribunal later dismissed his claim for unfair and wrongful dismissal and his claim made (with remarkable audacity) for the additional allowance and the over-exaggerated mileage claims, which were, unsurprisingly, never paid.

Both the Employment Appeal Tribunal and the Court of Appeal dismissed further appeals from the employee and found that the employer was justified in dismissing him.

The Court gave admirably short shrift to the suggestion that the employer should have gone out on the road to check the availability of car parking spaces and accepted that it was not reasonable to expect the employer to try to recreate the employee’s journeys.

The point of Shrestha, as in the Robinson case, is that reasonableness is not about the sum of the parts, but the whole. Clearly, the employer believed the employee guilty of dishonestly over-claiming expenses, it had reasonable grounds for that belief and it had carried out an investigation that was reasonable in all the circumstances. The Court needed not to go any further than that. Neither did the employer.

This post was edited by Helen Webster. For more information, email

[1] Robinson v Combat Stress [2014]

[2] Shrestha v Genesis Housing Association Limited [2015]

[3] Burchell v British Homes Stores [1980]

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.