Can an employer take the decision to start disciplinary action part-way through an investigation?

Can an employer take the decision to start disciplinary action part-way through an investigation?

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In the case of Sattar v CitiBank, the Court of Appeal held that a decision to take disciplinary action part-way through an investigation did not render the dismissal unfair, as long as the employee had a full and fair opportunity to engage with any new material discovered during the remainder of the investigation.

 

Facts

Mr Sattar was a senior employee at CitiBank who was arrested by HMRC on suspicion of tax fraud.  The bank subsequently conducted an investigation into his activity. Mr Sattar was not informed who would be conducting the investigation and the only guidance he received was a copy of the Staff Handbook that referred to a disciplinary policy.  

On identifying a number of transactions of concern, but before the investigation had concluded, the bank suspended Mr Sattar and invited him to attend a formal disciplinary hearing. The day before the hearing, the bank became aware that Mr Sattar had a disability in the form of a brain tumour.  The bank decided to postpone the hearing for 10 days and suggested that Mr Sattar speak to occupational health regarding reasonable adjustments. He declined to do so. The bank made various adjustments to the hearing, including reducing the number of concerning transactions being reviewed and conducting the hearing in writing. Having considered Mr Sattar’s submissions, the bank dismissed Mr Sattar for gross misconduct.

Mr Sattar appealed the decision and was given the opportunity to submit further evidence and make further submissions. The bank upheld the appeal.

Mr Sattar brought claims of unfair dismissal and disability discrimination. In particular, he complained that disciplinary action had been taken before the investigation was complete, that he hadn’t had an investigation meeting and that he had not been informed of the charges against him. A tribunal, upheld by the Employment Appeal Tribunal, dismissed his claims. Mr Sattar appealed to the Court of Appeal.

Decision

The Court of Appeal dismissed the appeal and held that it was reasonable to suspend the employee before the investigation had been completed. It also held that making a decision to discipline before finishing an investigation does not make the decision unreasonable, provided that the employee has the opportunity to engage with any new material. A formal investigatory hearing is not always necessary. As there were no significant disputed facts in this case and Mr Sattar knew that his transactions were a concern to the bank, the absence of a formal hearing at the investigatory stage did not render the dismissal unfair. 

The Court held that employees are entitled to be informed of the charges against them and that the burden is on the employer to explain the charges so that a reasonable employee would know what charges needed to be addressed. Here, the disciplinary letter was sufficiently detailed. A reasonable employee using their common sense would have realised that the matters fell within the generic description of improper use of the bank’s systems.

In relation to the appeal, while it is clear that an appeal can rescue a defective process, the Court of Appeal stressed that any such appeal must allow fresh evidence and further submissions to be advanced.

Comment

This case clarifies that where serious matters are unearthed during an investigation, employers can suspend the employee and make a decision to discipline them, even though the full investigation into those matters has not been completed. The investigation can be continued after this and employers should ensure that the employee is given the opportunity to engage with any new material that might emerge as a result of that process. That opportunity might be at the disciplinary hearing.

Even if there are defects at the dismissal stage, this may not necessarily be fatal. Such defects may be ‘cured’ on appeal if certain conditions are met.

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