Having a policy isn’t always enough

In the day job we advise many employers on the need to have their paperwork in order, to have a set of properly drafted employment documents such as contracts and a staff handbook. Having a policy in place for a given situation helps the smooth running of the business and ensures that all employees know what is expected of them. In case of problems arising then if a policy has been drafted and adhered to, it can assist to resolve disciplinary issues or, if required, to justify dismissal of a misbehaving employee. However, this is not necessarily always the panacea to all problems in the workplace. A recent case (Stimpson v CitiBank) shows that employers need to be reasonable in the way they apply those policies and they should not slavishly adhere to their terms, particularly if the policy is not followed in practice.

Stimpson was a foreign exchange trader sacked for sharing information via the Bloomberg Instant Messaging system. He complained to an Employment Tribunal and the Tribunal held that his dismissal was unfair and wrongful. He was alleged to have disclosed confidential client information to traders from different banks in an online chat room. The Bank dismissed him. However, they did not investigate the situation fully and, if they had done, they would have discovered that foreign exchange traders were in the habit of sharing client information between banks. The employee himself believed that his conduct was permitted given conduct he had seen from his colleagues and superiors. He had also abided by a directive from management not to use chat rooms for sharing this information and thus the conduct of which he was accused all took place before that warning. There was a gap of some three years between the disciplinary proceedings and his last sharing of information.

When an employer takes disciplinary action against an employee they should consider whether their action is reasonable. There are only a certain few reasons that an employer can lawfully terminate the employment of an individual and conduct is one such example. The employer has to act within the “range of reasonable responses” which means were they acting reasonably in treating the alleged misconduct as sufficient for dismissal and the employer should have “regard to equity and the substantial merits of the case”. The leading case in this situation is British Home Stores Limited v Burchell in 1978 which held that to dismiss for misconduct the employer (to have acted fairly) will need to show that:-

  1. The employer believed the employee to be guilty of misconduct.
  2. The employer had reasonable grounds for believing that the employee was guilty of that misconduct; and
  3. At the time it held that belief it had carried out as much investigation as was reasonable in all the circumstances of the case.

The ACAS Code of Conduct for dismissals emphasises the need for the employer to carry out a thorough investigation before taking disciplinary action. The nature and scope of the investigation and the disciplinary proceedings will vary between employers and more will be expected of a large multi-national company with an established HR department than from a small employer with only one or two employees.

The case does not change our advice that an employer should have the correct policies in place, particularly in relation to confidential information and sharing of data (where applicable) but common sense should prevail and an employer should not blindly rely upon a policy without considering the wider implication and consideration of whether the policy is actually followed in practice or not.

Michael Scutt, Employment Solicitor 

Employment solicitor with Crane and Staples, Welwyn Garden City, Hertfordshire. Blogger & writer. I like cycling, cricket, football and history.