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Manager was unfairly dismissed despite awarding herself unauthorised pay rises

An employment tribunal has ruled that the practice manager at a GP practice was unfairly dismissed for gross misconduct after she was found to have awarded herself a pay rise from £24,000 to £97,000. However, the tribunal added that the Claimant’s dismissal would have been fair if a fairer procedure had been followed.

Relevant law

Since a landmark House of Lords’ ruling in 1988, procedural fairness has been an integral part of the statutory test for assessing the reasonableness of the dismissal. The Court’s decision put an end to what had become known as the ‘no difference’ rule. Prior to that ruling, where there was a procedural irregularity in an otherwise fair dismissal (for example, a failure to consult before a redundancy) which made no difference to the final decision, the employment tribunal was able to find the dismissal fair. The House of Lords overturned this rule in all cases, except those where it would be “utterly useless” or “futile” to carry out the omitted procedure.

Now, if a tribunal decides that an employee could have been dismissed in any event, it can reduce the compensation according to that likelihood as a percentage deduction. So, if it thinks a dismissal was inevitable the compensation can be reduced by a full 100%.

The following case demonstrates those principles in practice

Facts

The Claimant was the practice manager at a GP surgery at which her mother was the business manager.

According to the tribunal, there were few financial controls at the Practice which the Claimant took advantage of to make unauthorised and unearned increases to her own and her mother’s salaries.

When this was eventually spotted by the owner, the Claimant and her mother were suspended pending a disciplinary hearing to be conducted by an external HR consultant.

In preparation for the disciplinary hearing, the owner commissioned a forensic accountants’ report. The report made several assertions which were relied on for the finding of gross misconduct by the Claimant but was not disclosed to the Claimant. In particular,that:

  • the Claimant’s salary was £94,910 compared to the industry average for practice managers of £45,000;
  • the Practice had lost £138,460 as a result of the financial transactions carried out by the Claimant and her mother;
  • there were unexplained payments to the Claimant’s mother of which the Claimant must have been aware; and
  • other documents suggested a further allegation of forging the owner’s signature.

The accountant’s report was relied on by HR consultant for his finding of gross misconduct but was not shared with the Claimant.

The Claimant brought a claim for unfair dismissal.

ET

The tribunal found that the Claimant’s dismissal was procedurally unfair; in particular that “that the disciplinary hearing was unfair in that [the Claimant] was not provided with significant documentation and further information that was relied upon to a significant extent to dismiss her.”

However, the tribunal went on to rule that if a fair procedure been adopted, “it is inevitable that [the Claimant] would have been dismissed in any event” for awarding herself very large pay rises without authorisation. In addition, the dismissal was 100 % caused by the action of the Claimant in awarding herself those pay rises and it would be just and equitable for the compensatory award to be reduced to nil.

Comment

This case is a good example that, even if an employee’s dishonesty is obvious, a failure to follow a fair disciplinary procedure can and often will result in a finding of unfair dismissal.

Citation

Case Number: 3329405/2017 Sidhu v Dr Sangeeta Rathor, t/a Allenby Clinic/Northolt Family Practice

Warning: this news item is not a substitute for legal advice. The information may be incorrect or out of date and does not constitute a definitive or complete statement of the law. This news item is not intended to constitute legal advice in any specific situation. Readers should obtain legal advice and not rely on the information in this article

 

 

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