Unfair Dismissal: Employer could rely on tribunal findings to forgo a disciplinary investigation but an appeal hearing was still required

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Unfair Dismissal: Employer could rely on tribunal findings to forgo a disciplinary investigation but an appeal hearing was still required

Published 13 May 2019

An FCA regulated employer dismissed an employee in reliance on an employment tribunal’s findings about his credibility rather than conducting a disciplinary investigation. In the circumstances, the EAT held that the lack of investigation did not make the dismissal unfair, but the lack of an appeal hearing did.

The facts

Mr Radia was employed by Jefferies International Limited, a financial services company regulated by the FCA, as an Equity Research Analyst. This role required him to be an approved person and therefore to maintain a status as a “fit and proper” person.

Mr Radia unsuccessfully brought a disability discrimination claim against Jefferies. The employment tribunal found that Mr Radia’s evidence was “not credible in many respects” and that it was “on lots of occasions evasive”. The tribunal noted that this was of “grave concern” given Mr Radia’s status as a regulated person.

Having received the tribunal’s judgment, Jefferies instituted disciplinary proceedings against Mr Radia. Jefferies decided not to conduct an internal disciplinary investigation, but instead relied on the tribunal’s many findings about Mr Radia’s credibility. Mr Tucker, who was the decision maker, was open to the idea that the employment tribunal judges might have made a mistake and he was prepared to hear what Mr Radia had to say about the tribunal’s findings and to satisfy himself that the tribunal’s comments had been justified. During the disciplinary procedure, two hearings were held, Mr Radia commented at length on the tribunal’s evidence and provided written submissions and Mr Tucker asked for further written information and read a transcript of the tribunal hearing. Mr Tucker decided that Mr Radia should be dismissed for gross misconduct because of the tribunal’s findings about his credibility in light of which Mr Tucker decided that he could not be a fit and proper person under the FCA rules. These rules state that, when assessing a person’s fit and proper status, criticism by a court or tribunal is relevant. Mr Radia submitted an internal appeal, but no appeal hearing was held.

Mr Radia claimed in tribunal that he had suffered whistleblowing detriment, victimisation, and had been unfairly dismissed. His claims were unsuccessful, and he appealed to the EAT. He argued (among other things) that the tribunal had been wrong in finding that it was reasonable of Jefferies to rely on the findings of the original employment tribunal and that the findings of the original employment tribunal meant that no further investigations could be carried out.

The EAT dismissed this ground of appeal, agreeing with the tribunal that Jefferies’ reliance on the tribunal’s findings rather than conducting an internal investigation had been, on the facts of this particular case, within the range of reasonable responses. In reaching this decision, the EAT took the following important factors into consideration:

  • The original tribunal’s findings were, on any view, very damaging to Mr Radia.
  • The original tribunal’s findings were the reason for the dismissal. Because of this, it was reasonable for Jefferies to have treated the findings as a starting point without further investigation, and then to seek Radia’s representations about the findings at the disciplinary hearing.
  • A separation of the investigation and disciplinary stages is not required by statute or by the ACAS Code of Practice.
  • There was no further investigation which Jefferies could be reasonably required to conduct before it heard from Mr Radia.

Mr Radia also appealed against the tribunal’s decision that Jefferies’ failure to hold an internal appeal hearing was reasonable. The tribunal had found that while it was “wholly irregular”, nonetheless, "unusually holding an appeal would not have made any difference", The EAT found that the tribunal had made an error in coming to this conclusion: they had made findings that Jefferies’ approach was contrary to best practice, a breach of the Acas Code and contrary to their own appeal process, and no findings that an appeal would have been futile. As a result the dismissal was unfair.

What does this mean for employers?

This is a useful, but fact specific, judgment for employers, showing that it may sometimes be possible for employers to use evidence from another source rather than conducting a time-consuming internal investigation. It comes with the warning that unless an employer clearly decides that an internal appeal hearing is futile, one must be held. The safer course of action will always be to have some form of investigation. If an employer does decide to rely on evidence from another source, (which may include the Police and /or a regulator) it must (as Jefferies did) be sure to give the employee every opportunity to make representations at the disciplinary hearing stage.

Radia v Jefferies International Ltd [2018]

Authors

Zoë Wigan

Zoë Wigan

London - Walbrook

+44 (0)20 7894 6564

Ceri Fuller

Ceri Fuller

London - Walbrook

+44 (0)20 7894 6583

Hilary Larter

Hilary Larter

Leeds

+44 (0)113 251 4710

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