The employment tribunal has provided a reminder about the importance of an employer not simply relying upon a breach of the black letter of its policies to dismiss an employee.

Background

In this case, Citibank dismissed employee Mr Stimpson for gross misconduct on the grounds of his disclosure of confidential information in breach of Citibank’s relevant policies. Mr Stimpson, a Foreign Exchange (FX) trader, had disclosed confidential information to other FX traders from different banks in Bloomberg’s online chat room.

The tribunal held that it was insufficient for Citibank to rely on a strict reading of its policies and codes of practice on protecting confidential information without properly investigating how the policies were actually applied in the FX business. The tribunal held that a reasonable investigation would have revealed that there was a culture of information sharing between FX traders at different banks.  The tribunal found that Citibank had also failed to interview witnesses who might have corroborated the trader’s defence.

In particular, a member of Citibank’s Employee Relations team had interviewed a different manager about the practice of FX traders at different banks sharing information in chat rooms previously. This had been as part of a concurrent investigation by the Financial Conduct Authority about the possible manipulation of foreign exchange rates and inappropriate sharing of confidential information in online chat rooms by FX traders at different banks.  When the dismissing officer informed Employee Relations about his decision to dismiss Mr Stimpson, Employee Relations did not bring to the dismissing officer’s attention relevant evidence it had obtained whilst carrying out this separate investigation.

Implications

The tribunal pointed out that when considering the fairness of the dismissal, it will take into account not only what the dismissing officer knew when reaching his/her decision, but also what he/she reasonably should have known (our emphasis) had there been a reasonable investigation. This will include matters known, for example, to Human Resource and Employee Relations teams.

1. Whilst this is a decision by a first instance tribunal and not binding, it is an important reminder to employers to consider and investigate the context in which a breach of a policy occurs rather than rely on the strict reading of its policies.
2. Further, the more serious an allegation and where the consequences of dismissal can have a severe effect on the employee’s future career prospects, such as in regulated sectors, the more careful and conscientious an investigation must be carried out.
3. Human Resource/Employee Relations departments who limit decisions about grievances and disciplinary matters to information gathered from the respective grievance or disciplinary investigation only run the risk of a dismissal being unfair by reason of a failure to carry out a reasonable investigation.  We consider the same will apply to a claim arising out of matters relating to a grievance such as a constructive dismissal being unfair.
4. A failure to carry out a reasonable disciplinary or grievance investigation also runs the risk of a tribunal awarding an uplift of up to 25% to any award of compensation upon a successful claim because of an unreasonable failure to follow the guidance set out in the acas Code of Practice on Disciplinary and Grievances 2015.
5. Following the recent and significant decision of the EAT in Ramphal v the Department of Transport 2015, that the role of HR should be limited to questions of law and procedure, and should not stray into questions of culpability (Read Springhouse update here), the Tribunal’s reminder in Stimpson v Citibank N.A. follows the premise that Human Resources/Employee Relations should not be involved in substantive decision making whether by action or, now omission.

Springhouse Solicitors are experienced in advising and guiding employers through grievance and disciplinary proceeding and the advice we provide is privileged.