How far must employers go when investigating allegations of misconduct

For a dismissal on grounds of conduct to be fair, the employer must show that at the time of the dismissal:

(1) the employer believed the employee to be guilty of misconduct
(2) it had reasonable grounds for believing that the employee was guilty of misconduct and
(3) at the time that it held that belief, it had carried out as much investigation as was reasonable in the circumstances.

The investigation carried out by the employer will be central to determining the above.

In the case of Stuart v London City Airport, the Court of Appeal (CA) restored the Tribunal’s decision that Mr Stuart was not unfairly dismissed for theft, despite the fact that following his dismissal he was found not guilty of theft in a criminal court.


Mr Stuart worked at London City Airport. In December 2009, whilst in the queue to pay for a number of items in one of the airport’s duty free shops, Mr Stuart was called over by one of his colleagues so he went and sat down to talk to her whilst still holding the items. The Police were called and Mr Stuart was subsequently suspended pending an investigation into alleged theft.

Mr Stuart maintained throughout the investigation and disciplinary hearing that he had no intention of stealing the items and he felt that he was still in the general shop area when holding the items.

A disciplinary investigation was carried out and during the hearing oral statements were heard from Mr Stuart and Mr Gilani (the store manager). The layout of the shop was also examined, but the CCTV was not reviewed nor were any other witnesses interviewed. It was subsequently concluded that Mr Stuart had left the boundaries of the shop without paying for the goods. Mr Stuart was summarily dismissed for dishonest conduct and breach of trust.

Mr Stuart brought a claim for unfair dismissal claim and argued that his employer had not carried out an adequate investigation into his alleged misconduct. He pointed to the fact that they had failed to interview all of the staff that were present in the shop at the time and that they had failed to review the CCTV.

The Tribunal held that the failure to take these steps was not enough to make the investigation a flawed one or render the employer’s belief unreasonable.

Mr Stuart appealed the decision to the EAT who allowed the appeal. London City Airport then appealed the EAT’s decision.

Court of Appeal decision

The CA restored the decision of the Tribunal that Mr Stuart had not been unfairly dismissed.

The CA looked at the level of investigation that London City Airport had carried out in light of Mr Stuart’s defence, which had always been that he had never left the shop area with the goods or that he had a genuine belief that he had not done so. In their investigation London City Airport had investigated this argument as they had inspected the layout of the shop and found that the demarcations were clear and so concluded that Mr Stuart could not have been under the impression that he had not left the shop area with the goods.

The CA held that this showed that Mr Stuart had advanced an untruthful defence and therefore London City Airport was entitled to believe the version of events given by Mr Gilani as to Mr Stuart’s earlier movements in the shop. Further, once they had found Mr Stuart’s main argument was false, they were under no obligation to investigate other arguments which he had not made. Had Mr Stuart’s defence been that he tried to pay for the goods and then nipped out of the shop to speak to someone, London City Airport should then have reviewed the CCTV footage and a failure to have done so would have rendered the decision to dismiss unfair.

Further, at no point throughout the disciplinary investigation had Mr Stuart suggested that further investigations should be carried out. This did not mean that the London City Airport should not have made these enquiries, but it was relevant to the question of whether the fact that they didn’t pursue them meant the dismissal was unfair.


This decision is useful for employers as it sets down some guidance on what level of investigation is required in order to constitute a reasonable investigation. However, this decision should be treated with caution, as arguably the employer here carried out the minimum level of investigation required. Employers should also bear in mind that a fair process should always be followed. The Tribunal in this case emphasised that Mr Stuart was given the opportunity for his case to be heard at the disciplinary hearing and the appeal hearing and therefore the process was fair.

This entry was posted in Devonshires, employment. Bookmark the permalink.

1 Response to How far must employers go when investigating allegations of misconduct

  1. faceupspeakout says:

    What happens when an employer doesn’t follow the rules for fair dismissal during a probationary period? All too often now it seems employers are well aware of the difficulty employees face in pursuing a claim for unfair dismissal because of the eligibility after two years’ service. Quite often it seems that employers are unfairly dismissing well before anyone can claim.

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