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Case Study
In Chand v EE, the Employment Appeal Tribunal considered whether a dismissal can still be fair where the employer relies on a reason that is ultimately unsupported by the evidence.
Ms Chand had been employed for 16 years and had a clean disciplinary record. She became the subject of an internal investigation into four separate incidents involving customer accounts. These incidents were treated collectively by the employer as an allegation of fraudulent conduct.
During the disciplinary process, Ms Chand accepted that she had made mistakes in relation to the accounts but maintained that these were not dishonest. Despite this, EE proceeded to dismiss her for gross misconduct on the basis of fraud.
Ms Chand brought a claim for unfair dismissal. The Employment Tribunal found that there were not reasonable grounds for believing that any of the incidents amounted to fraud. However, it concluded that one of the issues did amount to a serious breach of policy and, on that basis, found the dismissal to be fair.
The key issue in the case was whether the employer could rely on a different justification for dismissal than the one it had originally relied upon. In other words, could a dismissal for fraud still be fair where fraud was not proven, but some other form of misconduct might have justified dismissal?
This case is particularly relevant for employers and HR professionals managing disciplinary processes, especially where allegations are serious and may evolve as evidence is reviewed. It highlights the importance of clearly identifying — and sticking to — the reason for dismissal.
The legal framework centres on unfair dismissal under the Employment Rights Act 1996, which requires employers to show a genuine belief in the reason for dismissal, based on reasonable grounds, and that the decision falls within the range of reasonable responses.
Case Study
The Employment Appeal Tribunal allowed Ms Chand’s appeal and found that the dismissal was unfair.
In straightforward terms, the EAT held that the original tribunal had taken the wrong approach. While it had correctly found that there was no reasonable basis to conclude fraud, it was not entitled to uphold the dismissal by relying on a different issue — namely the policy breach.
The EAT made clear that the fairness of a dismissal must be assessed based on the reason the employer actually relied upon at the time. Once the employer no longer believed that fraud had occurred, it could not fairly maintain that this was the reason for dismissal. It was not open to the tribunal to “substitute” an alternative justification after the fact.
A key point for employers is that even if another potentially fair reason for dismissal exists, this does not make the dismissal fair if that was not the reason relied upon. The existence of an alternative reason may be relevant when considering compensation, but it does not fix a fundamentally flawed dismissal.
From a business perspective, this case underlines the risks of over-characterising allegations or grouping issues too broadly at the outset. By framing the conduct as fraud and treating the incidents collectively, the employer limited its ability to adjust its position as the evidence developed.
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