Can I dismiss an employee who has been convicted of an offence or accused of a crime? A conviction/accusation has been published in the paper and the Company does not wish to retain this person in employment in circumstances where the conviction/accusation is a poor reflection on the organisation as a whole. How do I handle it?

Jennifer Cashman writes:

The whole area of terminating contracts of employment arising out of convictions or criminal offences is a difficult area. If what could be described as criminal offences committed by an employee during the course of employment it may be dealt with as an alleged wrong in the context of the employment relationship. However, criminal offences attempted or committed outside employment, not related to the employment itself, are to be distinguished. Such offences present particular difficulty and there is no consistent approach, unfortunately, in decisions of the EAT in relation to criminal offences outside of the employment relationship. There is evidence of an acceptance sometimes on the part of the EAT of the view that trust is the underlying legitimate concern of an employer in these cases.

The general view held in relation to termination of contracts of employment is that some connection to the employee’s work or work environment is generally required before an employer can legitimately discipline or dismiss an employee charged with or convicted of a crime outside employment.

Earlier this year, the EAT awarded in excess of €11,000 compensation to a former employee of Tesco who was dismissed arising from a conviction for the supply of drugs with intent to sell. The Claimant in that case had been working for the Company since 1996. In 2009, he was charged with a criminal offence in relation to the supply of drugs with intent to sell and he pleaded guilty. When he was charged with the offence, he informed the then Store Manager but he continued in his employment. In 2011, the Claimant received an eight month suspended sentence and, shortly afterwards, the Claimant was placed on paid suspension by Tesco, pending a full investigation into the impact this conviction would have on his employment. Throughout the investigative process, the Claimant argument that the conviction did not bring the Company into disrepute and that it wasn’t even reported in the local paper. In addition, he noted that the Company’s Personnel Manager had provided him with a character reference for the criminal trial. The employee was dismissed and his appeal was heard by the Manager of another store and the decision to dismiss was ultimately upheld.

In this case, the EAT found the decision was unfair and awarded the Claimant compensation. The EAT held that, whilst it was open to the Company to consider dismissal as an outcome, they felt that not enough consideration was given to alternative sanctions, particularly considering the fact that the Claimant had worked with them for 15 years with an unblemished record.

Therefore, some link between the employment and the criminal conviction, or some evidence of reputational damage to the employer, will be necessary to avoid a successful claim by an employee for unfair dismissal. If the employee is given a prison sentence, then the employer may be in a position to argue that the employee essentially is not capable of carrying out their duties under the contract and that it is appropriate therefore to terminate the contract.

In relation to the broader question of a blanket policy of dismissal for criminal convictions, employers should avoid any such policy. It would be preferable for an employer to state, in the contracts of employment and/or the Disciplinary Policy, that an employee may be dismissed for arrest or conviction on a criminal charge, whether the alleged wrong is committed inside or outside of employment, where it makes the employee unsuitable for the work he or she is employed to do, unacceptable to fellow employees or is inimical to the best interest and reputation of the employer. Once those facts can be established, an employer should be in a position to successfully defend a claim for unfair dismissal.

The other more difficult issue that sometimes arises in this context is the issue of parallel investigations – in other words where the employer wishes to conduct an investigation into something for which the employee is also being investigated by the Gardai from a criminal perspective. Most employers are extremely anxious to proceed with an investigation to try and some way ascertain the extent to which the incident or activities within or outside the workplace occurred and how this situation impacts on the ability of the employee to carry out his or her functions, and the degree to which trust and confidence can be maintained in that employee. There are differing approaches between employers on this issue. Some employers will act swiftly with the internal investigation on the employment side whereas others will move to suspend with pay pending the outcome of the criminal process.

In circumstances where you have an employee that is under investigation for an event that occurred outside the workplace, it makes it very difficult for the Company to conduct a full investigation where you do not have access to evidence. This results in a situation where the only way that you can investigate the matter is to put questions to the employee which the employee cannot reasonably answer. The aspect of prejudicing their criminal case may leave a Court or Tribunal sympathetic to the employee’s plight and a Court or Tribunal may come to the finding that an unfair dismissal was effected in the marked absence of fair procedures. Again the prospects of facing a claim are limited where the employee may not be available to take a claim or may not wish to take a claim in such circumstances. There is a risk that the Company faces exposure to a claim for unfair dismissal, however, the Company may ultimately have to make a commercial decision in the matter.

To conclude, there are certain instances where it is appropriate for the employer to conduct an internal investigation and make findings of fact and based on those findings decide whether disciplinary proceedings are necessary.

It would seem, based on the judgement of Geoghegan J in the Supreme Court, that firstly in certain serious cases the employer should stay any internal investigation/inquiry pending the outcome of the criminal case and secondly, it may be “a basically unfair procedure to conduct a disciplinary inquiry on what in effect are identical allegations to the criminal charges based on essentially the same evidence and the same witnesses”.

It is also interesting to note the case of Gallagher v Eircom Limited UD 737/2003, where the employee in question had been sentenced to a prison term of 8 years. Under normal circumstances a long prison sentence would be sufficient grounds for frustration i.e. that the performance of the contract becomes impossible due to an event which was not anticipated by the parties. In this case, the employee argued that he had in fact been dismissed as his employer had waited until one week before his sentence was due to end to inform him that his employment was being terminated. The EAT held that the contract had terminated automatically due to frustration once the employee received the prison sentence.