Employers should welcome a ruling that the fairness of the appeal stage can always cure unfairness in the previous stages of a disciplinary process, provided the overall result is fair. The Employment Appeal Tribunal in Khan v Stripestar Ltd decided that a defective first stage disciplinary procedure can be corrected by a subsequent appeal, and that there are no limits to the defects which can be set right.

Stripestar Ltd ran a business selling and repairing cars. Mr Khan was responsible for running the repairs workshop including the allocation of work. Mr Khan purchased a car from a customer and used the workshop to carry out repairs. His managers became aware of this and made enquiries. At a disciplinary hearing he was dismissed on the grounds that he had made an unauthorised purchase of a customer’s car, used the customer’s name on a job card to carry out the repairs and removed the car from the premises without paying for the repairs. For the appeal the senior manager scrupulously interviewed relevant staff, considered the business’s disciplinary policy and the worker’s behaviour, and whether it amounted to gross misconduct – and made his decision impartially and fairly. He concluded that Mr Khan’s actions amounted to gross misconduct and therefore the appeal was unsuccessful.

Mr Khan brought a claim for unfair dismissal. The original disciplinary hearing was found to be procedurally and substantively unfair – it lasted no longer than six minutes! He was not given any opportunity to explain himself. The internal appeal, however included an investigation which included interviewing technicians in the workshop and the two managers initially involved. This appeal was found to have been procedurally fair.

The EAT found that:

“there are no limitations on the nature and extent of the deficiencies in the first stage of the process that can be cured by a thorough and effective appeal. Whereas here, an employee is summarily dismissed without proper investigation or inquiry, that dismissal will be unfair unless it can be shown that the subsequent procedure was sufficiently robust as to provide the overall fairness that the law requires.”

Peter Stanway, our BackupHR™ legal expert comments:

The process was still capable of being fair overall where the subsequent appeal process was thorough and reasonably conducted, against a background of sufficient evidence of gross misconduct. So, where there may be concerns about the robustness and fairness of an initial disciplinary process, the appeal gives an opportunity to correct matters. However, this should be seen as a safety net just in case things go wrong; the aim should always be to do things correctly at every stage, rather than rely on the appeal process correcting any failures.

Action points

  • However certain you are that an employee is guilty of gross misconduct; you should stick to a fair disciplinary process. That would probably have saved the employer a large amount of time, stress and money.
  • If you realise you have made a mistake in a disciplinary process, you should try to rectify the situation.
  • However, any award could have been reduced, substantially, because of contributory fault, and because a fair procedure would have resulted in dismissal. This is called a “Polkey reduction”. We would advise strongly against relying on Polkey and contributory fault. It is a risky strategy, would not diminish the bad publicity of a finding of unfair dismissal and would probably still result in costly litigation.
  • Follow fair procedures as far as possible, but – it’s rarely too late to, at least, partly salvage the effects of an error.

Despite this ruling, it is always better to get things right during the initial stages, and limit the chance of any litigation and risk an argument that the fairness of an appeal is not sufficient to cure unfair elements earlier in the process.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.