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I run a small tech start-up, and I have good reason to suspect that my in-house accountant is stealing company funds, leaving my company in danger of bankruptcy. What burden of proof do I need to dismiss him without the threat of unfair dismissal legal proceedings?
Harry Abrams, employment partner at JMW Solicitors in London, says a key question is how long has the accountant been employed by your company? Start-ups typically have a workforce with low tenure and if this is the case with this employee, the matter is lower risk.
If the accountant has been employed for less than two years, he will have no recourse for unfair dismissal, as currently to bring such a claim an employee needs to have two years’ continuous service as at the date they leave employment. The only legal claims open to the individual would be discrimination (if he believed the dismissal was motivated by a protected characteristic, such as race or disability) or whistleblowing (if he believed it was motivated by the fact he reported wrongdoing by the company). Both of these claims can be brought by any employee regardless of length of service.
Assuming neither of these claims apply, the employee can be dismissed without the threat of a successful claim, even without proof of his actions. It is sufficient if the company merely feels the trust is now gone with this employee. If his misconduct is classified as gross misconduct, he would not be entitled to any notice pay.
If the employee has worked for you for more than two years, there will have to be a fair process before a sanction is issued. Typically, this would include an investigation, providing the employee with detailed allegations as to what the company believes he has done and then a disciplinary hearing, where he would be able to put forward his “defence”. The employee should be permitted to have a companion at the hearing — typically a work colleague or trade union representative.
Often, there is no concrete evidence of misconduct and, in this case, it may need a lengthy forensic investigation to establish whether funds were stolen. However, in spite of this, it will be sufficient if a company has a genuine and reasonable belief that the employee is guilty of the allegations. A company does not require certainty of the misconduct and, notably, a dismissal may be fair even if the employee is later shown not to have been guilty of the alleged misconduct.
The employee should be given a right of appeal following his dismissal.
You should also consider whether to involve the police and to report the individual to the appropriate regulatory body. Finally, you should examine how the government’s employment rights bill will impact your business when it takes effect.
Our next question
I’m planning to move in with my new partner before my divorce is finalised. My partner has a large house, which is closer to my children’s school, so it will be practical for all sorts of reasons, which is why I am keen to make the move sooner rather than later. Will this have any financial implications?
While the risk of legal proceedings can never be extinguished entirely, following the above steps will certainly minimise the risk of a successful claim of unfair dismissal.
The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
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