Although it is usually unfair for an employer to dismiss an employee for gross misconduct without first carrying out an investigation, the Employment Appeal Tribunal (EAT) held in Radia v Jefferies International Ltd that because the company dismissed Mr Radia on the basis of the findings set out in a tribunal judgement, it was within the range of reasonable responses for it to have done so.
Mr Radia was the managing director of Jefferies International which was regulated by the Financial Conduct Authority (FCA). As such his job was considered to be a “regulated position”.
He brought a claim of disability discrimination in May 2015 which was dismissed by the tribunal mainly because of serious concerns about his evidence. For instance, it found that it was "not credible in many respects" and "on lots of occasions evasive". The tribunal found this cause for “grave concern” given that he was a regulated person. It found the company’s witnesses, on the other hand, to be credible and honest. Mr Radia did not appeal this decision.
Before the company received the tribunal judgement from this claim, he brought a second claim for victimisation in September 2016. Shortly after receiving the judgment in early February 2017, the company suspended him pending an investigation. It then dismissed him in early March for gross misconduct because he had acted dishonestly. Although it held a disciplinary hearing at which he was given the chance to discuss the tribunal’s findings, the company failed to carry out an investigation. Mr Radia then issued a third claim for whistleblowing detriment, victimisation and unfair dismissal.
The tribunal dismissed his claim that he had been dismissed because he had made a protected disclosure as he had not been subject to disciplinary action until after the company received the first tribunal judgement in early February 2017, whereas he had made the protected disclosure to the FCA in September 2016.
Although the company had not carried out an investigation, the tribunal found that there was not much that it could have done apart from give Mr Radia the opportunity to explain his side of the tribunal’s findings which happened at the disciplinary hearing. And although he had not been allowed to appeal the decision to dismiss him, the tribunal held that, again, this had nothing to do with the protected disclosure, but because the company believed it had all the evidence it required and would not therefore have made any difference to the outcome.
Mr Radia appealed this decision on two main grounds in relation to the tribunal’s findings about the lack of an investigation and the failure to afford him an appeal.
Dismissing his appeal, the EAT held that although the tribunal had not accused Mr Radia of being dishonest, the essence of its decision was that his evidence was not credible and that was of grave concern because of his status as a regulated person. These findings were very damaging to him, whether or not they amounted to findings of deliberate dishonesty. In any event, Mr Radia himself had not challenged that characterisation by his employer but instead had disputed that his evidence to the first tribunal had been untruthful in any way.
Given that those findings were the reason for his dismissal, it was open to the second tribunal to find that there was no further investigation which the employer could have reasonably been required to conduct and therefore hold that it was within the range of reasonable responses for the company not to carry out an investigation before it heard from Mr Radia.
As for the failure to allow him to appeal the dismissal decision, the EAT held that the tribunal had not made findings that could substantiate its conclusion that even if there had been an appeal it would not have made any difference. This ground of appeal therefore succeeded and the dismissal was unfair.