Partners in a partnership would be well advised to keep comprehensive documentation at every stage...
Financial institutions are entitled to expect their staff to display a high level of probity. An Employment Tribunal (ET) made that point in denying compensation to a bank employee despite having found that his dismissal was unfair (Johnson v Santander UK PLC).
The man had been working for the bank in a highly responsible role for only a short while when an internal investigation revealed that he was a director of an external company. He had not obtained the bank's consent to hold that appointment. Further inquiries indicated that large sums of money were moving in and out of the recently formed company's accounts, with no obvious reason why.
The bank raised concerns that he had, over a seven-month period, apparently made 376 payments to gambling companies, totalling over £100,000. An issue was raised concerning potential coercion after it emerged that he had made prison visits. A £48,000 bounce back loan had also been made to the company of which he was a director in circumstances that the bank regarded as suspicious.
He was suspended following an investigatory meeting and was later arrested, questioned and released under investigation. At a disciplinary hearing, three allegations were found proved against him. There were, amongst other things, said to be financial irregularities across his bank accounts to the value of about £2.7 million which did not fit either his employment profile or the company's projected turnover. He was ultimately dismissed on grounds of gross misconduct.
After he launched proceedings, the ET identified a number of defects in the internal investigation and ruled that his dismissal was unfair. Whilst the investigation was, in some respects, commendable, it lacked procedural rigour and was something of a moveable feast. Amongst other things, he was given little notice of the investigatory meeting and the investigation report was not disclosed to him.
Notwithstanding the procedural problems and the flaws in the investigation, the ET found that the bank genuinely believed the allegations were established, and that it held that belief on reasonable grounds. His dismissal fell within the range of reasonable responses open to the bank given its assessment that his actions were wholly incompatible with his role in assessing risk.
He had shown no insight into the exceptional seriousness of the matter, viewing the allegations as mere technical breaches of the bank's procedures. His own culpable and blameworthy conduct had contributed to his dismissal and the ET found that a fair dismissal would have occurred in any event, notwithstanding the procedural defects. On that basis, his compensation was reduced to zero.