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Employees ‘rightfully’ sacked for ignoring contracts

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The Court of Appeal has upheld rulings involving two financial workers who failed to report instances of fraud as stipulated within their contracts, “undermining trust and confidence” which resulted in termination of their employment.

In Dunn v AAH Ltd, the employees became aware of fraud amongst their suppliers, costing their company approximately £10.9m, but failed to alert their parent company for almost five months, despite mandatory guidelines instructing employees to report fraud.

Within both employees’ contracts, express obligations required them to inform board members of all matters which breached risk management policies. As they failed to inform management immediately, both employees were dismissed without notice, accused of gross misconduct.

The employees’ claims for damages were unsuccessful and the Court of Appeal upheld the Company’s decision to dismiss, confirming that employees can be dismissed for gross misconduct when not following an employer’s instructions even though their specific behaviour may not itself be forbidden in the employment contract.

The Court of Appeal upheld that gross misconduct can undermine employers’ faith in their staff enough that employers should not be required to retain the employee and should be entitled to terminate employment immediately.

The case highlights the importance of contract scrutiny for both employers and their staff. While employers will welcome the court’s strengthening of gross misconduct procedures, employees should take note of company guidelines and stay within the parameters set in contracts for employment.

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Written by Andrew Hodges

April 24, 2010 at 4:22 pm

Posted in Comment, LinkedIn

Tagged with , ,

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