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Gross misconduct

If you are facing allegations of gross misconduct we have the skills to help you. We are experienced in defending against false allegations raised by an employer for an ulterior motive. We provide quick, practical and honest advice.

We are happy to discuss your problem and provide ideas for a solution along with an estimate. So, please do call us.

How to respond to gross misconduct allegations

We have explained for you some of the basic employment law pointers to consider with gross misconduct allegations.

  • What counts as gross misconduct and what does not?
  • Fighting back.

What is gross misconduct?

There is no set legal definition of gross misconduct. Thus employers enjoy the discretion to define what they consider as gross misconduct. However, it is clear that the gross misconduct must include deliberate wrongdoing or gross negligence. The employee must have acted in a way which fundamentally damages the employment relationship.

Employers often find gross misconduct dismissals expedient. However, that does not make it a fair dismissal and you may have a defence. Based on experience we list some of the background reasons which are unfair:

Gross misconduct examples:

  • Complaints from staff or customers
  • Theft or fraud: which includes expenses;
  • Serious incapability to perform role: which includes suspected addictions;
  • Falsification or unauthorised removal of company records or property;
  • Act(s) of insubordination;
  • Negligence in the performance of duties; and
  • Failure to comply with internal policies; or those defined by professional institutes and the FCA.

Grey areas

Some of the above, if proven, are fair reasons for instant dismissal in most people’s eyes. However, the position is usually not so clear cut.  The employer may lack clear proof that supports their gross misconduct allegation.

Sometimes employers will dismiss on the basis that the employee has done something which has destroyed the relationship of “trust and confidence” between employer and employee. The concept of trust and confidence is not defined in most cases.

Many of the cases we handle fall into the grey areas and we find defences.

Gross misconduct allegations against directors

Directors have duties over and above that of employees.  When a director is being dismissed it is necessary to take into account factors such as:

Fiduciary duties

Directors have  responsibilities and fiduciary duties which extend beyond the duties an employee owes to his employer.  Any charge of gross misconduct has to be looked at in conjunction with an analysis of how it is reasonable to have expected the director to have behaved.  Common debates arise around should the director be the fall guy for the rest of the board?  To what extent is a director expected to take responsibility for his team?


The obligations which can be imposed upon a director to promote the business are of a higher level than those that can be placed on an employee.  What would be reasonably considered as gross misconduct if the act is taken by a director may not be gross misconduct if taken by a more junior member of staff.

Office of director

Firing the director may remove him from employment but may not remove him automatically from the office of director.  A review is needed of the director’s service agreement and the powers of shareholders to remove the director under the articles and shareholders’ agreement.

Fighting back against an allegation of gross misconduct

You are entitled to a fair and reasonable investigation with an opportunity to put your case forward and an opportunity to appeal.

We often deal with cases where the employer has not followed a proper procedure or has applied pressure to create evidence that is not genuine.  We are sensitive to the need for most employees to leave with a good reference and do factor that into our approach.

Evidence of gross misconduct

Evidence is crucial. Employers will usually have prepared some evidence to use against you. Our role is to examine what evidence you may have at your disposal to rebut the gross misconduct allegation. We can manage the collection of evidence and pinpoint what will be important to you.

If you have been cut off from the IT system we know that garnishing evidence is difficult. However, employees do have rights to request information.  Also, the litigation process does include an opportunity for discovery. Discovery is a process where if the employer continues to withhold information the court can order that it be disclosed.

Employee Shareholder dismissed for gross misconduct

For employees and directors who are shareholders or option holders it will be necessary to consider the impact of a gross misconduct finding on share rights. In law, the employment agreement or director’s service agreement is a separate legal document to the rights governing share ownership. In practice this means:

Exclusion of liability under option agreements

Employers are able to exclude liability for dismissing unfairly from the option agreement.   But, express exclusion of liability clauses are needed in the documentation. The exclusion of liability may not extend to contracts involving shares if the share rights have been set out in employment documentation.

Share rights

Share rights are usually governed by a different set of rules which stem from the Companies Act and common law.  It is harder for an employer to exclude liability for dismissing unfairly.  There are protections you may be able to benefit from such as the common law rule that any discretionary decision must not be taken capriciously.

Under the Companies Act minority shareholders have the right not to be prejudicially treated. Any shareholder can apply to Court for orders that certain actions are taken or not taken as the case may be.

In private companies the question of how much your shares are worth if you are forced to sell upon dismissal frequently arises. There is no straight forward answer.  Your position will depend upon the facts.  We do have expertise in the area of private company shares and share valuations and can work with you to resolve issues.

If you are an employee and need expert, clear, practical advice on your rights if you have been accused of gross misconduct or dismissed for gross misconduct, please do get in contact.

Let us take it from here.

Call us on the number below or complete the form and one of our team will be in touch.
020 7438 1060

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