Misconduct is a justifiable reason for dismissal and in such cases tribunals apply this three-step test.
Did the employer have a genuine belief on reasonable grounds that the employee was guilty of the misconduct in question?
Did the employer carry out as much investigation as was reasonable?
Was the sanction a fair one?
In addition, the employer should have followed a fair disciplinary procedure up to the point of dismissal and any appeal.
If a tribunal decides that a dismissal is unfair because of a procedural error by the employer, it applies the "Polkey test”:
The Polkey test is particularly important in redundancy and misconduct cases. Depending on the answer to the first question, tribunals can reduce any compensation award by a percentage figure, reflecting the likelihood that the outcome would have been the same. The reduction can be up to 100%.
In this case, the unfair dismissal ruling was based on procedural fairness, which brought a Polkey deduction into play.