If an employee has been given notice and subsequently found guilty of gross misconduct do we have to pay their full notice period?
Over the past few months, we have been going through a redundancy programme. Consultation is now completed, employees have been selected, and notices of redundancy have been given out.
One particular employee was selected for redundancy and due to their length of service was given eleven weeks' notice. They are currently in the second week of that notice period.
Since giving them notice of redundancy, it has become apparent that there were some irregularities in the accounts department where they worked. An investigation has taken place, and it is very clear that they have been taking money from the company. In total, they have taken £1,567. This is gross misconduct, and we would normally go through the disciplinary process and then summarily dismiss. We have put the allegations to the employee and they have admitted them. However, they say that they have already been given notice and hence we have to pay them for the full eleven weeks. Is this correct?
This is a difficult and unusual situation. It is similar to what happened in Cavenagh v William Evans Ltd . Cavenagh was Managing Director of the company. It was decided that his role was redundant, and the employer agreed to pay him six months' pay in lieu of notice in line with a clause in his contract. However, before the payment was made it was discovered that Cavenagh had paid £10,000 of the company's money into his pension knowing that he was not entitled to do this. The company found that this was gross misconduct. If this had been discovered prior to the redundancy then Cavenagh would have been dismissed. Hence, the company argued that they were no longer required to make the payment in lieu of notice.
The Court of Appeal found that Cavenagh was entitled to the pay in lieu of notice, because his employment had been terminated due to redundancy. There was no provision in the contract which allowed for the payment in lieu of notice to be withheld if it was subsequently found that he had committed gross misconduct. Also, there was no general principle of law that meant that Cavenagh had no right to pursue the pay in lieu of notice as a debt owed to him by the company.
Given this case, it seems that you are required to pay the notice, unless the situation is addressed in your disciplinary policy or contracts of employment.