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We are reminded by a recent decision of the Employment Appeal Tribunal (EAT) that the purpose of an investigation should be limited to an investigation of the facts. It is important not to cross the line and move into decision-making territory. An issue that arises is whether recommendations about disciplinary action being taken can reasonably form part of the investigation. In addition, what information can be excluded?

In Dronsfield v. The University of Reading the claimant was a professor who was dismissed for gross misconduct after he had admitted to having a sexual relationship with one of his students. We wrote about this case as a result of it making the headlines in 2016 (re-read here). The claim has in fact been heard by both the Employment Tribunal (ET) and EAT twice.

According to the University’s governance rules, the professor could only be dismissed for conduct of an “immoral, scandalous or disgraceful nature incompatible with the duties of the office or employment”. The head of Dronsfield’s department, Professor Green, was appointed, along with an HR colleague, to jointly carry out an investigation to ascertain whether any such conduct had been established.  

Professor Green and his HR colleague drafted an investigation report and submitted it to the university’s in-house lawyer for review. Following the solicitor’s advice, Green omitted certain parts of the report that would have been favourable to Dronsfield’s case. These included Professor Green’s opinions that there was no evidence that Dronsfield’s conduct had been immoral, scandalous or disgraceful, or that it was an abuse of power or breach of duty.

The investigation recommended that disciplinary action should be taken.  Dronsfield was ultimately dismissed and appealed the dismissal, which was rejected. He then brought a claim for unfair dismissal on the grounds that the amendment of investigation report rendered his dismissal procedurally unfair. However, the ET found that the dismissal had been fair. Although the investigation report had been amended, the ET held that it fairly set out the investigators’ position and the amendments did not mean that it represented a false or incomplete position. The EAT also found that he had been fairly dismissed and, on appeal, the case was remitted to a fresh tribunal.

The fresh tribunal found that the dismissal had been fair as it was fair and reasonable for the investigators to rely on the advice of their solicitors and to omit any “evaluative opinion” in the report. The tribunal found that the report set out the investigators’ position fairly and the amendments did not render it false or incomplete. They found that such opinions should be left to the disciplinary panel and not be contained in the investigation report.

Although the university was ultimately successful in defending the claim against it, this case acts a reminder of the extent of conclusions that should be set out in an investigator’s report and what the investigator’s role is. The investigator should be limited to deciding whether or not there is a case to answer.  The case also referred to now fairly well settled law that HR’s advice in relation to disciplinary matters should be restricted to matters of law and procedure, rather than questions of answerability, which should be reserved for the investigating officer.

Investigators should be trained to ensure that they act within the scope of their role and need to understand what is being required of them. Disciplinary allegations should be narrowly drafted and the procedure to be followed when investigating matters needs to be clear.

To discuss training of investigation managers or a policy review, please get in touch with your usual Dentons contact.

In August 2018 we blogged about the case of Gray v. Mulberry (re-read here).

As predicted, this case has now made its way to the Court of Appeal, which is hearing the appeal this week.

This is the first time that the Court of Appeal has grappled with the problematic area of philosophical beliefs.

What amounts to a philosophical belief is topical, with the Norwich Employment Tribunal finding last week that vegetarianism, whilst being something an individual could “genuinely believe in”, was not a philosophical belief for the purposes of the legislation. A different tribunal will consider the same question in respect of ethical veganism later this month.

Will the somewhat “tick box” criteria set down in Grainger plc v. Nicholson (decided at Employment Appeal Tribunal), with its often unexpected results, survive as the leading authority on this point?

The judgment is awaited with interest.

Earlier this month, the Banking Standards Board (BSB) published the final version of its statement of good practice relating to the regulatory reference requirements established by the FCA and PRA for FSMA authorised firms under the Senior Managers and Certification Regime (SM&CR).

The regulatory reference rules under SM&CR apply to all firms that are authorised persons under the Financial Services and Markets Act 2000 (FSMA), or have permission to carry out FSMA regulated activities in the UK, as well as all insurance and reinsurance firms regulated by the FCA and the PRA.

The guidance contained in the statement published this month was prepared in partnership with BSB members through a cross industry certification regime working group, and is based on the three principles of fairness, proportionality and consistency. In particular, it covers good practice when it comes to both providing and obtaining regulatory references, as well as the type of information to include in a reference.

The purpose of regulatory references, which came into effect in March 2017, was to establish a framework to allow and require firms to share relevant information on certain individuals’ proper conduct, fitness and propriety (F&P) in order to support their assessment of potential new recruits as fit and proper. The rules were established with the overarching goal of preventing the “recycling” of individuals with poor conduct records between firms.  The aim being to prevent financial, legal and reputational damage that individuals in risk-taking roles and with a history of misconduct could cause firms and the industry as a whole, as well as avoiding the negative consequences such damage could have for clients and wider society.

The rules set out three principal responsibilities for firms: to seek regulatory references when considering the appointment of individuals to senior management functions (SMFs), certification roles or as notified non-executive directors (NED); to provide regulatory references when requested; and to revise and, if necessary, update references if information comes to light that would affect a firm’s assessment of an individual’s F&P. These rules require firms to put policies and processes in place to comply with their responsibilities as they relate to recruitment and certification processes, and the guidance published by the BSB this month is intended to assist firms in doing this. The statement provides a high-level set of principles for firms to be able to scrutinise their own policies and procedures against the BSB’s suggested processes, and provides an example minimum standard for them to adopt.

Along with the guidance, the BSB published its summary of the consultation it conducted of its draft guidance back in January 2019. The BSB stressed the importance of firms adhering to the spirit of the regulations, and noted that it had specifically included in the published guidance ways in which firms could ensure that they did this with respect to each of the three key principles it had identified.

Whilst not imposing any new obligations on BSB members or intended to replace any existing regulation, this guidance provides a helpful check for firms on what constitutes a “good” standard set of policies and procedures. Firms should ensure that they review their internal policies against the outlined guidance, and that they remain alive to the requirements of the SM&CR rules when hiring or providing references for individuals covered by the regulation.