What is gross misconduct?

For employers, one of your top priorities should always be maintaining a fair, productive and safe work environment. Central to this is understanding and addressing serious breaches of conduct, commonly known as gross misconduct. At Sapphire HR, we appreciate the complexities employers face when navigating such delicate situations. This blog post aims to give you a greater understanding of gross misconduct and its various forms as well as providing actionable insights, including the challenging scenario of tactical resignations. 

What is gross misconduct? 

Gross misconduct refers to an act committed by an employee that is so serious it fundamentally breaches the employment contract, justifying immediate dismissal without notice or payment in lieu of notice (PILON). Gross misconduct is typically reserved for acts that undermine the trust and confidence essential to the employment relationship. 

The key characteristic of gross misconduct is its severity. It often involves actions that: 

• Cause serious harm or a significant risk of harm to the business or its employees  

• Are a deliberate breach of the employer’s rules or policies 

• Demonstrate a clear intent to defraud or cause damage 

• Make the employee’s continued employment untenable 

While there’s no exhaustive legal definition, a robust employment contract and a clearly communicated disciplinary policy should outline what your organisation considers gross misconduct. This helps to ensure that employees understand expected standards and employers can demonstrate fairness and consistency throughout disciplinary processes. 

The different types of gross misconduct

Gross misconduct manifests in different ways across industries and roles. Let’s explore some common categories and how they might present themselves: 

Fraud 

Fraud involves intentional deception for personal gain or to cause loss to another. In an employment context, this can take many forms, including: 

• Financial fraud (E.G. a cashier manipulating sales records to pocket cash) 

• Time fraud (E.G. an employee falsely logging overtime) 

• Data fraud (E.G. a healthcare professional falsifying patient records)  

The impact of fraud erodes trust, damages reputation and may have legal consequences for both the individual and the organisation. 

Physical violence

Physical violence in the workplace is a zero-tolerance offence and encompasses any act of physical aggression, assault or threat of physical harm that creates a hostile and unsafe environment. This may be: 

• An employee physically attacking a colleague or customer 

• Credible threats of violence  

• Engaging in a physical fight on company premises  

• Damaging company property or a colleague’s belongings

Gross negligence  

This goes beyond simple mistakes or errors and demonstrates a lack of care for duties or safety of others. Some examples include: 

• Breaching safety protocols to speed up a production process in a factory setting 

• An employee making significant, unapproved and highly risky investments 

• A developer deliberately storing confidential information on an unencrypted personal device 

• A doctor failing to follow basic surgical procedures  

The distinction between negligence and gross negligence often lies in the level of recklessness or deliberate disregard for standards and potential consequences. 

Serious insubordination 

Insubordination is the act of defying or refusing to obey an authority figure or legitimate instruction. It is classed as a serious insubordination when it fundamentally challenges the employer’s authority. This may manifest itself as: 

• A retail assistant refusing to obey reasonable orders to serve a customer or tidy a section of the shop 

• An employee publicly challenging and ridiculing a manager’s instructions in front of colleagues 

• Displaying disruptive behaviour, such as encouraging others to disobey instructions 

Navigating tactical resignations in gross misconduct cases

One of the trickiest situations employers can face during a gross misconduct process is when an employee attempts a tactical resignation. This occurs when an employee resigns mid-investigation or during a disciplinary hearing, hoping to avoid a formal dismissal for gross misconduct. While this can be frustrating, it’s crucial to handle it correctly. Here are five key points to consider: 

1. An employee has a right to resign at any time, even if disciplinary proceedings are ongoing. Employers cannot reject a resignation because misconduct is being investigated. 
2. If the allegations are serious, you can choose to continue the disciplinary process. This is important if operating within a regulated industry such as finance, healthcare or the legal sector as completing the process may be legally or ethically required for reporting purposes. 
3. Continuing the process can save costs if an employee is serving a long notice period. If a formal dismissal for gross misconduct occurs before their notice period ends, you would not be legally obliged to pay the remainder of their notice period. 
4. Many employment contracts, particularly for senior roles or those involving performance-related pay, include good leaver and bad leaver provisions. Gross misconduct can significantly impact the amount an employer would otherwise have to pay on exit and can affect benefits such as share schemes, accrued bonuses and Long-Term Incentive Plans (LTIPs).
5. An unproven allegation cannot usually be referred to in response to any future reference request. If you choose not to continue the disciplinary process, you should restrict yourself to a factual reference, providing only dates of employment and job title. If you complete the process and a finding of gross misconduct is formally made, then you can usually refer to this in a reference, provided it’s factual and fair. 

Always check your company policy on references and consider seeking legal advice to ensure compliance and mitigate risk. 

The cornerstone of fair dismissal 

Regardless of the severity of the alleged misconduct, the principle of fair dismissal is essential for a business to abide by UK employment laws. For any dismissal to be considered fair, an employer must:  

• Have a fair reason which falls into the category of conduct, capability, redundancy, illegality or Some Other Substantial Reason (SOSR)
• A fair procedure, which involves:
  • A prompt and thorough investigation (E.G. witness statements, documentation reviews, CCTV or digital records)
  • Clearly informing the employee in writing of the allegations against them and the potential for dismissal
  • Ensuring the employee is aware that they have a statutory right to be accompanied at any formal disciplinary hearing by a trade union representative or colleague
  • Conducting a fair hearing where the evidence is presented and the employee has a full opportunity to present their case
  • Making a decision based on reasonable grounds and after a thorough investigation
  • Giving the employee the right to appeal the decision

The ACAS Code of Practice on Disciplinary and Grievance Procedures provides essential guidance on what constitutes a fair procedure. 

How Sapphire HR can help

As an employer, gross misconduct allegations are fraught with potential pitfalls. Getting it wrong can lead to costly unfair dismissal claims, reputational damage, and a breakdown of trust within your workforce. 

We offer expert guidance and support through every step of the disciplinary process, from initial investigation to final decision-making.  

We can help you draft and review robust disciplinary policies, ensuring they are clear, legally compliant, and effectively define gross misconduct for your organisation. We can also offer guidance on evidence gathering, witness interviews and maintaining impartiality.  

We can aid in managing disciplinary hearings, helping you develop a strategy to protect your business’s interests in the case of tactical resignations and minimise the risk of legal challenges. 

For SMEs facing challenging gross misconduct situations, we deliver the practical, jargon-free advice and robust HR systems you need to navigate them confidently. Reach out for a confidential consultation today.