Gross Misconduct
|
23.7.2010 In the Court of Appeal decision of Dunn v AAH Ltd, the issue of what amounts to gross misconduct at common law was considered. The case concerned a UK subsidiary of a German company. The finance director and managing director were subject to contractual risk management obligations, which required them to report to the German parent company any significant negative information arising in their operation. For over five months, they failed to report a major issue of potential fraud by one of their suppliers, which exposed the company to millions of pounds worth of losses. They were summarily dismissed for gross misconduct. On appeal, it was argued that the directors had only been guilty of an error of judgement in trying to sort the problem out themselves, rather than involving the parent company. However, the Court of Appeal found that not telling the German parent about the problem for such a long time was a deliberate and persistent failure to follow contractual obligations and this had amounted to gross misconduct. Lord Justice Rix stated that the conduct was "so undermining the trust and confidence which is at the heart of a contract of employment that the employer should no longer be required to retain the employee in his employment, but should be entitled to accept that the contract for employment had been repudiated in its essence, permitting him to terminate it.”
This bulletin is for general guidance purposes only and should not be used for any other purpose.
|
