Suspending an Employee on Pay Pending an Investigation-Vital Lessons from the High Court

suspension with pay

Suspension with full pay.

Not a problem for the employer?

Think again.

A High Court decision from April, 2015 provides helpful clarification about suspending an employee as a precautionary measure pending an investigation.

This would be the default position for many employers where there is an allegation against an employee and an investigation is to be carried out to look at the merits of the allegations.

The case of THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND AND JAMES REILLY took a close look at suspending the employee on full pay in this case.

Mr. Reilly was an assistant branch manager with the Bank of Ireland and an allegation arose about the breach of the Bank’s internet/email policy due to the sending of inappropriate/pornographic emails by some members of staff. Mr. Reilly’s branch manager informed him verbally that he was being put on paid suspension as “an issue had arisen in relation to emails”. He received no further information at the time of his suspension, and his branch manager was not aware of the detail of the allegations. He was simply delivering the message from his superiors at Head Office.

Suspension a “very serious matter”

The High Court recognised that suspending someone-even on full pay-is a very serious measure with potential reputational damage which may never be overcome, even if the employee is subsequently found to be not guilty of the allegations. It held that a suspension should only be imposed “after full consideration of the necessity for it pending a full investigation” of the issues.

The Court identified four circumstances where it would be justified:

  1. To prevent repetition of the conduct complained of;
  2. To prevent interference with evidence;
  3. To protect individuals at risk from such conduct; or   
  4. To protect the employer’s business and reputation.

In this case the Court held it was unnecessary to suspend Mr. Reilly as the bank had safeguarded the evidence, the allegations were so serious that it was improbable that Mr. Reilly would transgress again, and knowledge of the allegations was not widespread so there was no danger of reputational damage.

How does this affect you as an employer?

Here are 7 takeaways:

  1. Have a disciplinary procedure
  2. Ensure it provides for paid suspension pending the outcome of an investigation and disciplinary procedure
  3. Give the employee the opportunity, when being told of the reasons for the suspension,to explain or defend himself
  4. Even though the employee is not entitled to “the full panoply of fair procedures” he is entitled to “at least a rudimentary explanation of the reason for the suspension which admitted of the possibility of some exculpatory response.” This did not happen here as Mr. Reilly’s line manager was simply acting on instructions from Head Office and was not actually aware of the allegations.
  5. Write to the employee giving him an explanation as to why, in broad terms, he is being put on paid suspension
  6. Details of the allegations should be set out in the invitation to the investigation meeting letter
  7. Carry out the investigation, and if appropriate the disciplinary hearing, without delay.

“Justice delayed is justice denied”, and the longer the employee is out the greater danger of reputational damage.

The Fair Dismissal test

The Court also reaffirmed the view to be taken by Courts and decision makers in respect of a fair dismissal. The Court will not substitute its view for the view of the reasonable employer.

The Unfair Dismissals Act 1977 (as amended) states:

  • in determining if a dismissal is an unfair dismissal, regard may be had, if the rights commissioner, the Tribunal or the Circuit Court, as the case may be, considers it appropriate to do so—

(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal,…

This section makes it clear that the reasonableness of the conduct of the employer needs to be considered.

The Court agreed that the correct test is this:

‘was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably take a different view.(British Leyland UK Ltd v. Swift [1981] IRLR 91, Lord Denning MR).

As Judge Linnane stated in her decision in Allied Irish Banks v. Purcell [2012] 23 ELR 189

It is clear that it is not for the EAT or this court to ask whether it would dismiss in the circumstances or substitute its view for the employers view but to ask was it reasonably open to the respondent to make the decision it made rather than necessarily the one the EAT or the court would have taken

In conclusion, this case is well worth reading and drawing valuable lessons from for employers and Hr professionals because it is clear that the default position of suspending without pay, in all circumstances, in order to investigate allegations is inappropriate.

Read the full decision here: Bank of Ireland v James Reilly [2015] IEHC 241