(Allegedly) criminal employees: how to handle the related HR issues

August 2024

How should an employer respond when an employee is accused, charged or convicted of a crime?

Fortunately, this is not a day-to-day issue that HR teams tend to deal with, but when it does arise, it can raise complex employment law issues and employers may have a PR crisis on their hands.

This has been a hot topic in the UK recently, with prominent BBC newsreader, Huw Edwards, charged with (and later pleading guilty to) sexual offences and recent riots across the country resulting in lots of quick convictions.

In this article, we unpack the employment law elements and risks, and give some practical tips on how to mitigate risks.

The employment law consequences of employee criminal activity

When an employee is implicated in a crime, many employers will immediately consider dismissal. That may be because of risks to the business’ reputation, concerns about the individual’s ability to do their job, or simply because of the employee’s misconduct.

Just because an employee is accused – or even convicted – of a crime does not give employers carte blanche to dismiss without legal risk. Where an employee has two or more years service (for now, though the qualifying period for unfair dismissal is likely to be gone soon – see our update on Labour’s plans) they will have the right to unfair dismissal.

Employers need to follow a fair process and have a fair reason for dismissal.

The two most likely permitted fair reasons in this context are conduct and “some other substantial reason.” The latter includes potentially relevant categories such as reputational risk, breakdown in trust and confidence, and irreconcilable differences amongst colleagues. The exact reason will of course depend on the alleged crime and the effect on the business.

The appropriate response will largely depend on the stage the allegations have reached, both internally and with law enforcement. However, in some cases, the employer may simply choose to accept the risk of a claim from the (allegedly) criminal employee in order to move quickly to protect the business and/ or other employees.

Stage 1: Employee is subject to allegations of criminal activity

When an employee is accused of potential criminal conduct, whether at work or outside of work, the employer should not assume guilt but should, as far as possible, investigate and come to a view on whether invoking a disciplinary procedure is necessary.

Employers do not need to wait for a police investigation to conclude to carry out their own investigation or to take fair and reasonable action. Investigations in this context can be tricky as employees may be unwilling to participate in the employer’s process because they do not want to prejudice their position in potential criminal proceedings, or the employee may be unable to participate because they are unwell and signed off work. That does not prevent an employer from taking fair and reasonable action based on the information available to them, however.

The employer’s investigation should focus on the effect of the alleged criminal conduct on the employee’s ability to carry out their job and the potential wider impacts on the employer. For example, if a head of finance is facing charges of tax fraud, the investigation should look into whether this constitutes misconduct under the employee’s contract or the employer’s policies, and whether this has broken the employer’s trust and confidence in the employee. Even where the employer’s investigation cannot conclude whether the criminal conduct happened or not, it may be that there has been a breach of policy that warrants disciplinary action.

Interim measures pending investigation, such as removal from specified duties or suspension pending investigation, might be appropriate. This can be particularly true where the allegations raise safeguarding or regulatory concerns.

The employer may also consider it appropriate to report the matter to the police if it is not already under police investigation.

Stage 2: Employee is charged with a crime

When an employee is charged with a crime, that does not give an automatic right to dismiss or take disciplinary action, though it is likely that employers will feel more pressure to take action.

Similar considerations to when an employee is accused of a crime continue to apply when they are charged and employers should be careful that they are coming to a fair and reasonable conclusion based on the information available to them after investigation.

A further complication at this stage is that ongoing criminal proceedings may keep the employee away from their job as they will be attending interviews, receiving legal advice and possibly being held in custody. Colleagues and clients may become aware of the charges, leading to reputational damage of the company and a breakdown in workplace relationships. These are factors that need to be taken into account during the investigation and considering any disciplinary action.

Stage 3: Employee is convicted of a crime

Where an employee is convicted and the disciplinary process is still ongoing, employers should seek to conclude the disciplinary process swiftly. Where an employee is in custody and they cannot participate in the employer’s disciplinary process, they should be given the opportunity to make representations in writing. If the employee cannot or chooses not to engage, decisions can ultimately be made in their absence.

If the employee is in prison custody – either awaiting trial or on being convicted – they naturally will not be able to perform their part of the employment contract and so the employment contract can come to an end by operation of law (this is called 'frustration'). This is not a dismissal and there is no clear bright line where the contract will become frustrated, so it is recommended to also complete the disciplinary process. There is no obligation on an employer to keep the employee’s job open if they will be in custody for weeks, months, or even years.

Do other factors outweigh the employment law risk?

A key question an employer will have to ask in these circumstances is “do other factors outweigh the employment law risk?” There may be circumstances where an employer cannot let a lengthy investigation into serious issues play out for months and need to take swifter action.

PR risk: In high-profile cases (like the Huw Edwards case, though this is not the approach the BBC took), it may be that the employer chooses to take action quicker to protect the business, taking the view that the risk of unfair dismissal is outweighed by the potential reputational or financial risk to the business.

Balancing the interests of others: It may be that an employer needs to look into and balance the interests of others who are potentially affected. For example, if the accused employee works with children or vulnerable adults, employers will have to ensure they are also protecting those individuals.

That does not mean that you should rush into decisions. An employee is still owed a duty of care by their employer even if they are accused, charged, or even convicted of a crime. Acting too quickly can have potentially significant impacts on the employee, from their reputation to their mental and physical health, when they may be entirely innocent. In the case of Huw Edwards, to take him off the air or dismiss him when the allegations were first raised had the potential of ruining the career prospects of an innocent person, given his public-facing role.

Practical tips

Have clear policies and expectations on conduct outside of work: This can be useful to underpin any action take where employees are accused of wrongdoing outside of work.

Try not to rush: While in extreme cases the circumstances may be so serious that urgent action is needed, in most cases you should take time to properly think through your risks and the best course of action.

Consistent practice: While employees implicated in crimes are rare, employers should seek to take a fair and consistent approach, in line with their disciplinary procedures, insofar as possible.