In many industries, it is a requirement that certain individuals performing regulated activities are, and remain, fit and proper. For example, these requirements will apply to certain individuals who are subject to the oversight of financial services regulators such as the Hong Kong Monetary Authority, the Securities and Futures Commission (SFC) or the Insurance Authority. Assessing whether an individual is fit and proper however, is not always straightforward. Issues which, on their face, may not seem to be compliance risks could in fact be so when viewed through the lens of the fit and proper test.
Tag: gross misconduct
Employers have a range of options at their disposal for dealing with disciplinary matters, from informal verbal warnings through to summary dismissal (i.e. dismissal without notice or payment in lieu). Summary dismissal is not something which should be taken lightly, as it is not always easy for managers and HR professionals to know where a court will draw the line and treat an employee’s conduct as serious enough to warrant summary dismissal. A recent decision is a timely reminder that the consequences of getting this decision wrong can be significant for the employer.
A High Court has held in Various claimants v Barclays Bank an employer vicariously liable for the acts (in this case, alleged sexual assaults) of a doctor engaged by it as an independent contractor to carry out medical assessments on provisionally successful job applicants to ensure fitness for role. The Court ruled that the facts satisfied the test for vicarious liability, namely that the relationship with the perpetrator was one of employment or quasi-employment (involving sufficient control), and that the wrong was sufficiently closely connected with that relationship.
A recent High Court ruling serves as a reminder to employers not automatically to suspend an employee accused of misconduct while an investigation takes place. Employers should first seek the employee’s response to the allegations and consider whether suspension is actually necessary in order to carry out a fair investigation (or for other legitimate reasons) or whether there may be other options such as a temporary reassignment. It may also be relevant whether the contract of employment or handbook policies give an express right to suspend and set out when suspension may be appropriate.
A recent Interpretation issued jointly by Beijing Higher People’s Court and the Beijing Labor Dispute Arbitration Commission on 24 April 2017 suggests that, in Beijing, it may be possible to terminate an employee for a violation of professional ethics. However, this ground will apply only in rare circumstances.
The Court of Appeal has upheld a tribunal ruling that deliberate resistance by a manager asked to implement organisational change was gross misconduct. Given her senior position, the manager's failure to cooperate with, support or lead a change, on the grounds she disagreed with it, along with unprofessional behaviour at a meeting, were fair reason to dismiss. (Adeshina v St George's University Hospitals)
Employment contracts often provide that employees may be dismissed without notice or payment in lieu of notice for 'serious misconduct'. However, what constitutes 'serious misconduct' is not always clear. The recent decision of the Court of Appeal of Singapore in Phosagro Asia Pte Ltd v Piattchanine  SGCA 61 provides some clarification on this question.
Employers may be entitled to summarily dismiss an employee for a grossly negligent failure to act, for example where the employee is senior and fails to uphold a key policy of the employer.
Where an employer is contemplating dismissal for gross misconduct on the basis of disputed and uncorroborated evidence, fairness may require it to carry out a broad investigation, including into evidence that goes to credibility.
In Bandara v British Broadcasting Corporation, an employer dismissed an employee in reliance on both recent gross misconduct and a prior final written warning which the tribunal found to have been ‘manifestly inappropriate’.