Termination of Employment Due To Custodial Sentence

What does it mean for an employer if one of their employees is convicted of a crime and sent to prison?

Terminating employment due to a criminal conviction can present significant challenges for UK employers. It involves balancing the need to protect the business, its reputation, and other employees, while adhering to employment law and ensuring fair treatment of the affected worker.

Employers may thing to jump straight to dismissal, terminating the employee’s contract, not least because the employee will no longer be available for work, but also due to associated issues such as bringing the company into disrepute.

However, as with all dismissals, employers must proceed with care and ensure they are meeting their obligations in terminating any contract of employment fairly and lawfully or risk the employee bringing a tribunal claim against them.

A criminal conviction does not automatically justify dismissal. Employers must assess whether the offence directly impacts the employee’s role, their ability to perform their duties, or the reputation of the organisation. For example, convictions related to dishonesty may raise concerns for employees in finance roles, while violent offences may be relevant in jobs requiring customer interaction or vulnerable individuals’ care.

Employers are required to follow a fair disciplinary process before making any decisions. This includes investigating the circumstances of the conviction, providing the employee with an opportunity to explain, and considering any mitigating factors. A failure to adhere to fair procedures could result in claims of unfair dismissal.

Employers must also respect data protection rules when handling information about criminal convictions, as these are considered sensitive personal data under the UK GDPR.

The following article provides employers with some best practice advice on termination of employment due to an employee receiving a custodial sentence.

 

What are an employer’s options if an employee has been sent to prison?

 

If an employee has been sent to prison, the employer’s options will depend on factors such as the nature of the offence and duration of the sentence, and the employee’s situation in general. Potential courses of action could include:

 

• Taking disciplinary action against the employee, with the potential outcome of dismissing them.
• Taking disciplinary action against an employee with the potential outcome of imposing a lesser disciplinary sanction.
• Taking no disciplinary action, but instead keeping the employee’s job open for them pending their release from prison.

 

Employers are advised to approach the matter with caution and to take the time to consider the specific circumstances before making a decision on the next steps.

 

Dismissal due to custodial sentence or new criminal conviction

 

Faced with this scenario, most employers will at least consider the possibility of dismissal, given that any offence for which an employee has been handed a custodial sentence is likely to impact the employment relationship and risk bringing the employer into disrepute — especially where a conviction has been widely reported in the press.

Under the Employment Rights Act 1996, fair reasons for terminating an employee’s contract of employment include:

 

• the employee’s conduct or capability
• by reason of redundancy
• a statutory restriction that prevents the employment from continuing
• some other substantial reason that justifies dismissal.

 

Being convicted of a criminal offence in itself can amount to ‘misconduct’, even if the offence was committed away from work or outside working hours. This is because the scope of misconduct as a potentially fair reason for dismissal is not strictly limited to conduct in the course of, or within the scope of, employment. The commission of any offence serious enough to warrant a custodial sentence could be considered a breach of company policy or, in any event, capable of seriously damaging an employer’s reputation.

The nature of the offence can also compound the seriousness of the misconduct, for example, where a person who works in a position of trust, including handling money for a business, is found guilty of a dishonesty offence, such as fraud or theft. In these circumstances, the employee would no longer be considered suitable to continue in their role or undertake the responsibilities required. Equally, a person found guilty of a violent crime or sexual assault may no longer be deemed suitable to work within the employer’s business, where the nature of their conviction could seriously impact working relationships with colleagues or clients.

In other cases, such as where the employee works with children or young adults, having a criminal offence can give rise to ‘a statutory restriction that prevents employment continuing’. If the employee is found guilty of a serious driving offence resulting in the loss of their licence, this would also prevent them from continuing in their role.

Finally, being unavailable for work because the employee is incarcerated in prison, and therefore unable to perform the contractual duties required of them, is likely to fall under either ‘capability’ or the statutory catch-all category of ‘some other substantial reason’.

As such, an employee being sent to prison could constitute fair grounds for dismissal, provided the employer acts reasonably in dismissing the employee for that reason and a fair process is followed.

 

Legal risks for employers

 

Where an employee has been imprisoned, many employers wrongly assume that this will automatically justify dismissal. However, provided an employee has accrued at least two years’ service, the law on unfair dismissal means that a thorough investigation and examination of the available facts should be conducted before a decision to dismiss is taken.

Even though the employer can, in most ‘custody’ cases, easily establish a fair reason to dismiss, they must still act reasonably in dismissing the employee for that reason and follow a fair dismissal process — including where an employee is guilty of gross misconduct. This is misconduct so serious that it justifies summarily dismissing an employee, ie; without notice or pay in lieu of notice, although summary dismissal is not the same as instant dismissal. For any dismissal to be fair, regardless of how serious the misconduct is, this must first be investigated and a reasonable procedure followed before reaching any decision.

Where a criminal offence is committed in relation to something that has occurred at work or in the course of the individual’s employment, the employer would be entitled to treat this as a serious misconduct matter. This is because the commission of an offence during working hours would amount to a fundamental breach of the implied duty of mutual trust and confidence between the employer and employee. The situation is slightly more complicated where the conviction is related to an incident that took place away from the workplace and is entirely unconnected to the person’s employment. In these cases, consideration must be given by the employer as to the circumstances surrounding the offence, and how the employee’s conviction and incarceration impacts their employment and the business as a whole.

In cases where there is no adverse connection between the commission of the offence and the employment in question, the key factor for consideration is whether the conduct and period of custody will have a significant bearing on the employment relationship and other working relationships. The fact that an employee has been convicted of an offence serious enough to warrant imprisonment, and that they will be unavailable to work for the duration of their sentence, is usually but not necessarily sufficient reason to terminate their employment.

Criminal conduct that results in a custodial sentence for an employee can also potentially frustrate an employment contract, bringing it to an end automatically. This is because the requirements of the contract cannot be fulfilled. However, the possibility of frustration generally applies to lengthy custodial sentences, so cannot always be relied on by an employer in justifying a decision to dismiss in the context of shorter prison sentences.

 

Failure to follow a fair dismissal procedure

 

Even where termination of employment in the event of a custodial sentence can be clearly justified, the manner in which that decision is reached must still be fair and reasonable in all the circumstances. The importance of a fair procedure here cannot be underestimated.

In the case of Harvey v Vista Hotels Ltd (ED002/15), the employee succeeded in a claim for unfair dismissal even though he was imprisoned for a period of 18 months for grievous bodily harm. This incident took place on staff accommodation but the employee was off duty at the time. Following his sentencing, Mr Harvey was dismissed by the hotel.

The tribunal found that even though the employee’s actions constituted a potentially fair reason for dismissal on grounds of misconduct, the dismissal was still unfair because the hotel had failed to follow a proper procedure. Prior to dismissing Mr Harvey, there was no attempt to interview him in prison to ascertain his version of events, or speak to any witness or otherwise investigate what had happened. The employee only learned of his dismissal six months later. The employer claimed to have sent a termination letter to prison, but no copy of this letter was located. This meant the employer was unable to demonstrate that they had notified Mr Harvey of their decision to dismiss or offered him any right of appeal.

In finding for Mr Harvey, the employment tribunal was persuaded that the absence of any disciplinary process with no right of appeal didn’t fall within the band of reasonable responses that are open to an employer in justifying the fairness of a summary dismissal. Given the seriousness of the employee’s conduct in this case, this decision may come as a surprise to many employers, but the tribunal’s judgment highlights the importance of following a fair disciplinary and dismissal procedure, even in cases of clear gross misconduct.

 

How to dismiss an employee who has been sent to prison

 

Many employers will already have in place a written disciplinary procedure, although the Acas Code of Practice on disciplinary and grievance procedures advises employers to:

 

• Deal with issues promptly, without unreasonably delaying hearings, decisions or confirmation of those decisions
• Act consistently when making disciplinary decisions
• Carry out any necessary investigations so as to establish the facts of the case
• Inform employees of the matters being investigated and give them an opportunity to put their case in response before any decisions are made
• Allow employees to be accompanied at any disciplinary hearing
• Allow an employee to appeal against any disciplinary decision made.

 

An employer may need to make a number of adaptations to their normal disciplinary process due to the employee’s imprisonment. This could include visiting the employee in prison to take a statement of their version of events whilst on remand. Even if an employee has already been convicted and sentenced, the employer should still seek the employee’s side of the story, as there could be mitigating factors that may impact the employer’s decision-making.

Only once the employer has fully investigated the matter and listened to what the employee has to say should a final decision be made as to whether or not to dismiss them. This decision should not focus solely on the fact that the employee has been imprisoned, but rather the employer should consider all the surrounding circumstances before deciding whether or not to dismiss an imprisoned employee, including whether a lesser sanction might be appropriate.

In making any final decision, the employer should take into account:

 

• the nature of the offence committed
• the length of the sentence, bearing in mind that offenders normally serve only half
• the role performed by the employee and the relevance of their criminal conduct
• the impact the conviction has on the employee’s continued suitability for that role
• the impact the conviction may have on the organisation and its’ reputation
• the impact the conviction has on relations with co-workers, clients and customers
• the employee’s previous track record and employment history
• the nature and extent of any mitigating factors
• the nature and extent of any safeguarding steps that can be taken to prevent any reputational risk or damage to working relationships
• the effect of the employee’s absence on the business.

 

This list is not exhaustive, but includes some of the most important factors that must be considered by an employer on termination of employment in the event of a custodial sentence. Each case will need to be decided on its own set of facts, for example, if the employee is imprisoned for a short period of time, for an offence that’s unrelated to their work, it may be reasonable for the employer to hold the employee’s job open pending their release.

Even in cases where the conviction and period of incarceration has a significant bearing on the employment relationship and the employer’s business, such that dismissal is unavoidable, the employer must still follow a fair process and provide a right of appeal. If an employer acts with total disregard for any disciplinary procedure or the Acas Code of Practice, regardless of the fact that an employee is in prison, a tribunal is likely to find that any dismissal is unfair.

 

Need assistance?

 

DavidsonMorris provides specialist employment law advice to employers on all aspects of workforce management, including disciplinary and dismissal procedures. For expert advice, contact us.

 

Employer FAQs

 

Can an employee be dismissed for a criminal conviction?

An employee can be dismissed if their criminal conviction directly impacts their ability to perform their role, breaches trust, or harms the organisation’s reputation. However, a fair process must be followed.

 

Does a conviction always lead to dismissal?

No, dismissal is not automatic. Employers must assess whether the conviction is relevant to the employee’s duties or the organisation’s interests.

 

What process should employers follow before dismissing an employee?

Employers must conduct a fair disciplinary process, including an investigation, a meeting with the employee to discuss the situation, and consideration of any mitigating factors before making a decision.

 

Do employers need to wait for a court outcome before acting?

Not necessarily. If the allegations alone impact the business or the employee’s ability to work, an employer may take action. However, careful consideration is required to avoid unfair dismissal claims.

 

Can an employee claim unfair dismissal if dismissed for a conviction?

An employee may claim unfair dismissal if the employer fails to follow a fair process or if the dismissal is not justified by the nature of the conviction.

 

Are employers allowed to ask about criminal records?

Yes, but they must comply with the Rehabilitation of Offenders Act 1974, which restricts questions about spent convictions unless the role is exempt.

 

How should employers handle sensitive data about criminal convictions?

Information about criminal convictions is considered sensitive personal data under UK GDPR. Employers must handle it securely, ensure confidentiality, and process it lawfully.

 

What should an employer consider before dismissal?

Employers should consider the relevance of the offence to the employee’s role, any reputational risks, mitigating circumstances, and the impact on the wider workforce.

 

Can an employee be suspended during the investigation?

Suspension may be appropriate while the employer investigates. However, suspension should be on full pay and used as a neutral measure, not a presumption of guilt.

 

Can an employee be terminated immediately?

Employment can be terminated without notice or pay in lieu of notice for gross misconduct, but this does not mean dismissal can be instant. There should first be a full and fair investigation before making a decision to dismiss.

 

On what grounds can an employee be dismissed?

 

An employee can be lawfully dismissed on grounds of either conduct or capability, by reason of redundancy, any statutory restriction that prevents the employment from continuing or for some other substantial reason that justifies dismissal.

 

Glossary

 

Term	Definition
Criminal Conviction	A formal declaration by a court that someone is guilty of a criminal offence.
Unfair Dismissal	A legal claim made by an employee if they believe they were dismissed without a fair reason or process.
Disciplinary Process	The formal steps an employer must follow to address alleged misconduct or performance issues before deciding on dismissal.
Mitigating Factors	Circumstances that may lessen the severity of the offence or its impact on employment, such as personal challenges or remorse.
Rehabilitation of Offenders Act 1974	UK legislation that allows some convictions to become “spent,” meaning they do not need to be disclosed after a certain period.
Spent Conviction	A conviction that no longer needs to be disclosed after a specified rehabilitation period under the Rehabilitation of Offenders Act.
Gross Misconduct	Serious misconduct by an employee that justifies immediate dismissal without notice.
UK GDPR	The UK General Data Protection Regulation, which governs how personal data, including criminal conviction data, must be processed.
Suspension	A temporary measure where an employee is removed from their duties, often on full pay, while an investigation takes place.
Contractual Obligations	Duties and responsibilities outlined in an employee’s contract, which may be impacted by a conviction.
Employment Tribunal	A legal body that resolves disputes between employers and employees, including claims of unfair dismissal.
Summary Dismissal	Immediate termination of employment without notice, usually due to gross misconduct.
Trust and Confidence	An implied term in employment contracts requiring both employer and employee to act in good faith towards one another.