Misconduct by an employee is a ground frequently relied on by employers to justify dismissal. If the principal reason for a dismissal relates to serious misconduct which the employer reasonably believes has been committed by the employee, then the dismissal can be regarded as prima facie "fair". This is the practical effect of ERA 1996 s.98(2)(b).

Whether the dismissal is fair or unfair will then turn on whether the Tribunal considers that the employer acted reasonably in treating the misconduct "as a sufficient reason for dismissing the employee". There is no onus of proof on employer or employee here and the matter has to be determined by the Tribunal "in accordance with equity and the substantial merits of the case" (ERA 1996 s.98(4)(b) and see Unfair dismissal/fair or unfair? ). The correct test to apply is to consider whether dismissal fell within the range of reasonable responses open to an employer in all the circumstances and a tribunal must not substitute its own view of what would have been reasonable (see Midland Bank plc v Madden CA 2000 ICR 1283).

In coming to its decision on whether dismissal was within the range of reasonable responses open to the employer an employment tribunal is likely to pay particular regard to whether or not the employer had (and whether the employee was aware of) any formal rules, for example in a staff handbook or in a policy document, covering the particular situation. Great clarity as to what is unacceptable conduct is particularly important in relation to conduct outside business hours - as has been graphically said "one person’s unacceptable conduct is another person’s Saturday night out".

Suspicion of misconduct without full examination of the position will not justify dismissal (see the important case of British Home Stores v Burchell EAT 1980 ICR 303, EAT). However if one of a group of employees is guilty of the misconduct but the employer cannot ascertain which individual(s) was/were responsible case law shows that it can be fair to dismiss the whole group or the whole group other than any whom the employer genuinely and justifiably believes were not responsible.

Persistently poor job performance can amount to misconduct entitling the employer to dismiss an employee (see eg London Borough of Hackney v Benn CA, unreported, on 31st July 1996 and Unfair dismissal/fair or unfair? ). On the other hand, occasional, non-deliberate, negligence is unlikely to constitute misconduct entitling an employer to dismiss an employee (Abbey National plc v Kaur, EAT on 3rd August 2005).

It does not automatically follow from the fact that an employee has been guilty of misconduct, even quite serious misconduct, that it will be fair to dismiss him for purposes of unfair dismissal law. If the procedures followed by the employer in dismissing the employee are unfair then the dismissal itself will be unfair regardless of the substantial issues involved, although in such cases a tribunal might reduce the compensation payable to the employee, even possibly to zero (see generally notes at Disciplinary procedures and/or Unfair dismissal/procedural defects and/or Unfair dismissal/compensation calculation/contributory conduct by employee ).

See also Unfair dismissal/some other substantial reason (''SOSR'') for dismissal and Summary dismissal .