Was the dismissal of an employee for falsely claiming expenses for his wife within the band of reasonable responses?

Solicitor, Lauren Ogden looks at the recent case of Fekete v Citibank N.A.

You may have seen the recent case of Fekete v Citibank N.A hitting the headlines this month after the tribunal decided it was fair to dismiss an employee who falsely claimed expenses for two meals for his wife when away on a work trip. To some this may seem like a harsh sanction, but it highlights the importance of employers making disciplinary decisions that are within the band of reasonable responses, both in relation to guilt and penalty.

Citibank v Feteke 2023

The facts to this case are relatively straightforward in that Mr Feteke returned from a business trip to Amsterdam and submitted an expenses form claiming for two sandwiches, two coffees and two pasta dishes during his trip. He believed this was covered by the Company’s expense policy of a €100 daily allowance when on business trips. However, the policy specifically stated that it did not cover travel or meals for spouses. When Mr Feteke was questioned about claiming expenses for two meals, he stated in email correspondence that he had consumed the food alone and did not disclose that his wife had accompanied him on the trip.  Mr Feteke continued to deny this when the matter was escalated but later admitted he had in fact shared the meals with his wife.

Following a disciplinary hearing Citibank decided to dismiss Mr Feteke without notice for gross misconduct. The outcome was upheld on appeal. Subsequently Mr Feteke pursued claims for unfair dismissal and wrongful dismissal.

The tribunal dismissed both of Mr Feteke’s claims. The tribunal accepted Mr Feteke’s explanation that the expense claim may have been submitted in error but decided that the decision to dismiss based on Mr Feteke’s dishonesty alone (in initially denying his wife had consumed some of the food and drinks) fell within the band of reasonable responses.

As the tribunal agreed that Mr Feteke was guilty of gross misconduct and the dismissal was fair, he was not wrongfully dismissed and so this claim also failed.

What is the band of reasonable responses?

To fairly dismiss an employee, an employer must first establish a potentially fair reason for the dismissal and then that they have followed a fair procedure. When the employer relies on the employee’s conduct as the fair reason, they need to show that it was in the band of reasonable responses to treat the misconduct as a sufficient reason to dismiss.

This essentially means that the employer’s decision is a decision that a reasonable employer, in the same business, would have also taken in those circumstances. To take the Citibank case as an example, would another reasonable employer in the banking sector have made the same decision to dismiss an employee who had fraudulently claimed expenses and lied about it? In this case, the tribunal decided that a reasonable employer would have made the same decision.

This is the test that a tribunal will use when deciding if a dismissal was fair. It does not matter whether the tribunal itself would have made a different decision or that not every employer would have dismissed in those circumstances.

It is also important to note that the ‘reasonable response’ test applies to both the decision on sanction (in this case dismissal without notice) but also the investigation and disciplinary process when considering if a fair procedure was followed.

Decision on guilt and penalty.

It is important that the disciplinary officer deals with the decision on guilt and penalty separately.

Here the issue of guilt did not need to be decided as Mr Feteke had (eventually) admitted making a false expenses claim and consequently the additional dishonesty when he initially denied doing so. The tribunal in the Citibank case placed focus on the fact he had lied about claiming the expenses for his wife when deciding the decision to dismiss was in the band of reasonable responses. Had Mr Feteke admitted to falsely claiming the expenses straight away, whilst he would still have been guilty of fraudulently claiming expenses, he would not have committed the second act of dishonesty and a reasonable employer may have found it too harsh to dismiss him for gross misconduct.

In some circumstances there may be mitigating factors which mean that a decision to dismiss, even when an employee is guilty of gross misconduct, is not within the band of reasonable responses.

What can employers learn from this case?

It is important for employers to ensure that any employees carrying out investigation and disciplinary processes understand the tests the tribunal will apply in unfair dismissal claims. It will be the decision makers who will have to give evidence to the tribunal and explain why the decision they made was reasonable. Their decision-making process should also be clearly evidenced throughout the process, in particular, in any outcome letters. We recommend that any employees who are carrying out investigations and disciplinary processes are sufficiently trained to do so. Losing an unfair dismissal claim can be costly for employers and so it is important that a fair and thorough process is followed and can be evidenced.

This case also highlights the importance of employers having detailed expenses policies which clearly set out what expenses can and cannot be claimed by employees. For example, in the Citibank case, if the policy had not specifically stated that expenses for spouses were excluded, Citibank may have found it more difficult to rely on this as a reason for dismissal, particularly when the expenses claimed were within the specified daily allowance of €100.

For more information on the training workshops our employment team can provide on dealing with disciplinaries and dismissals, please click here. Alternatively, if you have any questions about this article or the assistance the Kuits employment team can offer, please contact Lauren Ogden at Lauren.Ogden@kuits.com or on 0161 912 6150.