When an employee is under regulatory or criminal investigation, how should their employer handle an internal disciplinary?

23 April 2019

Employers in such scenarios may face questions as to whether the employee can be suspended without pay or whether the internal investigation can be progressed pending the outcome of any regulatory or criminal investigationA recent Court of Appeal case of North West Anglia NHS Foundation Trust v Gregg provides welcome guidance to employers on how to deal with such circumstances.

The case involved an NHS employee who was suspended from carrying out his duties by his employer. He then appeared before an Interim Orders Tribunal (IOT) of the Medical Practitioners Tribunal Service (MPTS), which suspended his medical registration. In the background to both these matters was an on-going police investigation. NHS clinical employees have their contracts covered by the Department of Health’s framework document “Maintaining High Professional Standards in the Modern NHS” (MHPS) which sets out how NHS Trusts are required to conduct disciplinary processes. However, many of the issues apply more generally to employees in other sectors. For example, employees in financial services often have their employment controlled by the FCA as well as their employer.

You can view the key employment and regulatory takeaways here.

In the case of North West Anglia NHS Foundation Trust v Gregg, the Claimant was employed as a consultant in anaesthetics by North West Anglia NHS Foundation Trust. The Trust had concerns over the circumstances of two patients’ deaths under the Claimant’s care and commenced an investigation process while also excluding the Claimant from duty on full pay. At the same time, the Claimant was facing regulatory and police enquiries into the patients’ deaths. The Interim Orders Tribunal of the Medical Practitioners Tribunal Service imposed an interim suspension order on the Claimant, which meant his registration was suspended and his licence was withdrawn for 18 months. Given this fact, the Trust lifted the Claimant’s exclusion, but suspended his pay.

The Claimant successfully obtained an injunction from the High Court preventing the Trust from continuing its investigation until after the police had completed their investigation and a decision had been taken by the CPS as to whether or not to charge him. The High Court had also found that the Trust was in breach of contract for not paying the Claimant’s salary while he was on interim suspension. The Trust appealed the decision to the Court of Appeal.

Was the Claimant entitled to be paid during the period of his interim suspension?

The Court upheld the High Court’s decision that the Trust were not entitled to withhold the Claimant’s pay during the period of his interim suspension.

The Court held that there was nothing in the Claimant’s contract, express or implied, which permitted the deduction of pay in these circumstances. The Court remarked that given that this form of suspension is now a feature of the professional life of a medical practitioner, if it was intended that salary would not be paid on the imposition of such a suspension, the contract would have said so. There was also no evidence of any custom and practice in this respect.

The Court also looked at the common law doctrine of ‘ready, willing and able’ to work, whereby if an employee does not work, they have to show that they are ready, willing and able to perform that work if they wish to avoid a deduction to their pay. The Court held that the Claimant was ready, able and willing to work, but it was the suspension of the Claimant’s registration and withdrawal of his licence which prevented him from working. In other words, it was the decision of a third-party tribunal which had against the Claimant’s will removed his registration and licence. The Court held that the imposition of such a suspension, which is not voluntary, does not justify the deduction of the doctor’s pay for the period of the interim suspension.

The Court held that in a situation where the contract was silent on the issue of pay deduction during suspension, the default position should be that a suspension should not attract the deduction of pay. Only exceptional circumstances, such as a complete or part admission of guilt, might justify such a deduction.


Was the Trust entitled to progress their own internal disciplinary proceedings without waiting for the completion of the police investigation?

The High Court had held that the Trust failed to engage with the Claimant’s concerns about participating in the disciplinary processes or the fact that his legal advisers had advised him not to participate, pending a decision by the CPS.

The Court found that an employer does not usually need to wait for the conclusion of any criminal proceedings before dismissing an employee or commencing or continuing internal disciplinary proceedings. The court will usually only intervene if the employee can show that the continuation of the disciplinary proceedings will give rise to a real danger (and not merely a notional danger) that there would be a miscarriage of justice in the criminal proceedings if the court did not intervene.

The Court of Appeal held that the facts of this case did not justify the court’s interference with the Trust’s management of its own employees and that the decision to prevent the ongoing disciplinary process and postpone it awaiting the outcome of the police investigation amounted to micro-management by the court.

The Court concluded there was no breach of the implied term of trust and confidence. The Court held that the Trust’s conduct, in wanting to progress its own internal disciplinary investigation without waiting for the conclusion of the separate police investigation, was not calculated to destroy or seriously damage its relationship with the Claimant and there was a reasonable and proper cause for the Trust’s conduct in wishing to progress its own internal disciplinary process in accordance with their contract with the Claimant. There was also no evidence that the internal disciplinary process would have any effect on the criminal investigation, let alone give rise to a real danger of a miscarriage of justice.

The Court made the point that the Trust, and those who fund it or use its services, shouldn’t have to wait for a separate organisation to conclude its investigation, which could take months or years. There was no rational basis in this case for tying the contractual, internal investigation to the conclusion of the ongoing police investigation.

Key takeaways for employers:

  1. Where an employee is suspended they should remain on full pay for the period of the suspension, unless the contract of employment expressly provides for deduction of pay in such circumstances or exceptional circumstances arise, such as the employee admitting to being guilty of misconduct.
  2. An employer is entitled to progress their own internal disciplinary proceedings and/or dismiss an employee without waiting for the conclusion of any criminal proceedings.

Key takeaways for regulated professionals:

  1. Parallel investigations such as that which occurred in the present case are quite prevalent. Seeking to argue that one investigation should be halted in favour of another can be difficult. As such, engagement with more than one organisation or regulatory body is often required.
  2. Individual employees should seek early advice as to their obligations to engage and how to protect their position in each distinct investigation.

A revised version of this blog was published in People Management on 30 April 2019.

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