Isle of Man: Disciplinary And Dismissals – Money For Old Hat?

Last Updated: 31 May 2018
Article by Leanne McKeown

Employee misconduct happens. When this occurs, in maintaining standards, employers have to take internal action. In more serious cases, the appropriate sanction may be the dismissal of the employee. Indeed, "misconduct" is a potentially fair reason for dismissal under the Employment Act 2006.

It is important to note however that in the event the dismissal is later legally challenged by the employee it is the employer who must show that misconduct was, in fact, the reason for dismissal.

According to the UK Employment Appeals Tribunal in British Home Stores Ltd v Burchell 1980 ICR 303, EAT (an oft-cited case before the Isle of Man Employment Tribunal) a three-fold test applies. The employer must show that:

  1. it believed the employee guilty of misconduct;
  2. it had in mind reasonable grounds upon which to sustain that belief, and
  3. at the stage at which that belief was formed on those grounds, it had carried out as much investigation into the matter as was reasonable in the circumstances.


1. Band of Reasonable Responses

  • Tribunals have to look at all the circumstances of the case when judging the fairness of the dismissal. They would be committing an error of law in looking only at what the employee actually did.
  • The law recognises that employers' may differ in their tolerance for certain types of misconduct. Employers are allowed to have different standards to the employer down the road.
  • Tribunals aren't allowed to ask themselves: 'would we have dismissed in all of these circumstances or only given a warning?' They are not allowed to substitute their view of what they would have done for that of the employer.
  •  A tribunal can only ask whether no employer acting reasonably would have decided to dismiss.
  • This is known as the band of reasonable responses test. Failing to carry out a fair procedure is very likely to put the dismissal outside the band of reasonable responses. 
  • Youth and inexperience may be mitigating circumstances some employers might want to take into account in deciding whether to proceed to dismissal in any given case.
  • Generally speaking it is quite a high bar for ex-employees to overcome to establish that no reasonable employer would have dismissed for the misconduct in question.

2. Consistency of Treatment

  • Inconsistency of treatment is a major reason employers lose unfair dismissal cases.
  • Consistency of treatment is important but this does not mean employers have to treat all employees identically irrespective of the circumstances.
  • But employers do need to guard against undermining the fairness of a future dismissal.
  • But fear of that should not inhibit an employer in being lenient in appropriate circumstances.
  • If someone is not dismissed for what is normally a dismissable offence, it would be vital for the employer to keep a record people could refer to in the future to explain why, despite the importance of the rule, that person was not dismissed.
  • This is to ensure that the employer does not give employees in future cases an argument that the rule was not observed generally and they have been treated unduly harshly.


As an employer, if you only read one employment-law related document in your life, make sure it is this one - the Code of Practice on Disciplinary and Grievance Procedures 2007 (the Code).  It's relatively short [at 30 pages]. It's well written. It is designed to be read by employers, employees and their representatives and to be of use in the workplace.  It applies to disciplinary/poor performance issues leading to dismissals but also action short of dismissal - it will help you develop an instinct for what to do when you can't take advice. It sets out the key features of a fair process.  Tribunals will take its contents into account in the cases they hear. 

Employees cannot bring a claim solely on the grounds that the employer failed to follow the Code – but the fairness of a misconduct/poor performance dismissal will be judged by the standards set out in it.


The recent Manx case of Robert James Costain Sutton v Creechurch Capital Limited [16/35] provides more than a few timely reminders for Island employers as to the proper conduct of disciplinary and dismissal proceedings.


Mr Sutton was employed as a portfolio manager for Creechurch Capital Limited (CCL) between 28 January 2013 and 26 February 2016. On the latter date (having earlier accepted his notice of retirement of 4 January 2016 expiring then) CCL purported to dismiss him for gross misconduct "Because you were found to have "materially breached the Company's policies and procedures".  The gross misconduct relied upon included, inter alia, failing to follow CCL's IT policy and allegations that Mr Sutton's actions had brought CCL and its officers into disrepute.

In Employment Tribunal proceedings for unfair dismissal subsequently brought by Mr Sutton, it was held that he had in fact been dismissed, not by reason of gross misconduct, but because of "protected disclosures" which he had made to the Financial Services Authority in interview on 10 December 2015, preceded by a Suspicious Transaction Report made by him to CCL's compliance officer and deputy on 29 May 2015.  As a result, the statutory cap [currently, £56,000] on Mr Sutton's recoverable damages was not applicable. 

Points of Note

The Tribunal considered on the evidence presented that the decision to dismiss on grounds of gross misconduct had been taken by CCL prior to the disciplinary hearing. The Tribunal noted that employees should be given the chance to have their say before management reaches a decision.

There was a failure by CCL to check with the Manx Industrial Relations Service much sooner to enquire as to the requisite period of notice for any disciplinary meeting to be given. Best practice requires at least 48 hours' notice be given.

The correspondence giving notice of the disciplinary meeting was short on detail of the case that Mr Sutton had to meet. No supporting documents were produced. The Tribunal considered that CCL's investigations generally were inadequate.

Mr Sutton was not informed of those persons who would be involved in the disciplinary process, such that he could consider the appropriateness of the same.


Such was the severity of the procedural failings in this case that the Tribunal issued points of guidance within its [84 page] judgment dated 30 August 2017 as to the proper procedure to be undertaken in a misconduct / disciplinary process.

"370. The Tribunal consider that issues arising during these proceedings highlighted that it is important that Companies provide clear and well-written policies and procedures, designed to give direction and clarity on the company's rules for employees i.e. what is and what is not allowed. This protects the employer from employees not doing what they should be doing, whilst protecting employees by setting the expectations and knowing the limits within which they need to operate.

371.  When introducing new procedures, employees should be trained in any relevant processes. A formal sign-off process should be in place when introducing any policies or procedures.

372.  Good training helps managers achieve positive outcomes, reducing the need for any further disciplinary action. Those responsible for using and operating the disciplinary rules and procedures, including managers at all levels, should be trained for the task.

373.  Ignoring or circumventing the procedures when dismissing an employee is likely to have a bearing on the outcome of any subsequent claim to the Tribunal.

374.  Where practicable, different people should be appointed to carry out the investigation as opposed to the disciplinary hearing..."


What therefore can you, as an employer, do to best arm yourself against a successful claim and avoid paying out needless sums of money to an aggrieved former employee?

At its simplest:

  1. You have to have a good  - or 'fair' -  reason for dismissing the employee, and
  2. You must follow certain procedural safeguards before implementing the decision to dismiss. These are designed to give the employee an opportunity to have their say before the decision is made and that includes a right to appeal against the decision.

This two-fold approach applies to most circumstances that would trigger a decision to terminate an employee's employment: employee's misconduct; redundancy; employee's lack of qualifications for the job; employee's incapability (for example, on grounds of ill-health or lack of skill); where continuing to employ the person would put the employer in breach of legislation or duty, or the catch all category, 'some other substantial reason'.

Discipline and dismissal law is here to stay – it has been forged over 40+ years and there are no active plans to dismantle it. The challenge for employers and HR professionals is to distil the core essentials – for successfully raising standards of conduct and ensuring that, if employees are dismissed for breaching those standards, the employer is well placed with a robust defence.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions