Employee dishonesty – has it been sanctioned by the Court of Appeal?

The Court of Appeal decision in Cavenagh v William Evans [2012] EWCA Civ 697 to come down on the side of the former company director who was made redundant after deliberately taking money from his employer, to which he knew he was not entitled, has set a precedent that could alter the relationship between employer and employee, writes Dennis Cooper of Zaiwalla & Co. The Court ordered the company to pay contractual compensation to the employee for having to leave without serving his notice.

Dennis Cooper (+44 (0)207 312 1000, dcooper@ zaiwalla.co.uk) is a legal consultant at Zaiwalla & Co.

The decision is significant as it means that if an employer terminates a contract of employment for a reason other than misconduct, it will still have to compensate the employee even if it is later discovered that he or she committed gross misconduct during their employment.