An employee has been charged with a criminal offence? What should the employer do next?

Introduction

It is every employer’s nightmare scenario: you discover that one of your employees has been arrested or charged with a criminal offence. Sometimes the allegation has nothing to do with their work, but at other times it is directly relevant. Either way, the question of what you can do and whether you can dismiss them is complex.

UK employment law does not treat being charged with a crime as an automatic justification for dismissal. Employees still have the right not to be unfairly dismissed, and a charge or even a conviction does not by itself make dismissal lawful. The employer must weigh up the nature of the offence, its impact on the business, and follow a fair process before reaching a decision.

In this article I explain how the law approaches three different situations: when an employee is charged but not convicted, when an employee is remanded in custody and therefore cannot work, and when an employee has been convicted and formally committed.

The legal framework

Employees with at least two years’ continuous service have the right not to be unfairly dismissed under the Employment Rights Act 1996. That means an employer cannot dismiss unless there is both a potentially fair reason and a fair process.

The Act recognises five potentially fair reasons: conduct, capability, redundancy, statutory restriction, and what is called “some other substantial reason” or SOSR. In practice, criminal allegations can fall under more than one of these categories. If the offence is directly connected to the employee’s role, conduct may be the right ground. If the employee is in custody and unavailable to work, SOSR is usually more appropriate.

But treat SOSR dismissals with massive caution. So many SOSR dismissals end up at an employment tribunal, looking at whether the decision was reasonable and fair.

Case law (Harris (Ipswich) v Harrison) makes it clear that an employer does not have to await the criminal outcome before making a decision, but employers must be cautious and even-handed and follow a fair process, which means you cannot just sack someone (summary dismissal) and you’ll need to follow a process.

When an employee is charged but not convicted

Being charged with an offence is not the same as being guilty. Employment law recognises this, and dismissing someone purely because they have been charged would normally be unfair. That said, a charge can create real difficulties for an employer, particularly if the alleged offence has a clear bearing on the employee’s suitability for the role or could damage the employer’s reputation.

Consider a teacher charged with sexual offences, or a finance officer charged with fraud. Even before any conviction, there are obvious concerns about whether they can continue safely and credibly in their role. In these situations, employers may be justified in suspending the employee on full pay while investigations and court proceedings take place. Suspension is not a sanction but a neutral act that allows time for more information to emerge and protects the workplace in the meantime.

If suspension is not practical, or if the charge itself makes the role untenable, dismissal may be possible under SOSR. For example, if an employee’s continued presence in the workplace would cause serious reputational damage or undermine trust and confidence, that can be a substantial reason for dismissal. But the employer must still consult with the employee, explore alternatives, and document why dismissal is the only viable option.

When an employee is remanded in custody

If an employee is remanded in custody, the issue is no longer about the allegations themselves but about availability for work. An employee who cannot physically attend work may leave the employer with no option but to dismiss, particularly if the remand period is lengthy.

Here, SOSR is the most relevant ground. Tribunals have generally accepted that imprisonment or remand can amount to a substantial reason for dismissal, because the employer cannot reasonably be expected to keep a job open indefinitely. What matters is whether the employer has acted reasonably in all the circumstances.

For example, if the remand period is expected to last a few days or weeks, it may be unreasonable to dismiss immediately without considering alternatives. On the other hand, if it is likely to last several months or more, dismissal is more likely to be seen as fair. The size of the business, the importance of the employee’s role, and the availability of cover will all be relevant factors.

Even here, the employer cannot simply write the employee off. They should still communicate with the employee, usually in writing to the prison, explain the situation, invite their response, and consider alternatives such as unpaid leave. Only once that consultation has taken place should dismissal be confirmed.

There is case law (Burns v Santander 2011) which decided that non-payment due to remand was not unlawful. An employee’s holiday entitlement and other benefits still accrue, though.

When an employee is convicted and committed

Once an employee has been convicted and sentenced, the situation becomes clearer. A conviction is a matter of record, and a prison sentence usually makes continued employment impossible.

If the offence is connected to the employee’s work, dismissal for misconduct is likely to be fair. For instance, a cashier convicted of theft, a care worker convicted of assault, or a solicitor convicted of fraud would all fall into this category. The conviction directly undermines the trust necessary for their role.

If the offence is unrelated to work, dismissal can still be fair under SOSR. A conviction for a serious offence may make the employee unavailable for work for a long period, or it may carry reputational risks for the employer. In some cases, legal restrictions will apply, such as being barred from working with children or disqualified from being a company director, which make dismissal unavoidable.

Even where the conviction seems to leave no choice, procedure remains essential. The employer should consult with the employee, even if only by correspondence, while they are in prison, and give them a chance to respond and appeal. Failure to follow procedure could turn an otherwise fair dismissal into an unfair one.

Settlement agreements as an alternative

In some situations, a settlement agreement can be an attractive option. This allows the parties to end the employment relationship on agreed terms, usually with the employee receiving a payment in return for waiving any potential claims. For the employer, it brings certainty that there will be no tribunal claim later. For the employee, it provides financial support at a difficult time.

The difficulty arises if the employee is already in prison. Settlement agreements are only valid if the employee has taken independent legal advice, and practical barriers such as lack of access to lawyers or restrictions on paperwork can make this very difficult. If the employee has not yet been remanded or committed, however, a settlement agreement may be the cleanest way of drawing a line under the relationship.

Conclusion

Employers faced with an employee charged with a criminal offence need to approach the situation with care. The law draws clear distinctions:

• Being charged alone does not prove misconduct, but if the offence is serious and affects the role or reputation of the business, dismissal may be justified after proper consultation.

• Being remanded in custody makes the employee unavailable, and dismissal for SOSR can be fair if the absence is long enough and the employer has acted reasonably.

• Being convicted and committed usually justifies dismissal, whether for misconduct if the offence is work-related, or SOSR if it is not.

In every case, the golden rule is process. Investigate, consult, explore alternatives, and document your reasoning. Employers who take these steps can usually defend their decision, while those who act hastily risk expensive unfair dismissal claims.