Dismissed for fraudulent overtime claims: employer's investigation was reasonable
A taxi insurance renewals specialist with 12 years' service was fairly dismissed after his employer found he had fraudulently claimed overtime. The tribunal upheld the dismissal but awarded £1,032 for unpaid holiday pay.
1 min read · Last updated 18 May 2026
Case details
- #fraudulent-misrepresentation
- #overtime-claims
- #small-employer
- #acas-code
- #holiday-pay
- #ex-gratia-payments
Key facts
- Mr Lorrio was dismissed for gross misconduct after the respondent found he had fraudulently misrepresented overtime claims over many years.
- The respondent's investigation used computer login/logout data and telephone logs to show discrepancies between claimed overtime and actual work.
- Mr Lorrio refused to accept a new contract restricting overtime and continued to work overtime under protest.
- The tribunal found the dismissal was fair and the respondent had a genuine belief in Mr Lorrio's guilt after a reasonable investigation.
- The claim for holiday pay succeeded and the respondent was ordered to pay £1,032 for 8 days of accrued but untaken holiday.
- The respondent's counter-claim for set-off of ex gratia payments against holiday pay was rejected.
Timeline
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Employment started
Mr Lorrio started working for the respondent, initially focusing on taxi insurance renewals.
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Overtime allowed
Mr Lorrio was permitted to work overtime on a discretionary basis at £30 per hour.
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New contract offered
The respondent offered a new contract reducing overtime rate to £16.50 per hour and restricting overtime to one hour per day. Mr Lorrio refused to sign.
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First lockdown
Working hours reduced to 10am-2.30pm due to pandemic. Mr Lorrio continued to be paid for 35 hours per week.
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Overtime concerns raised
Mr Jon Bird raised concerns about the level of overtime. Mr Bird told Mr Lorrio not to work overtime.
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Second new contract offered
A new contract proposed removal of overtime in exchange for a bonus scheme and three-month top-up payments. Mr Lorrio refused to sign.
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Overtime claimed while absent
Mr Bird video-recorded Mr Lorrio's absence from the office on 21 and 22 October 2020, despite overtime claims.
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Investigation letter sent
Mr Bird sent Mr Lorrio a letter advising of a disciplinary investigation into fraudulent overtime and failure to generate new business.
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Fit note provided
Mr Lorrio emailed a fit note stating depression, requesting postponement of the disciplinary hearing.
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Dismissal
Mr Lorrio was summarily dismissed for gross misconduct: fraudulent misrepresentation of overtime, failure to follow instructions, and dishonesty.
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Tribunal hearing
The substantive hearing took place over four days, with judgment reserved.
The legal issue
The tribunal had to decide whether the dismissal for fraudulent misrepresentation of overtime was fair, and whether the employee was owed holiday pay under the Working Time Regulations.
The outcome
The tribunal decided that the unfair dismissal claim failed because the employer acted reasonably in investigating and dismissing for gross misconduct. However, the claim for holiday pay succeeded.
- The employer was ordered to pay £1,032 for 8 days of accrued but untaken holiday pay.
- The employer's counter-claim to set off ex gratia payments against holiday pay was rejected.
Lessons & takeaways
- Employers should ensure investigations are thorough and based on reasonable evidence, such as computer logs and witness statements, before dismissing for misconduct.
- Employees who refuse to accept changes to contract terms may still be bound by reasonable instructions, and working overtime under protest does not protect against disciplinary action.
- Holiday pay claims can succeed even if the main unfair dismissal claim fails, especially where the employer has not kept proper records or paid accrued leave.
- Ex gratia payments made during employment cannot automatically be set off against statutory holiday pay without clear agreement.
What this case shows in practice
A long-serving employee was dismissed after his employer discovered he had been claiming overtime for hours he had not worked. The employer used computer login/logout data and telephone logs to show discrepancies, and even video-recorded the employee leaving the office early while still claiming overtime. The tribunal found that the employer had a genuine belief in the employee's guilt after a reasonable investigation, making the dismissal fair.
What the losing side could have done differently
The employee argued that the overtime was a contractual right and that he had worked under protest after the employer tried to restrict it. However, the tribunal noted that the employer's instructions were reasonable, and the employee's continued claims for unworked hours amounted to dishonesty. The employee might have avoided dismissal by complying with the new overtime restrictions or raising a formal grievance rather than continuing to claim disputed hours.
Why the result matters for similar claims
This case highlights that even long-serving employees can be fairly dismissed for misconduct if the employer carries out a proper investigation. It also shows that holiday pay claims are separate from unfair dismissal and can succeed even where the dismissal is fair. Employers should ensure they keep accurate records of holiday entitlement and pay, as failure to do so can lead to awards for unpaid leave.
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