Managing director dismissed without investigation: unfair dismissal win after High Court ruling
A managing director who was dismissed for alleged threats and misappropriation of funds without any investigation has been awarded £53,212.50 after the tribunal found the dismissal unfair. The High Court had previously found no evidence of fraud or dishonesty.
1 min read · Last updated 19 May 2026
Case details
- #shareholder-dispute
- #acas-code-uplift
- #high-court-concurrent-litigation
- #no-investigation
- #threat-allegations
Key facts
- The Claimant was employed as Managing Director and was a 50% shareholder.
- The Respondent alleged the Claimant made threats to bomb the director's home and business, misappropriated funds, and used company money for gambling and porn sites.
- The High Court found no fraud or dishonesty by the Claimant and that he was summarily dismissed without good reason.
- The Respondent did not carry out any investigation or hold a disciplinary hearing before dismissing the Claimant.
- The Tribunal found the Claimant was unfairly dismissed and awarded compensation with a 25% ACAS uplift.
Timeline
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Employment started
Claimant began working as Managing Director for Panache Leasing Ltd.
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Share sale negotiations begin
Syed Ahmed texted Mr Hussain to transfer 50% shares to Claimant for no consideration.
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Meeting on share sale
Claimant and Syed Ahmed met; Claimant believed a deal was struck.
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Meeting with accountant
Claimant met Mr Hussain; heated discussion about share valuation and threats exchanged.
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Injunction application
Respondent applied for without notice injunction alleging theft of £106,075.96.
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Injunction granted
Roth J granted injunction excluding Claimant from business premises.
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Claimant served with injunction
Claimant left premises after being served with injunction.
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Claimant asked for wages
Claimant emailed Syed Ahmed requesting outstanding wages; no response.
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Claimant informed of dismissal
ACAS told Claimant he had been dismissed; effective date of termination.
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Claim issued
Claimant presented complaint of unfair dismissal to Employment Tribunal.
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High Court hearing
High Court heard the case over five days before Chief ICC Judge Briggs.
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High Court judgment
High Court found Claimant was wrongfully dismissed, no fraud or dishonesty.
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ET hearing day 1
Employment Tribunal heard evidence on unfair dismissal.
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ET hearing day 2
Employment Tribunal concluded hearing.
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Judgment issued
Employment Judge Jones issued judgment finding unfair dismissal and awarding £53,212.50.
The legal issue
The tribunal had to decide whether the employer had a genuine and reasonable belief in misconduct based on a reasonable investigation, and if not, what remedy was appropriate.
The outcome
The tribunal found the managing director was unfairly dismissed. The employer had failed to carry out any investigation or hold a disciplinary hearing before dismissing him. The High Court had already found no evidence of fraud or dishonesty, and the tribunal was bound by that finding.
Compensation:
- Basic award: £4,035.00
- Compensatory award: £42,570.00 (including loss of earnings and loss of statutory rights)
- 25% ACAS Code uplift: £10,642.50
- Total: £53,212.50
Lessons & takeaways
- Employers must carry out a reasonable investigation before dismissing an employee for misconduct, even in cases involving serious allegations.
- Concurrent High Court proceedings do not excuse an employer from following a fair disciplinary process; the tribunal will consider findings of a higher court.
- Failing to follow the ACAS Code of Practice can result in an uplift of up to 25% on compensatory awards.
- Shareholder disputes do not justify bypassing employment law protections; directors are still employees entitled to fair treatment.
This case shows how a serious breakdown in a business relationship can lead to a complete failure of employment process. The managing director, who was also a 50% shareholder, was accused of making bomb threats, misappropriating funds, and using company money for gambling and porn sites. But the employer never investigated these allegations or held a disciplinary hearing. Instead, they obtained a High Court injunction excluding him from the business and later told ACAS he had been dismissed.
What the employer could have done differently
The employer could have conducted a proper investigation, given the managing director a chance to respond, and held a disciplinary hearing. The High Court later found no evidence of fraud or dishonesty, and the tribunal noted that the employer's failure to follow any procedure meant the dismissal was automatically unfair. Even if they believed the allegations were serious, they still needed to follow a fair process.
Why this result matters
This case is a reminder that even in heated shareholder disputes, employment law protections still apply. The tribunal awarded a 25% uplift because the employer failed to follow the ACAS Code of Practice. The total compensation of £53,212.50 reflects the loss of earnings from the date of dismissal to the hearing, with no reduction for contributory fault or Polkey (the chance that a fair process would still have led to dismissal). The High Court's finding that the managing director was wrongfully dismissed also influenced the tribunal's decision.
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