Suspension of Employees during Disciplinary Proceedings – Approach with Caution!

April 2, 2012

We have seen an increasing trend for employers suspending employees during disciplinary proceedings almost as a matter of course. However, this is a risky approach which can trigger a number of claims, and so it is an area to be approached with caution.

Potential claims

1. In Gogay v Hertfordshire County Council (2000) an employee was awarded damages for a psychiatric illness suffered as a result of a suspension for misconduct for which there was no prima facie evidence. Personal injury suffered by an employee as a result of their unfair treatment can result in a substantial award of damages.

2. The Supreme Court recently confirmed in Edwards v Chesterfield Royal Hospital NHS Foundation Trust (2011) that in normal cases where an employer has followed the wrong disciplinary process, the employee cannot claim uncapped damages for breach of contract. The only remedy will be an unfair dismissal claim which is subject to the statutory cap (provided that there are no discrimination or whistleblowing issues). However, the Supreme Court also confirmed previous case law which held that suspension is an exception to the general rule: suspending an employee can give rise to a separate claim, independently of any (capped) unfair dismissal claim.

3. In Eastwood v Magnox Electric plc (2005) the House of Lords confirmed that financial losses flowing from suspension, where an employer as acted unfairly in suspending an employee can be claimed separately from any claim for unfair dismissal. Financial losses could for example arise from damage to the reputation of an employee who was unfairly suspended after having been accused of serious misconduct.

4. Where an employee is suspended without reasonable grounds, this can amount to a breach of the implied term of trust and confidence between the employer and the employee. The employee can resign and treat him/ herself as dismissed and claim constructive unfair dismissal on this basis.

When is suspension appropriate?

Employers should consider suspending an employee only when:

• there is a potential threat to the business or other employees;

• it is impossible to properly investigate the allegation if an employee remains at work (for example because they may destroy evidence or attempt to influence witnesses); or

• relationships at work have broken down to such an extent that suspension is required,


• the employer has conducted a preliminary investigation to establish that there is prima facie evidence of the alleged misconduct; and

• it is not possible to place the employee in another area of the business whilst the investigation is carried out.

In all other cases, suspensions should be avoided where possible. Suspension should not be used as a disciplinary sanction prior to a formal disciplinary process.

How should the suspension be handled?

• the period of suspension should be as short as is possible and the suspension decision should be kept under regular review;

• the disciplinary investigation/ procedure should be concluded as soon as possible to avoid unnecessarily lengthening the period of suspension;

• the employee should normally continue to be paid and receive their normal benefits. Suspension without pay, even where there is a contractual right to do so, might indicate the disciplinary process is pre-determined;

• it should be made clear to the employee that the employer has not reached a foregone conclusion in relation to the allegations;

• the employee should be given clear information regarding their suspension and how long the suspension will last;

• it is helpful to give clear instructions as to the employee's rights and obligations during the period of suspension are (for example that they are not permitted to take another job, but they are not to report to work and must not contact colleagues or clients); and

• extreme caution should be exercised when communicating a suspension to other employees, as any inference of “guilt” may prejudice any future disciplinary process. It could also cause the accused employee distress and may harm that employee’s reputation. If possible, the suspension should be kept confidential.

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