Introduction
Unfair dismissal remains one of the most common employment risks facing small and medium sized businesses. Many claims arise not from extreme misconduct, but from decisions made quickly, under pressure, and without sufficient regard to process or HR steps. When employers move too fast or rely too heavily on instinct, even well intentioned decisions can result in costly tribunal claims.
A recent employment tribunal decision involving Nestlé, reported by Personnel Today, offers a timely reminder. Although the employer had genuine concerns about safety and operational disruption, the tribunal still found the dismissal unfair. The decision turned on failures in process, a lack of consistency, and the weight placed on whether the employee admitted fault, rather than on clear policy breaches.
For SME owners, directors, and people managers, this case is not about excusing poor behaviour. It highlights why disciplinary action must sit firmly within clear policies, consistent standards, and fair, well documented HR processes.
What Happened in the Nestlé Case
The employee was a long serving factory worker. CCTV linked him to the disabled toilet area around the time a fire alarm was triggered, which led to the evacuation of the site and a temporary halt to production. The employer concluded that vaping in the toilet had caused the incident and treated the matter as a serious health and safety concern.
When questioned, the employee denied vaping at work. He later accepted that he used e‑cigarettes generally, but continued to deny using them in the workplace. The tribunal accepted that the employer had reasonable grounds to suspect vaping, even though there was no direct CCTV evidence showing the act itself.
The employer also treated the situation as a breakdown of trust. Decision makers placed significant emphasis on the view that the employee had not admitted wrongdoing or apologised. As a result, the employer dismissed him for gross misconduct.
From an employer perspective, health and safety risks, business disruption, and trust were all engaged. Many SME employers would reasonably expect dismissal to follow in similar circumstances.
Why the Dismissal Was Found to Be Unfair
The tribunal accepted that the employer had the right to investigate and take disciplinary action. However, it concluded that dismissal was not a reasonable response in the circumstances.
- The disciplinary rules did not clearly define vaping in toilets as gross misconduct.
- The incident was treated as a single isolated event in an otherwise long and unblemished employment record.
- The employer handled a comparable health and safety breach by another employee less severely.
- The decision focused heavily on whether the employee admitted fault or apologised, rather than on a clearly defined policy breach.
Taken together, these issues meant the dismissal fell outside the range of reasonable responses open to a reasonable employer.
The Compensation Awarded
The tribunal awarded the employee compensation of just over £22,000 for unfair dismissal. This outcome did not amount to an endorsement of the employee’s behaviour.
The tribunal found that the employee had contributed to the situation, particularly in how he handled the investigation. As a result, it reduced the compensation to reflect contributory fault.
For SME employers, this underlines an important point. An employee can do something wrong and still succeed in an unfair dismissal claim if the employer fails to follow the correct process and HR steps.
Gross Misconduct and Unfair Dismissal Risk
Many employers assume gross misconduct is obvious. In practice, policy definitions matter. Employers must clearly define what amounts to gross misconduct and apply those definitions consistently across the workforce.
Behaviour that feels serious or disruptive may still fall short if policies do not clearly support dismissal or if employers have treated similar conduct differently in the past. SMEs are particularly exposed where informal practices or historic decisions override written standards.
Consistency and a Fair Disciplinary Process
Consistency sits at the heart of fair dismissal decisions. Where similar situations result in different outcomes, employers must clearly explain the reasons and ensure those reasons align with policy and evidence.
In the Nestlé case, a comparator employee committed a health and safety breach but received a final written warning after admitting fault and apologising. The tribunal found that this inconsistency, combined with the focus on apology rather than policy, created significant risk for the employer.
Practical Steps to Reduce Unfair Dismissal Risk
- Ensure disciplinary and gross misconduct policies are clear, specific, and regularly reviewed.
- Train managers to focus on evidence, consistency, and process rather than instinct.
- Consider mitigation carefully and record how it influences decisions.
- Avoid allowing frustration, disruption, or attitude to dictate outcomes.
- Seek HR advice as soon as possible.
How We Can Help
We support SME employers with the practical management of disciplinary issues, investigations, and dismissals. Our role is to help employers make confident decisions that are fair, consistent, and defensible.
- Reviewing and updating disciplinary and misconduct policies
- Advising on investigations and disciplinary hearings
- Supporting managers with difficult judgement calls
- Helping ensure decisions align with best practice and legal expectations
Final Thoughts
The Nestlé tribunal decision shows that even where an employee has done something wrong, dismissal may still be unfair if the process and HR steps are not carried out correctly.
For SMEs, the message is not to avoid difficult decisions, but to take them with structure, clarity, and informed HR support.
Call to Action
If you are dealing with a disciplinary issue or reviewing how your business manages dismissals, we can help. Early HR advice strengthens decisions and significantly reduces tribunal risk.
Frequently Asked Questions
Can an employee be unfairly dismissed even if they did something wrong?
Yes. Tribunals assess whether the employer followed a fair process and completed the correct HR steps. Conduct alone does not determine fairness.
Does gross misconduct always justify dismissal?
No. Employers must clearly define gross misconduct in policy and apply it consistently. Dismissal must still be reasonable in the circumstances.
Why does consistency matter so much in disciplinary decisions?
Inconsistent outcomes create tribunal risk. Employers must justify why similar cases lead to different decisions.
Can employers dismiss someone for lying during an investigation?
Sometimes. However, dismissal becomes risky where honesty standards are unclear or where employers rely on lack of apology rather than policy breaches.
When should an SME involve HR?
SMEs should involve HR as soon as possible. Early HR advice helps employers structure investigations properly, apply policies consistently, and avoid procedural mistakes that are difficult to correct later.