I own a small business and recently dismissed one of my employees for theft. I am now being sued for unjustified dismissal on the grounds that, amongst other things, I did not conduct a "fair and reasonable inquiry" into the matter.

The Police interviewed the employee concerned. Although the employee denied the allegation, the Police told me that they believed there was sufficient evidence to convict her.

I dismissed the employee on the basis of that advice. The employee has pleaded not guilty to the charge of theft and is awaiting trial. Does the employee have a case against me or is she just trying it on?

An employer is required to conduct its own investigation and cannot rely on an investigation conducted by a third party such as the Police. However, the employer is entitled, as part of its investigation, to take account of evidence which a third party such as the Police has uncovered.

But, that evidence must be put to the employee for his or her comment. Therefore, your employee does have a case against you.

That is not the end of the matter. Your employee must still prove that she suffered loss or damage as a result of your failure to conduct a fair and reasonable inquiry.

If the District Court finds her guilty of theft or you are able to prove to the Tribunal that she stole your property, then the only loss or damage she can prove is emotional distress arising from your failure to treat her fairly.

Any compensation awarded for this is likely to be minimal. You would not be liable to pay her any lost wages.