380: Can you be dismissed for failing to disclose bankruptcy?

In Pubbi v Your-Move.co.uk, the Employment Appeal Tribunal (EAT) upheld an Employment Tribunal ruling that a financial consultant was fairly dismissed when he deliberately failed to disclose his bankruptcy, despite being under no contractual obligation to do so.

This case emphasises the importance of including express contractual obligations for any issues of such fundamental importance. It also highlights the need to regularly review disciplinary rules and conduct polices to ensure they reflect the particular requirements of specific sectors.

Mr Pubbi was employed as a financial consultant by the estate agency Your Move to arrange mortgages and insurance products. Following a period of unpaid sick leave, his financial situation deteriorated to the point where he became bankrupt. Although Mr Pubbi did not disclose his bankruptcy, it was subsequently discovered by Human Resources through a Google search. Given the importance of financial soundness when working as a financial adviser, Your Move considered that this cast doubt on his honesty and integrity, and his authorisation to act as an adviser was terminated. Following disciplinary proceedings, he was summarily dismissed for gross misconduct. Mr Pubbi brought a claim for unfair dismissal, arguing that he was not subject to any contractual obligation to disclose his bankruptcy.

The Employment Tribunal rejected his claim, ruling that Your Move had been entitled to treat his failure to disclose his bankruptcy as gross misconduct. Given the nature of his role in the financial sector and the high standards of conduct expected of him by his employer, the Tribunal concluded that Your Move did not need to provide Mr Pubbi with a written procedure or a policy specifically informing him of the importance of disclosing bankruptcy. As well as having prior experience working in the financial sector, Mr Pubbi had also been informed at the start of his employment that he would be subject to financial monitoring.

The EAT has now rejected Mr Pubbi’s appeal, confirming that there was no error of law in the Tribunal’s decision. Despite the absence of an express requirement, Your Move was entitled to take the view that Mr Pubbi ought, in all the circumstances, to have appreciated that his bankruptcy needed to be disclosed. His employer had been particularly concerned that he had taken the conscious decision not to disclose it and had given him a fair opportunity to make points in mitigation.

The Tribunal noted that its decision was harsh, but the employer had been able to show that it expected particularly high standards of conduct from its financial advisers and had also been careful to follow a fair procedure.

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