The claimant worked in a small family business but was not well-liked by all of her colleagues and was particularly disliked by one director. They had different styles of working and often clashed. It appears she had quite an abrasive manners. She was dismissed just short of two years' continuous service for what the employer described as gross misconduct. Had she been given her statutory notice of one week she would have had continuous service of 2 years and 5 days, allowing the claimant the right to complain of unfair dismissal under the GB legislation (obviously, the period of continuous service required in NI is one year). The question for the tribunal was whether the statutory notice period has to be added on to any period of continuous service or whether gross misconduct on the part of an employee entitled employers to dispense with notice altogether.

The rights of an employer and an employee to minimum notice are covered in GB by S.86 of the Employment Rights Act 1996. (The equivalent legislative reference in NI is A.118 of the Employment Rights (NI) Order 1996). It's the legislation that gives employees the rights of up to 12 weeks' notice of termination under normal circumstances and which leads (under S.97 in Gb and A.129 in NI)  to the effective date of termination (EDT) and continuous service being extended by the length of statutory notice if an employee is dismissed without notice. But there is a get-out clause for employers. Of particular importance is the last clause, "This section [Article in NI] does not affect any right of either party to a contract of employment to treat the contract as terminable without notice by reason of the conduct of the other party."

The claimant in this case did not add a breach of contract claim to her tribunal complaint; she took an unfair dismissal claim only. The EAT has expressly confirmed that, where appropriate, Section 86(6) of the ERA stops the normal statutory notice periods applying in cases of gross misconduct i.e. the contract will end immediately and, therefore, no additional extension for statutory notice should be added to the period of continuous service.

The case doesn't quite end there, however. The original employment tribunal had made no express finding that the claimant had been guilty of gross misconduct such as would entitle the Respondent to summarily terminate her contract. From reading the case, there appears to be little evidence of it but the EAT remitted the case on that point. In other words, an employer cannot get out of the rights that apply under S.86 (and which extend the EDT) by simply describing any misconduct as 'gross'. However, if the conduct of the employer were gross misconduct i.e. behaviour where the contract is "terminable without notice by reason of the conduct of the other party" the employment would end immediately and S97 would not apply. The tribunal in this case also appears to have understood the meaning of Polkey reductions and when they apply and that matter was also remitted, in the event that the claimant had not committed gross misconduct and, therefore, would have qualified for unfair dismissal rights under the S.97 extension.
http://www.bailii.org/uk/cases/UKEAT/2018/0256_17_0407.html