Lafferty v Nuffield Health - SOSR dismissal: repetitional damage

The Employment Appeal Tribunal (EAT) has held that it was reasonable for a charity to dismiss a long-service employee with criminal charges due to the potential for reputational damage.

Under the Employment Rights Act 1996, there are five potentially fair reasons to dismiss an employee, which includes some other substantial reason (SOSR). Generally, these dismissals arise when there are fears that maintaining the employment of an individual could result in reputational damage for an organisation.

In the case of Leach v Office for Communications, the Court of Appeal evaluated the extent that an SOSR dismissal could be considered fair. Here, the claimant, who had a senior role involved in child protection, had been accused of posing a risk to children. Ultimately, it was held that whilst it was important not to accept unsubstantiated allegations from third-parties at face value, the ‘central question is what it was reasonable… in the relevant circumstances, to do’.

FACTS

In this case, the claimant had worked for a charity for over 20 years as a theatre porter, meaning he had full access to vulnerable patients. He informed the hospital in which the charity was based that he had been charged with assault and intention to rape, and had been released on bail. The charity held an investigatory meeting, where he provided copies of his bail and police report and vigorously denied the allegations.

Further meetings were held between the claimant and management, with concerns that his charge, and potential conviction, could have serious reputational impact on the charity. This was especially a concern as, at the time, an increased amount of scrutiny had been placed on the charity sector as a whole due to issues of staff abusing vulnerable persons. Although management did consider that the claimant had a long and unblemished record, they felt that the reputational risk outweighed this factor.

The claimant was told that he was to be dismissed with full notice due to SOSR, namely reputational damage. Management explained that they had considered suspending him until his trial, but ultimately decided against it as it was not known at the time when the trial would be and how long he would need to remain suspended on full pay. Such a scenario was deemed too costly for the charity, especially when charities generally face scrutiny for the use of funds raised.

He appealed against this decision and the appeal was ultimately rejected, with him being told that the potential for reputational damage was considerable and that his continuing to be employed could potentially have breached the charity’s duty of care to patients. He was also informed that, should the charges be dropped or he acquitted, he would be able to return to his previous role, with continuity preserved, but he would not be paid for the time he was considered dismissed. 

ET

He later brought a claim to the employment tribunal (ET) for unfair dismissal, who rejected his claim. The tribunal held that the charity had clearly demonstrated the reason for his dismissal was because of a risk of reputational damage, from concerns that were genuinely held. Although the claimant had denied the charge, the organisation had acted reasonably in dismissing him. This was because they had considered all evidence available to them, assessed the alternative of suspending him and were able to outline why this was not deemed possible. After the hearing, the claimant was fully acquitted at trial and returned to work.

EAT

Despite his return, the claimant appealed to the EAT. He argued that the tribunal had failed to assess if the charity had considered all the circumstances, including if there was an objectively rational basis to consider a risk of reputation damage. He also stated that the tribunal had not assessed if the investigation conducted by the charity was reasonable. For example, the charity had failed to make further enquiries to the prosecution service about timescales and the actual risk posed by him.

The EAT dismissed his appeal. Although he tried to argue that the reputational risk was conditional on his being charged and therefore could not be relied upon as reasonable grounds for dismissal, the EAT held that it was correct for the tribunal to also consider the risk if he was convicted and remained employed. His job role placed him in direct contact with vulnerable individuals and, potentially, presented opportunity for him to commit a similar crime to what he had been charged with.

The EAT also rejected his argument that the investigation conducted by the charity was inadequate. As the tribunal had rightly concluded, the charity had taken steps to find out more about the charges and considered alternatives to dismiss him. The EAT explained that it was arguably ‘self-evident’ that the claimant’s continued employment could have resulted in reputational damage, and that this conclusion was informed and had been reached by experienced managers. The charity were not in a position to investigate the criminal charges themselves and, until they had more confirmation, acted reasonably in dismissing him.

Note for employers

This case is a helpful exploration of the options open to organisations who do face a situation of potential reputational damage. As seen here, if the organisation can demonstrate they have taken steps to clearly establish a genuine concern for this type of damage, a dismissal of this nature can be considered reasonable. However, it is important not to get too complacent. As the EAT noted, it is not open for an organisation to dismiss an employee simply because they have been charged with a criminal offence. Organisations should never just assume that reputational damage will occur without investigating first, even if, in a particular situation, it does appear more obvious.

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