Can an employer make a troublesome employee disa-Peer when conduct out of work may warrant dismissal?

Written on 30 Jul 2015

With the saga of Lord Sewel’s rather public fall from grace coming to an end with his resignation this week, can an employee’s conduct outside of work warrant their dismissal?

In short, yes. The conduct of the employee must pertain to the employment relationship but in practice this is a broad requirement. As long as the conduct in issue affects the employee, or could be thought to affect the employee, when they are doing their work, it does not matter that the conduct does not take place at work, during the course of work or even be connected with work.

Where an employee has less than two years’ service an employer will in many cases be in a stronger position legally, as the employee will not benefit from the statutory right not to be unfairly dismissed. However, care must be taken when dealing with such misconduct allegations in all cases, whatever the employee’s service as there are exceptions to this two year service requirement. Further, an employer’s lack of care in dealing with such allegations may leave it vulnerable to claims that it has breached the implied term of trust and confidence and wrongful dismissal, as well as impacting on employee relations and creating reputational issues. Employers should also remain vigilant to any discrimination issues for which there is no qualifying service requirement to bring a claim.

So what types of conduct outside work may ultimately warrant dismissal?

Criminal Conduct

In situations where an employee has been arrested and accused of criminal conduct, an employer may be forgiven for assuming that this is a situation which would automatically warrant dismissal. This is not necessarily the case. 

An employer must still follow a fair procedure, including a proper investigation into the employee’s conduct. This will involve questioning the employee (or possibly their solicitor) and allowing the employee to respond to the allegations. The investigation should focus on how the alleged misconduct affects the employee’s employment. Not on whether the criminal allegations are true.

Where the disciplinary process concludes that dismissal is potentially an appropriate sanction, the reason will inevitably be the breakdown of the relationship of trust and confidence due to the nature of the allegations (e.g dishonest, violent or sexual in nature) and/or the negative publicity surrounding the employee’s arrest. If the employer is alleging reputational damage, they should take into consideration the seniority of the employee, their position within the business and their level of client contact. An employer must also be prepared to provide evidence of such damage – press coverage should be collated and any comments from clients or customers retained.

Consideration should also be given as to whether there is a link between the alleged offence and the employee’s job, for example a security guard who has been accused of theft.  This will make the dismissal more likely to be fair.

Regard should also be had to whether other employees express any concern about working with the employee if he or she were to come back. Any concerns should be put to the employee as part of the disciplinary process thereby giving him or her an opportunity to respond.

Employees who hold positions of trust involving children or vulnerable adults will often justify a more stringent approach being taken by the employer to criminal conduct outside work.  

Ultimately any dismissal must be fair in all the circumstances and an employer must be aware that reacting to allegations by automatically dismissing an employee, even on the basis of the most extreme allegations, may be unfair.

Non-criminal reputational damage

Conduct outside of the workplace which is not necessarily criminal but nonetheless causes a company material reputational damage may still justify terminating an employee’s employment. Unsurprisingly, many of the recent cases in this area relate to comments made on social media or via personal email. Clearly comments made via work email or on official company social media sites which damage the company’s reputation will warrant disciplinary action up to and including dismissal. However dismissals in connection with comments made on personal social media sites and email may also in certain circumstances be fair.

In Gosden v Lifeline Project Ltd an employee was found to have been fairly dismissed after sending an offensive email from his private email to the private email of an employee at the place of work where he was seconded. The email was sent outside working hours from his home computer. This email was then forwarded to another individual within the client and was brought to the attention of Mr Gosden’s employer. In this case the tribunal was prepared to find that it was reasonable for Lifeline to consider that forwarding the email to an employee of one of its biggest clients was something which might damage its reputation or integrity and hence warrant dismissal.

In Preece v JD Wetherspoon plc a manager was similarly found to have been fairly dismissed for comments she made about one of her customers on her private Facebook page that were considered to be rude and abusive. Whilst the employee argued that the comments could only be viewed by her close friends the tribunal concluded that this could not have been the case as someone outside of that group had clearly read the message and complained to her employer.

A fair procedure including a proper investigation must always be undertaken but these cases do provide a warning shot for employees and some comfort for employers faced with dealing with an employee who it considers has damaged the company’s reputation as a result of their conduct out of work.

What should employers do to prepare for this situation?

It is important for the company’s employment contracts to include well drafted summary termination provisions encompassing any acts by the employee which an employer believes will bring it into disrepute.

These provisions should be backed up with a policy dealing in more detail with situations in which an employee’s conduct may bring the company into disrepute and the potential sanctions for those actions. An employer should also have a robust social media policy warning of the potential for an employee’s actions to cause reputational damage and the consequences of this.

If you wish to discuss these issues further, please do not hesitate to contact your usual Osborne Clarke contact.