UK: Unfair Dismissal: EAT Considers Whether It Be Fair To Dismiss To Avoid Reputational Risk

It was fair to dismiss an employee to avoid reputational damage when he had been charged with a serious criminal offence even though the charges did not relate to his job and he was subsequently acquitted.

THE FACTS

Mr Lafferty was employed as a hospital theatre porter by Nuffield Health, a registered charity which provides private sector healthcare services. He was arrested and charged with assault to injury with intention to rape, and released on bail. He told Nuffield about the arrest, and was suspended on full pay pending investigation. He provided the investigator with a copy of the bail report and the police report and he explained his version of events, and told her that he denied the charges against him. The investigator recommended that a further meeting be held with Mr Lafferty to discuss his ongoing employment because the charge against him might damage Nuffield's reputation.

At this meeting, Mr Lamb, a manager, made it clear that no judgement was being made about Mr Lafferty's guilt. His questions focussed on the potential reputational damage to Nuffield. Given the nature of the charges, Mr Lamb did not think it would be appropriate to allow Mr Lafferty to work until after the trial had taken place. He considered that, if Mr Lafferty were found guilty of the charges against him, Nuffield would suffer reputational damage. This was particularly in the context of reputational damage recently been suffered by other charities because of inappropriate behaviour and a recent reminder by the Charity Commission that charities should be concerned about reputational risk.

Mr Lamb considered that there were only two options: dismissal or suspension on full pay. There was no trial date, and Mr Lamb did not think that an open-ended period of suspension on full pay would be a proper use of charitable funds. He decided to dismiss Mr Lafferty on notice because of the potential reputational risk. He took Mr Lafferty's unblemished twenty year record into account, but decided that the risk to Nuffield's reputation outweighed this.

Mr Lafferty's internal appeal was unsuccessful. At the time of his appeal, there was still no trial date. The senior manager hearing the appeal considered that the potential for reputational damage was considerable if Mr Lafferty were to be found guilty, particularly as he worked in an area with vulnerable patients who were sleeping. He also considered the risk in the context of the fact that Nuffield is a charity. The manager told Mr Lafferty that, were he to be acquitted, he would be reinstated on the same terms and conditions with his continuity of employment preserved. He would not however receive pay for the period during which he had been employed. This was what eventually happened.

In the meantime Mr Lafferty claimed that he had been unfairly dismissed. The employment tribunal held that Nuffield had shown that the reason for the dismissal was its concern that, if Mr Lafferty were to be convicted of the charges against him, there was genuine risk of damage to its reputation. This was a dismissal for "some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held", or a "SOSR" dismissal. Nuffield's concerns had not been frivolous or trivial but were sincerely held. Nuffield had sought clarification from Mr Lafferty and had reasonably considered the option of paid suspension as an alternative to dismissal. The employment tribunal held, therefore, that the dismissal was fair. Mr Lafferty's appeal to the EAT was unsuccessful.

WHAT DOES THIS MEAN FOR EMPLOYERS?

This judgment does not create any new legal principles, but is a useful consideration of factors to be taken into account in dismissals to avoid reputational damage.

It will not, by any means, always be reasonable to dismiss employees accused of criminal acts to avoid reputational damage. Employers should guard against knee jerk reactions and consider carefully whether there is a genuine risk to the employer's reputation, and balance this against the impact on the employee in light of their employment record. As was done in this case when thinking about alternatives to dismissal, employers also need to consider whether suspension pending a trial is a viable option.

Lafferty v Nuffield Health [2019] UKEATS/0006/19/SS

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