Recent case- client insisting that employee be dismissed
Masini v Compass Group UK & Ireland Ltd ET/2701121/2014
An unfair dismissal tribunal case has confirmed that an employee can be dismissed for some other substantial reason where a client refuses to have an employee back on its site.
The employer had a contract providing catering services for a cafe in a business park. Ms Masini was the cafe’s manager. Her contract of employment stated that her “employment is subject at all times to approval from our client”.
The employer was informed by the client that it had received complaints from customers and had concerns about her performance. The client insisted that there be a change of management and that Ms Masini be removed from her post. The employer suggested that Ms Masini be given more time to improve, but the client was insistent that new management be installed in the cafe.
Ms Masini was dismissed, a decision that was upheld on appeal. She claimed unfair dismissal in the employment tribunal.
The tribunal reminded itself that this is a potentially fair reason for dismissal, under the “some other substantial reason” heading.
The tribunal said that an employer would be expected to:
- explore the third party’s view;
- if appropriate, challenge the third party’s view to see if dismissal can be avoided;
- consider redeployment to another post; and
- consider the nature and extent of the injustice to the employee arising from the third party’s decision.
In addition, the employer would be expected to follow a fair dismissal procedure.
The tribunal highlighted that the client would not discuss a contract extension until Ms Masini was removed, meaning that the employer’s position as service provider was at risk.
In dismissing Ms Masini’s unfair dismissal claim, the employment tribunal accepted that there was injustice to her, but considered that the employer had done what it could for the employee.
Unfair Dismissal Law
In Employment Law, when dismissing an employee a company has to have a valid reason for doing so. After identifying the reason a reasonable and fair procedure must be implemented.
For more guidance on see our Employee Unfair Dismissal page.
If this is not done, it may be deemed to be an unfair dismissal resulting in an employment tribunal claim which is costly and disruptive to the business.
Potentially Fair Reasons for Dismissal
The starting point is always to consider the 5 potentially fair reasons for dismissing an employee:
- Breach of a statutory restriction
- Some other substantial reason (SOSR)
Usually an employer can identify a misconduct or performance issue. Sometimes, this isn’t easy and there is something which is harder to identify which makes the working relationship impossible. It is acceptable in some circumstances to use the SOSR reason to dismiss an employee fairly.
What is some other substantial reason?
Almost any reason that does not fall within the other four potentially fair reasons for dismissal may amount to SOSR, if it is not an insignificant or frivolous reason that justifies the dismissal of an employee carrying out a particular role.
- If the business is undergoing a restructuring, but is not making any redundancies, SOSR may be relied on as a potentially fair reason for dismissal.
- Business re-organisations often include making changes to employees’ terms and conditions. Dismissing an employee for their refusal to accept the proposed changes (either within the context of a business re-organisation or not) can also amount to SOSR.
Refusal to accept changes to terms and conditions
- An employment contract can only be varied in accordance with its terms or with the parties’ agreement. If an employee refuses to accept a change to their terms and conditions and the business dismisses them for that reason, the reason may constitute SOSR.
- However, these cases are unlikely to be straightforward because an employee is contractually entitled to resist unilateral changes to their terms. In some instances, where the change amounts to a breach of contract, the employee may be able to resign and claim unfair constructive dismissal.
- For a unilateral change to amount to SOSR, the business must be able to demonstrate that the changes were not imposed arbitrarily but were for a “sound business reason”. There is no need for to prove that the re-organisation was crucial to the survival of the business. However, the business must provide evidence to demonstrate its reasons for the change and show that they were not trivial
- Where the overwhelming majority of employees accept the change, or where unions have been involved and have accepted the changes, individual employees may struggle to show that their dismissal for refusing to accept the change was unfair.
Conflicts of interest
- The business may be able to dismiss an employee for SOSR if the employee is in a situation that creates a potential conflict with the business’s interests.
- The business must be able to provide evidence demonstrating that the employee posed a risk to its interests. The business will need to show that:
- the employee had access to commercial information;
- the employee had close connections with a competitor (or an employee of a competitor); and
- there was a genuine fear that the employee may leak confidential information.
- To rely on SOSR, the business must be able to show that continuing to employ the employee would create a real commercial risk.
Personality clashes or irreconcilable differences between colleagues can amount to SOSR. However, to do so, the conflict would have to be causing substantial disruption to the business. An employment tribunal will expect a business to take reasonable steps to solve the problem without resorting to dismissal, for example, by:
- Re-deploying one of the workers.
- Changing work patterns.
- Attempting to mediate.
Pressure from third parties
- Where a third party (for example, a customer or supplier) requires an employee’s dismissal, the dismissal can be regarded as fair for SOSR as we saw with the case above.
- The business should consider the:
- importance of the third party’s business to its own business; and
- seriousness of the third party’s threat to leave.
- For example, if a major client is adamant that it will never contract with the business again unless the business dismisses an employee, this is more likely to be regarded as fair than where a minor client simply requests removal of an employee, but does not threaten cessation of business.
Breakdown in trust and confidence
Businesses sometimes maintain that they must dismiss an employee because of a breakdown in trust and confidence. In some cases, SOSR can be relied on in these circumstances as a potentially fair reason for dismissal.
For advice on unfair dismissal, fair reasons for dismissal and dismissal procedures call our expert employment law solicitors and HR advisors on 0114 3032300 or firstname.lastname@example.org.
You can also visit our business settlement agreements page for more information.