Our thoughts on the world of employment law - and beyond.

Hands tied?

In recent weeks there seems to have been a flurry of high profile departures. Examples can be seen in a wide variety of fields from sport (David Moyes) to politics (Maria Miller).  These departures have all to a greater or lesser degree been influenced by third party factors and remind me of the question: to what extent can an employer rely on external pressures to justify dismissing one of its own employees?

This issue can arise in many business contexts, particularly in outsourcing arrangements where, for some reason (be it conduct, performance or even personality clashes) a client requests the removal (and possibly dismissal) of an individual.  More often than not the client has the contractual right to determine the personnel responsible for carrying out the services.  In these circumstances an employer will often dismiss the employee (particularly if they cannot be redeployed within the organisation) at the client's behest.  Relying on third party pressure as the reason for dismissing an employee can fall within the "some other substantial reason" defence to unfair dismissal claims, but an employer still needs to act reasonably in all the circumstances.  Case law confirms that there are a number of factors which a Tribunal would consider when determining whether such a dismissal was fair. 

One of the relevant factors is the nature of the relationship between the employer and the third party.  For example, a Tribunal is more likely to find a dismissal fair if the third party's business is extremely important/critical to the employer (ie in situations where the balance of power is very much in the third party's favour and they can essentially dictate who and what is and is not acceptable to them). 

Another important factor which is often overlooked by employers is that before taking the decision to dismiss, it must also consider the injustice caused to the employee (and this should be recorded as part of the decision making process).  This point was emphasised by the Court of Appeal in Dobie v Burns International Services (UK) Ltd and highlighted that when considering such an issue, an employer should have regard to:

  • The employee's length of service.
  • The employee's performance and whether their work has been satisfactory.
  • How difficult it will be for the employee to find alternative work.

This was emphasised in the case of Greenwood v Whiteghyll Plastics Ltd which involved the dismissal of an employee after he was barred from working at a client's premises.  The Tribunal recognised that the client had the "whip hand" and that "the respondent had very little choice in the matter…other than to dismiss the claimant unless there was alternative work for him" (of which there was none).  However, the EAT held that the Tribunal had failed to consider the second hurdle namely the issue of injustice to the employee (in addition it noted that there was no evidence that this point had been considered in the employer's disciplinary notes and/or decision).

In many cases there will be an injustice to the employee and as such the employer should consider ways in which it can mitigate or avoid any such injustice including:

  • Investigating the reasons for the request.
  • Attempting to persuade the third party to change its mind.
  • Considering whether the business can be re-organised and/or the employee redeployed to another area.  In the Greenwood case the EAT gave the example of simply switching employees (for example, the client still needs the work to be done and moving another employee to this role would create a vacancy which the employee facing dismissal could possibly fill.)
  • Considering whether there are any other alternatives to the employee's dismissal.

Obviously in many cases it may well be that even if the injustice to an employee is considered it would make no difference to the decision of the employer.  It is likely however, that in a scenario involving a very long serving employee with an impeccable performance record, a Tribunal might expect an employer to go the extra mile to avoid a dismissal. The key point is that any reasonable employer needs to consider the injustice to the employee and seek ways of minimising this.

Notwithstanding consideration of all the above issues, if the decision is taken to go down the dismissal route, an employer should ensure that it follows its normal dismissal procedure (including the opportunity to appeal) to reduce the risk of an argument of unfair dismissal. 

Finally, it is important to exercise caution when acting on any request to remove/dismiss an employee, which could be tainted in some way with discrimination.  If this were the case, the employer could face an accusation that it has "knowingly helped" an act of discrimination contrary to the Equality Act 2010.  To avoid such arguments the employer should investigate the reasons why the request has been made.  In some circumstances the employer may be reluctant to "rock the boat" with an important client but the potential financial consequences could be significant.

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