Smoking gun

If an employer learns of a serious allegation against an employee which, if it came to light, could put the employer in an untenable position, what action is the employer entitled to take? Can disciplinary proceedings start on the basis of the available information and, if they can, what would be the ‘fair reason’ for any resulting dismissal? In other words, if you can see the smoke, do you need to establish that there definitely is a fire? Sarah Michael examines a recent decision which sets out how an employer should proceed in these circumstances.

An employer that dismisses a qualifying employee will have unfairly dismissed them unless:

• it can show that the dismissal was for one of the six potentially fair reasons: conduct, capability, redundancy, breach of a statutory restriction, retirement or "some other substantial reason" (SOSR); and
• the tribunal finds that the employer acted reasonably in treating the potentially fair reason as a sufficient reason for dismissal.

The facts

In A v B, the Claimant (‘A’) was a career civil servant working for a public authority (‘B’), in a senior role. In November 2007, the Metropolitan Police Child Abuse Investigation Command (‘CAIC’) made a ‘limited disclosure’ to B, which set out that:

• A had been accused (though acquitted) of child abuse charges in Cambodia; and
• CAIC considered A to be a potential risk to children; and
• that this information was only ‘the tip of the iceberg’.

B was left in the unenviable position of having to make a decision to either support A, or to take him through their disciplinary procedures. A’s role did not involve any direct contact with children, although it did afford him the opportunity to travel to Cambodia, and other countries associated with ‘sex tourism’. Should the allegations against A have come to light (which was a real possibility) then B was concerned about potential serious harm to its reputation: it is an organisation in the public eye, and some of its responsibilities require it to have regard to the interests of children.

Disciplinary proceedings against A were commenced, in which B carefully considered the evidence presented to them by CAIC and representations made by A. However, taking into account B’s child protection initiatives, B made the decision to summarily dismiss A on the basis that its ‘trust and confidence’ in A had broken down.

The decision

The Employment Appeal Tribunal (‘EAT’) held that the dismissal of A was fair. The EAT had serious concerns about this case, but came to its decision because:

• B had subjected the allegations made by CAIC to reasonable scrutiny; and
• B had taken A’s explanations into account; and
• it is not reasonable to expect an employer to carry out a fresh inquiry into information provided by a responsible public authority; and
• taking into account B’s high profile public role in child safety, and A’s seniority within that organisation, the EAT acknowledged that A had a right to be “jealous of its public reputation.”

The EAT was satisfied that the way in which B had proceeded was reasonable, on the basis of the information that it had available to it at the time. Accordingly, if an employer has acted reasonably, but on the basis of false information, then an employee’s recourse should be against the provider of the false information, rather than their employer.

Finally, the EAT drew out the distinction between the reason stated for A’s dismissal (‘breakdown in trust and confidence’) and what the EAT identified as the true reason for the dismissal: B’s legitimate concern for its reputation, had the CAIC allegations come to light. The EAT held that this was a fair reason for dismissal, as a ‘SOSR’ (set out above). The EAT noted that employers should be careful to examine the real reasons for a dismissal; and not automatically rely on ‘breakdown of trust and confidence’ as an “automatic solvent of obligations”.

What does this mean for me?

The EAT has confirmed that, in some circumstances, unsubstantiated allegations may be a fair basis for a dismissal; notwithstanding that the allegations are unproven and not directly linked to an employee’s work. Furthermore, risk to reputation may amount to a potentially fair reason for dismissal, under ‘SOSR’. However, employers should note that:

• before acting on allegations, they must ensure that they are from a suitably authoritative, ‘official’, source;
• whilst an employer may not be expected to conduct a full enquiry into the allegations, they must be able to show that they have been scrutinised carefully (it was noted by the EAT that this may be difficult to do in practice); and
• the EAT has sent a warning to employers that the reason for a dismissal must be clear: ‘breakdown in trust and confidence’ should not be used as a ‘blanket’ reason for dismissal.

Sarah Michael is an employment partner at Bevan Brittan (www.bevanbrittan.com).