The fairness of a decision to dismiss for Some Other Substantial Reason
In this recent case decided by the Employment Appeal Tribunal dismissal for some other substantial reason was considered in the context where the employer alleged there had been a breakdown in trust meaning that the employee could no longer be employed.
There are 5 potentially fair reasons for dismissing an employee;
2. Capability or qualifications
5. Some other substantial reason (known as SOSR)
Some other substantial reason is designed to cover scenarios that do not fit into the other 4 reasons.
Over the year’s case law has developed and there have been numerous differing scenarios which have come under the umbrella of Some Other Substantial Reason.
Section 98(1) of the Employment Rights Act 1996 states
In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show—
(a)the reason (or, if more than one, the principal reason) for the dismissal, and
(b)that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
Ms Stockman was employed by Phoenix House Limited (the ‘Employer’) who are a charity providing support for drug and alcohol problems. Initially Ms Stockman was employed via an agency and from the 1st April 2010 she became a permanent member of staff, employed as a Financial Accountant.
On the 15th April 2013 the Employer announced that there would be a restructure of the Finance department within which Ms Stockman worked. The result of the restructure was to remove the post of Financial Accountant and the position of Management Accountant held by Ms Stockman’s colleague, Ms Savage. Three new posts were created and Ms Stockman applied for all three.
On the 30th April 2013 an incident arose between Ms Stockman and Ms Savage within which Ms Savage spoke to Ms Stockman in an angry manner. She subsequently apologised, and Ms Stockman raised a formal grievance about the conduct. Ms Stockman’s grievance was rejected on the basis that Ms Savage had already apologised.
Following interviews for a new position of Management Accountant Ms Savage was appointed to the role and on the 20th May 2013 Ms Stockman was informed that she had been unsuccessful in her application for this role. Ms Stockman was subsequently offered the position of Payroll Officer in the new structure.
On the 21st May 2013 an incident occurred between Ms Stockman and the Finance Director, Mr Lambis in which Ms Stockman put the telephone down on a call with Mr Lambis which he considered to be discourteous. Two days later Ms Stockman complained to her line manager, Ms Bertha, that Mr Lambis had treated her differently because she thought he disliked her. Ms Stockman’s colleague, Mr Mistry, was present during this conversation and Ms Stockman believed that he agreed with her opinion on Mr Lambis thoughts about her.
A conversation took place following this between Mr Lambis, Ms Bertha and Mr Mistry in Mr Lambis office. This conversation could be seen from outside of the office by Ms Stockman who then entered the office and demanded to know what the conversation was about. Mr Lambis asked Ms Stockman to leave his office.
Ms Stockman became upset and after speaking with the Chief Executive an investigation was instigated and led by the Head of HR, Ms Logan. Various discussions took place with Ms Stockman, including an offer of settlement which was considered by Ms Stockman.
No agreement was reached between the parties and Ms Stockman raised a formal grievance against Mr Lambis. The Employer also instigated disciplinary proceedings based on Ms Stockman’s behaviour.
After a period of investigation and postponements due to Ms Stockman’s illness the Employer concluded the disciplinary investigation by issuing a 12 month warning and her grievances were dismissed.
Ms Stockman appealed against the decision of the disciplinary and grievance and her appeals were not upheld.
In the meantime, Ms Stockman was cleared as fit to return to work, however the Employer expressed concern about the working relationship between Ms Stockman and Mr Lambis and suggested mediation. The Employer also agreed to obtain a report on Ms Stockman’s health and fitness for work.
Whilst these discussions were taking place about Ms Stockman’s return to work, Mr Lambis found that she had used her Company credit card to pay a fee for a professional exam resit. This was deemed to be contrary to their policy. An investigation meeting took place but no further action was taken and no conclusion reached about the issue.
On the 15th November 2013 a mediation meeting took place which was unsuccessful and on the 25th November 2013 Ms Stockman was invited to a meeting with the Director of Business Development, Ms Zacharias, to consider her working relationship with the Company.
During the meeting Ms Stockman confirmed that she could return to work and work with Mr Lambis and colleagues, stating that in her view the relationship was not beyond repair. Despite this Ms Zacharias informed Ms Stockman that in her view the relationship had broken down irretrievably and terminated her employment for some other substantial reason, namely the break down in relations.
Ms Stockman made a claim for Unfair Dismissal which was upheld by the Employment Tribunal. The Employer appealed the decision.
The Employment Appeal Tribunal considered the findings of the Employment Tribunal and agreed with their conclusion that Ms Stockman had been unfairly dismissed. The Employer had not given Ms Stockman the opportunity to respond to the issue fully and the conclusion that there had been an irretrievable breakdown in the relationship was outside of the range of reasonable responses by an employer in this situation.
The Employment Appeal Tribunal stated that a reasonable employer would and could have given Ms Stockman an opportunity to put her assertions that she could work with her colleagues to the test, at least, before taking the decision to dismiss her.
By requiring Ms Stockman to prove in the meeting with Ms Zacharias that the relationship had not broken down was unreasonable and unfair.
Points to note
If you decide to dismiss an employee as a result of a breakdown in the relationship you should:
1) fairly consider whether or not the relationship has deteriorated;
2) whether it has deteriorated to such an extent that the employee holding the position that they do cannot be reincorporated into the workforce;
3) whether they can be incorporated into the workforce without unacceptable disruption.
At the Employment Tribunal stage they had decided that the ACAS code of practice, setting out minimum requirements for investigation and meetings, had applied to a decision to dismiss for some other substantial reason. The Employment Appeal Tribunal however concluded that the ACAS code was not intended to and did not apply to the ACAS Code, and therefore there could be no increase in Ms Stockman’s compensation because of their failure to follow the Code.
Action to take
1. If you are considering dismissing an employee because of a breakdown in the relationship you should at least demonstrate that you have allowed the employee the opportunity to return to work and at least try first;
2. I recommend getting advice in advance of a decision meeting;
3. No matter how frustrating and difficult an employee may be you should make an objective decision;
4. If you would like to discuss a difficult situation with an employee, please do not hesitate to contact me.
Phoenix House Limited v Stockman – Employment Appeal Tribunal