An interesting case that seems to arise fairly frequently for employers!
This was the question asked by the Employment Appeal Tribunal in the case of Lafferty v Nuffield Health, which judgment was published last week.
What law applies in this kind of situation?
In order for a dismissal to be fair an employer has to first show that the reason, or principal reason, for dismissal falls within one of the five potentially fair reasons for dismissal, namely misconduct, capability, redundancy, illegality or “some other substantial reason”.
In cases involving criminal allegations outside of work that have not been proven, the reason for dismissal that tends to be relied upon by employers is either “misconduct” or, more commonly, “some other substantial reason” as this can cover reasons such as the risk of reputational damage to the employer.
If the employer can establish a potentially fair reason for dismissal, the next question is whether, in the circumstances, the employer acted reasonably in treating that reason as a sufficient reason for dismissing the employee. In assessing this “reasonableness” test, the tribunal has to consider whether the dismissal falls within the range or “band of reasonable responses” open to a reasonable employer in the circumstances of the case.
Where the employee has been charged with a criminal offence but not yet stood trial, case law makes it clear that the question is not whether the employee has suffered injustice by the dismissal but whether the employer has behaved reasonably in the circumstances taking into account:
- the nature of the employer’s organisation
- The role of the employee in it
- The nature and source of the allegations
- The efforts of the employer to obtain clarification and confirmation
- The responses of the employee
- What alternative courses of action are reasonably open to the employer
What was the case about?
Mr Lafferty had been employed for more than 20 years by Nuffield Health (“the charity”), a not-for-profit charity, as a hospital porter. His duties included transporting patients who had been anaesthetised to and from theatre.
In February 2018, he was charged with assault to injury with intention to rape and released on bail. Mr Lafferty denied the charges. After informing his employer of the situation, he was suspended on full pay pending an investigation. Following that investigation, Mr Lafferty was invited to a disciplinary hearing and subsequently dismissed due to the potential reputational damage that the charge against him may cause the charity. Although the charity recognised the potential injustice to Mr Lafferty of dismissing him in relation to a charge he had not yet stood trial for, it decided that the risk to its reputation of continuing to employ someone whose role which brought him into contact with vulnerable patients was too great, particularly given the duty of care that it owed to patients and the considerable scrutiny that it was under, as a charity.
Mr Lafferty brought a claim for unfair dismissal against the charity, arguing that it was unfair to dismiss him for a criminal charge that he had not yet been tried for and which he denied. The Employment Tribunal, however, held the dismissal was fair, concluding that the reason for the dismissal was because the charity considered there was a genuine risk of potential damage if Mr Lafferty was found guilty, that this was a potentially fair reason for dismissal falling within the “some other substantial reason” category and that the charity had acted reasonably in treating this as a sufficient reason to dismiss.
Mr Lafferty appealed to the Employment Appeal Tribunal.
What were the grounds of appeal?
Mr Lafferty claimed that the Tribunal had erred in law by failing to consider if the charity had undertaken as much investigation into the matter as was reasonable. In particular, he said the charity didn’t ask the Crown about the potential outcomes, timescales or evidence available or the risk posed by him.
He also argued that the Tribunal had not assessed all the relevant circumstances as it was required to do in order to assess whether the charity had acted reasonably, including whether there was an objective basis for considering there was a risk of reputational damage and whether the charity had considered the reasonable alternatives to dismissal.
What was the decision and why?
The Employment Appeal Tribunal rejected Mr Lafferty’s grounds of appeal and held that the original tribunal was entitled to decide that he had been fairly dismissed:
First, the Employment Appeal Tribunal said that the tribunal was entitled to conclude that the charity had established the risk of reputational damage as a potentially fair reason for dismissal for the reasons it did. These included that:
- At the time of Mr Lafferty’s dismissal, the charitable sector was under particular public scrutiny as a result of recent conduct exposed in that sector in relation to employees engaging in sexual offences.
- The nature of Mr Lafferty’s job (transporting vulnerable patients to and from theatre) was such that it would have afforded him an opportunity to commit the kind of act with which he was charged.
- If Mr Lafferty was allowed to continue working and then found guilty of the offence, the charity would be criticised or could be criticised for exposing patients to risk.
Secondly, the Employment Appeal Tribunal held that the tribunal was allowed to conclude that the charity had acted reasonably in treating this reason as a sufficient reason to dismiss and that the charity’s investigation was not inadequate. The charity did not take the fact of the allegations at face value – there was no “knee jerk” reaction. The charity took into account the fact that a decision had been made to proceed with the prosecution, but it also took steps to find out more about the charges from Mr Lafferty and also asked for the bail report and police report. The charity therefore did make reasonable attempts to go behind the facts of the charge itself.
The charity was not in a position to investigate the alleged incident itself because it was not alleged to have occurred in the workplace or the course of employment. The Employment Appel Tribunal also noted in this respect that Mr Lafferty was not dismissed because of a belief that he was guilty of the offence but because of the adverse effect the fact of a charge could have on the charity’s reputation
Thirdly, the Employment Appeal Tribunal said that the charity did consider alternatives to dismissal and acted reasonably in the circumstances in rejecting them. Continuing to employ Mr Lafferty in his role was not a reasonable option given the nature of the charges. The other alternative was to suspend him on full pay but this was not considered reasonable because of the charity’s charitable status and the unnecessary expenditure than an open-ended suspension with pay would entail. The only remaining option was dismissal and the tribunal was entitled to find that this decision did not fall outside the band of reasonable le responses open to an employer.
What are the key points to take from this case?
1. If one of your employee’s is charged with a criminal offence outside of the workplace this does not necessarily give you a reason to take disciplinary action against them.
As the Employment Appeal Tribunal decided in this case, there needs to be some relationship between the matters alleged and the potential for damage to reputation. You will need to take into account the nature of the alleged offence, the employee’s job and seniority and the type of and nature of the contact they have with others (the public/employees/clients etc).
2. If you intend to rely on the risk of reputational damage to your business to dismiss, bear in mind that the risk needs to be genuinely perceived (like in this case) and based on an objective rationale. In some cases, particularly where the charges are serious, this may not be difficult to show but you will still need to record how you reached this conclusion.
3. Avoid a “knee jerk’ reaction where you just rely on the fact of the charge itself to justify dismissal. Make sure you carry out a reasonable investigation and follow a fair procedure before taking any disciplinary action. The extent to which you will be able to investigate the allegations themselves are likely to be limited (particularly if the employee has been charged with a criminal offence) and will also depend on your resources, but you should still make some enquiry into the circumstances including asking the employee.
4. Consider alternatives to dismissal. Is there another job the employee can be offered? Is suspension on full pay until trial an option? For larger organisations such an alternative may be possible – for smaller employers perhaps less so – but you should still consider alternatives and document that you have done so.
5. If in doubt, seek legal advice before making a decision.
Case reference: Lafferty v Nuffield Health UKEATS/0006/19/SS