Some Other Substantial Reason The Fifth Reason for dismissal. 20 October Janine Lane Chair

Transcription

1 Some Other Substantial Reason The Fifth Reason for dismissal 20 October 2014 Janine Lane Chair

2 Welcome Autumn Series Data Protection Some other Substantial reason Mourant Ozanne Business Cases that Convince Partnership with CIMA/BPP

3 Some Other Substantial Reason Is it truly the 'catch all' fair reason? Jessica Roland and Rachel Guthrie 20 October 2014

4 Agenda The law: Stage 1: fair reason Stage 2: reasonable actions Case studies Examples Case studies Slide 4

5 Stage 1: Fair reason The Employment Protection (Guernsey) Law, 1998 provides for a two stage test First Stage: the principal reason is a fair reason ie 1. Capability or qualifications 2. Conduct 3. Redundancy 4. Contravention of legal restriction 5. Some other substantial reason (SOSR) of a kind such as to justify the dismissal of an employee holding the position which that employee held. Slide 5

6 Principal reason Ensure that another reason is not the principal reason Employer must show a SOSR which could justify the dismissal of an employee If it is difficult to tell which is the principal reason, possible to plead SOSR in the alternative Slide 6

7 Stage 2: reasonable actions the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case Slide 7

8 Fair procedure Employer must show they have followed a fair procedure Individual meetings key The UK case of Jefferson (Commercial) LLP v Westgate found a dismissal for SOSR due to breakdown of mutual trust and confidence fair despite the absence of further meetings but this would be a risky approach Slide 8

9 Case studies to consider with your colleagues Do you think that the following are likely to be fair dismissals under SOSR? dismissal of a part time worker following a restructure which made certain jobs full time only dismissal of a daughter where her father who previously worked for the same employer left to join a competitor dismissal of an employee at the insistence of an employer s sole customer dismissal of an employee on the basis of information from the police regarding criminal allegations We will return to these questions at the end of the presentation Slide 9

10 Example: business re-organisation Not a redundancy within s34(3) of the Law ie business has not ceased or diminished but has been re-organised into different roles Slide 10

11 Example: refusal to accept new terms Employer must show sound business reason for the change Employer must show the reasonableness of its actions: Motives Alternatives Genuine individual consultation Attempted voluntary agreement Informed of implications of failure to agree Others accepted Trade unions Slide 11

12 Example: protection from competition Not misconduct Potential conflict of interest real commercial risk. Eg potentially in circumstances where an employer employs a husband and wife and one then leaves to join a competitor Refusal to sign up to restrictive covenants Slide 12

13 Example: personality clashes Causing substantial disruption to the business Having taken reasonable steps to resolve eg redeployment, mediation etc Not merely a difficult personality but the way it manifests itself in behaviour with employees/clients Slide 13

14 Example: pressure from third parties Pressure from a customer/supplier depending upon how important the continued business of the third party is to the employer and how serious the threat is by the third party Consider steps to alleviate injustice to the employee Slide 14

15 Example: reputational risk Employer must show that the circumstances had genuinely led to its customers losing confidence An employer is entitled to treat police information as reliable but also has a duty not to accept it uncritically Slide 15

16 Example: expiry of a fixed term contract of over a year Will not arise if waiver in place If no waiver, generally dismissal would be for one of the other fair reasons eg redundancy But it may be an SOSR if the contract was for a genuine specific purpose eg sickness cover Specific provision in the law for maternity cover (section 10) Slide 16

17 Example: breakdown in trust and confidence? Belongs to law of constructive dismissal. Not generally sufficient for dismissal, employers should look for real reason eg: Personality clash Reputational risk Misconduct etc Slide 17

18 Case studies to re-consider with your colleagues Have you changed your view regarding any of the case studies? dismissal of a part time worker following a restructure which made certain jobs full time only dismissal of a daughter where her father who previously worked for the same employer left to join a competitor dismissal of an employee at the insistence of an employer s sole customer dismissal of an employee on the basis of information from the police regarding criminal allegations Slide 18

19 Case studies Dismissal of a part time worker following a restructure which made certain jobs full time only Banerjee v City and East London Area Health Authority [1979] IRLR 147 The employer produced no evidence at all as to why there was any benefit in making the job full-time and failed to demonstrate any advantages created by such change. The EAT found that in that case there could be no finding of SOSR and the dismissal was unfair at the first stage. Also indirect sex discrimination Slide 19

20 Case studies Dismissal of a daughter where her father who previously worked for the same employer left to join a competitor Weal v Insulpak ET/116/63 The tribunal held that a father-daughter relationship was very different to that, for example, of a husband and wife (that is, it was unlikely that a father and daughter would be discussing confidential matters). It also found that the daughter did not have access to commercially sensitive information in any event, so the risk was minimal Slide 20

21 Case studies Dismissal of an employee at the insistence of an employer s sole customer Edwards v Curtis t/a Arkive Computing UKEAT/845/95 The employer's sole customer insisted that an employee be dismissed because of the standard of his work. The tribunal rejected the employee's assertion that he had been dismissed for lack of capability and held that the dismissal resulted from the customer's insistence and was therefore fair. The EAT upheld the tribunal's decision. Slide 21

22 Case study Dismissal of an employee on the basis of information from the police regarding criminal allegations In Leach v The Office of Communications (OFCOM) [2012] EWCA Civ 959; [2012] IRLR 839 (CA), the EAT considered it was reasonable to dismiss an employee on the basis of unproven allegations of child abuse. However, in A v Z UKEAT/0380/13 it was not considered reasonable. A distinguishing factor in this case, was that the police had decided, before the dismissal took place, there was no credible evidence on which to base a prosecution, whereas in Leach the police considered the employee posed an ongoing risk. Slide 22

23 Questions? Slide 23

24 Contact details: Jessica Roland Rachel Guthrie T Mourant Ozannes is one of the world's leading offshore law firms. We advise on the laws of the Cayman Islands, Guernsey and Jersey.

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