Dismissals: some other substantial reason

Stands to reason

15 July 2015

Helen Crossland explores how dismissals for ‘some other substantial reason’ can be applied


Employers, generally, are familiar with the fact that for a dismissal to be fair, it must be for one of 5 reasons. The first 4 are conduct, performance/capability, redundancy and illegality/breach of statutory duty. But how knowledgeable are employers about the fifth possible ground? Some other substantial reason (SOSR) is an underused but equally justifiable ground for ending an employment relationship, and can apply to almost any other scenario outside the four more commonly used grounds, provided it is not for an insignificant or frivolous reason.

SOSR can, therefore, be a lawful means of resolving a conundrum where the reason for dismissal does not strictly relate to an employee’s wrongdoing, poor performance or because of a reduced requirement for their role.

However, to defend any potential claim for unfair dismissal, employers must be able to show there was a fair reason for the action, and that a correct procedure was carried out prior to parting ways with the employee.

When can it be used?

A number of situations could give consideration to dismissing an employee on the ground of SOSR:

  • Business reorganisations: if a change to an individual’s terms and conditions of employment is necessary and the employee refuses to accept the proposed changes, or the matter results in the employee being terminated and offered new employment on fresh terms and conditions, SOSR could qualify as the reason for the dismissal.
  • Conflicts of interest: if an employee becomes involved in a situation that presents a potential conflict for the employer in terms of its business interests, dismissal may be justified. The employer would need to show the employee had access to, and could potentially compromise its confidential information and/or close business connections, creating a genuine commercial risk if the employee were retained.
  • Personality clashes/poor fit: an individual’s performance may be unproblematic, but if their manner is causing substantial disruption to the business or other personnel are threatening to leave if the employee stays, dismissal under the banner of SOSR may apply.
  • Pressure from third parties: if there is strong demand from a client, supplier or close business contact for you to let go of an employee, or if they refuse to work with an employee or allow them on their premises, then depending on the importance of the third party’s continued business or influence or seriousness of any threat to withdraw their custom, this could support the termination of the employee.
  • Reputational risk: if an incident affecting an employee in or outside work causes you great concern or disquiet about having an association with them (i.e. criminal proceedings or something incompatible with your company principles or values), dismissal could be warranted.
  • Breakdown in trust and confidence: the most common application for an SOSR dismissal, this can take many forms; where an employee demonstrates a growing hostility or mistrust in the organisation (or its personnel) without just cause, declares the employment relationship untenable or continues to pursue grievances that have been properly dealt with. Essentially, this needs to be a situation where the employment relationship has broken down to such a degree – either in the opinion of the employee or employer – that it is irretrievable.

Often there may be an element of misconduct or incapability in SOSR scenarios; for example, an employee’s resentment towards the organisation may lead to a failure to comply with reasonable management instructions. However, for SOSR to be sustainable and used lawfully, it must be the sole or principal reason for the dismissal. This is because its ‘sweep up’ nature covers dismissals that do not fall into another category. If the matter relates more to an employee’s conduct or performance, that should form the basis for any formal procedure/termination that follows.


There needs to be a situation where the employment relationship has broken down to such a degree that it is irretrievable

Procedure

If an employer has established SOSR correctly, a fair process must then be followed before deciding on dismissal. Care should be taken not to refer to ‘disciplinary’ or any other label that could confuse the true reason for the action. There is no official guidance but best practice is to afford the employee the same safeguards as under a disciplinary process, which would include:

  • writing to the employee inviting them to a formal meeting and stating the purpose
  • holding a formal meeting at which the relevant issues can be discussed, where the employee may make representations and is offered the right to be accompanied
  • notifying the employee in writing of the decision, i.e. to terminate their contract of employment on the ground of SOSR, and giving the right of appeal.

Before proceeding to termination, the employer should explore, and be seen to give consideration to any viable alternatives such as redeployment, workplace mediation, changing the employee’s work patterns, reporting line or location or any other measures that may provide a resolution.

Is it safe?

Before electing for dismissal, employers should be satisfied they have all the necessary evidence to support the decision so that should the employee bring a claim, they are in the strongest position to defend it.

For instance, where the matter relates to a breakdown in relations, documentation highlighting the employee’s sentiments/level of bad feeling or obstructive behaviour will be of key importance. So, too, will written examples of the employee repeating historic complaints or declining to entertain attempts made by the employer to resolve the matter.

In cases where the employer maintains harm will be caused to the team or the business if the employee remains, examples should be provided of specific clashes between employees, or where the manner or management style is at odds with the culture of the workplace.

A balance will need to be achieved between maintaining fairness and confidentiality toward the individual, and gathering evidence from employees who may be concerned about repercussions and being seen to contribute toward the employee’s downfall. Any information gathering in the course of a SOSR process needs to be conducted sensitively, and employers should take professional advice at an early stage to minimise the risk of claims.

Conclusion

As with any severance, SOSR is not without risks and because of the more unfamiliar nature, employees may be more inclined to challenge a dismissal. Further, employers who find themselves in the tribunal will need to convince a judge of the seriousness of the situation, and that termination was the only option in the circumstances. But with proper advice, careful planning and execution, SOSR can offer the solution to a difficult situation.

Helen Crossland is a Partner in the employment team at Hamlins LLP

Further information

  • Related competencies include Managing people
  • This feature is taken from the RICS Construction journal (June/July 2015)