“Some other substantial reason”

Under Section 94 of the Employment Rights Act 1996, an employee has the right not to be unfairly dismissed. If an employer wants to dismiss an employee with the necessary length of service to enjoy protection under the Act, the employer needs to be able to show that they had a good reason to take that action and that they did so in a fair manner.

If an employee started work with the employer after April 6th 2013, they need to have built up two years’ continuous service before they’re protected by the law. Those who started work before that date need only have one year’s continuous service to achieve the same protection.

If an employee enjoys protection under the law, the employer needs to be wary when considering dismissal.

Potentially fair reasons for dismissing an employee

There are five of these:

• the conduct of the employee;

• the capability of the employee to do the job;

• redundancy;

• a statutory duty or restriction which stopped the employee continuing in their job (for example, those working in the security industry must hold an SIA-approved qualification); or

• Some other substantial reason (SOSR)

What is ‘some other substantial reason’?

The fifth category covers almost any reason that is not covered by the first four. However, it needs to be a significant reason, not a trivial or frivolous one.

Some situations in which SOSR may well apply are as follows:

Personality clashes

Sometimes, employees just don’t get on with each other. The results of such a situation can range from mild unpleasantness to serious disruption to the workplace, depending on who the employees are and the roles they fulfil.

If the latter is the case, the response of dismissal can be covered by SOSR. However, it is important that the employer can show that the disruption caused was serious enough to be causing real harm to the business.

They will also be expected to show that they have done all that they reasonably can, short of actual dismissal, to solve the problem.

Such actions could be:

• Moving one of the affected employees to another department or section

• Altering work patterns so that the affected employees are kept apart

• Instigating mediation to try and resolve the situation to everyone’s satisfaction

Refusal to accept changes to terms and conditions

An employment contract can only be varied in accordance with its terms or with the parties’ agreement.

However, an employee is contractually entitled to resist unilateral changes to their terms. There are certain situations in which the change amounts to a breach of contract. When this happens, the employee can resign and claim unfair constructive dismissal.

To be able to unilaterally change the terms and conditions of the employment contract, the employer needs to be able to show that they imposed the changes for a ‘sound business reason’. This does not mean that the changes were vital to the survival of the business but the business should put forward evidence to show that the reasons for the change were not trivial.

If it can be shown that the overwhelming majority of the employees (or an involved union) have decided to accept the change, an individual employee who has been dismissed for refusing to accept the change may have a hard time proving that the dismissal was unfair.

Business re-organisation

If the employer is restructuring the business but no redundancies are being made, they may be able to rely on SOSR as a potentially fair reason for dismissal.

It is often the case that during a re-organisation, employees’ terms and conditions can be changed. If an employee refused to accept the changes to those terms and conditions, their dismissal may be covered by SOSR.

Conflicts of interest

There are situations in which an employee finds themselves in a position where their personal circumstances may conflict with the interests of the business. If this is the case, the employee’s dismissal may well be covered by SOSR.

As with other dismissals for SOSR, the business will need to prove that the employee poses a risk to its interests. For example:

• If the employee was able to access commercial information

• If the employee had a personal connection to a competitor or somebody who worked for a competitor

• If the employer was genuinely afraid that commercial information might be leaked (although they would have to prove that such a fear was real)

Pressure from third parties

Sometimes, a third party can take a dislike to – or raise an objection against – an employee continuing to be employed by the business. If a third party, perhaps a customer or supplier, calls for an employee to be dismissed, the employer can use SOSR to justify it, provided that the business can demonstrate that the third party’s business is crucial to its own and that the third party is serious about its intention to leave if the employee is not dismissed.

A major client demanding that the dismissal of the employee is a sine qua non for continuing to contract with the business will carry more weight in any unfair dismissal claim than a minor client who requests the dismissal but evinces no other consequence if the dismissal does not take place.

Breakdown in trust and confidence

One of the implied terms in an employment contract is the duty of mutual trust and confidence. From an employee’s point of view, this involves an agreement to serve the employer loyally and in good faith, and not to act against the interests of the business.

Elements of this duty include:

• Not misusing the employer’s property or resources

• Not poaching the employer’s customers or clients once the employee has left the business

• Not directly competing with the employer’s business

• Not deliberately taking action which would disrupt the employer’s business

• Not acting in a way that would damage the employer’s reputation

If an employee has behaved in such a way as to cause a breakdown in trust and confidence between them and their employer, they can be dismissed using SOSR as a potentially fair reason for dismissal.

It’s important for employers to bear in mind that even if they can show that there was SOSR for the dismissal, they still have the responsibility to prove that they acted fairly when dismissing the employee.