Posted by James Sage, Partner
Can you fairly dismiss an employee in respect of unproven criminal charges?
If you are notified that one of your employees has been charged with a criminal offence, one of your immediate concerns is likely to be whether their alleged conduct could seriously damage your organisation’s reputation.
If so, you may want to consider dismissal to minimise the risk of damage. But at this stage the criminal allegations are unproven; the employee has only been charged. To what extent can you rely on the risk of damage to your business reputation, rather than actual damage suffered, in deciding to terminate employment?
This was considered in the recent case of Lafferty v Nuffield Health UKEAT/0006/19.
Mr Lafferty worked for Nuffield Health, a registered not-for-profit charity that owns and operates hospitals, as a co-ordinator and theatre porter. In February 2018 he was arrested and charged with assault with intention to rape. Both he and the Police informed Nuffield Health of the arrest and Mr Lafferty was subsequently dismissed for “some other substantial reason” (“SOSR”), namely, the potential damage to its reputation at the criminal trial, especially if Mr Lafferty was convicted.
Mr Lafferty’s appeal against his dismissal was rejected although he was informed that if the charges were dropped or he was acquitted, his employment would be reinstated.
He lodged a claim for unfair dismissal which was dismissed. He was then acquitted of the charges at trial and returned to work for Nuffield Health. Despite this he submitted an appeal to the Employment Appeal Tribunal (“EAT”).
The EAT held that there had been a potentially fair reason for dismissal (SOSR) and that Nuffield Health acted reasonably in treating it as sufficient reason to dismiss in the circumstances. The dismissal was fair. In particular:
- the potential for serious reputational damage was genuine;
- the risk was increased by a climate of greater regulatory scrutiny of the charitable and not-for-profit sector after recent revelations about employees in the sector engaging in sexual offences;
- there was no reasonable alternative to dismissal because given the nature of the charges it was inappropriate for him to work with vulnerable patients and as there was no trial date, suspending him indefinitely would have been an improper use of charitable funds.
Key points to note
- It is potentially reasonable to rely on the possibility of reputational damage as opposed to any damage having actually occurred. However, this will depend on the specific circumstances. Reputation is of particular importance within the charity and health and social care sectors, and it was relevant that the industry has recently been under increased scrutiny from the Charity Commission and the media.
- The investigation needs to be reasonable and proportionate, and concerns about reputational damage must be genuinely held. In this case, Nuffield Health had taken reasonable steps to look behind the allegation, including obtaining the bail report and police report and it knew that a decision had been made to prosecute (it was no longer just a charge).
- Alternatives to dismissal must be carefully considered. Suspension was not reasonable in this case because no trial date had been set and paid suspension would have incurred significant charitable funds. In other circumstances, suspension may be reasonable.
- SOSR dismissals are usually highly fact specific and specialist advice should be sought.
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