Can an employer justify dismissing an employee for events that happen outside the workplace? In two recent decisions, the Employment Appeal Tribunal (EAT) had to address this question with two distinct emphases. In Lafferty v Nuffield Health [2020], the issue was whether it was fair to dismiss an employee on the basis of criminal charges which were alleged but not proved. In Q v Secretary of State for Justice [2020], the question was whether an employer had fairly dismissed an employee based on aspects of her family life, despite her Article 8 right to privacy.
Criminal charges in Lafferty
Nuffield Health is a charity with several hospitals throughout the UK. Mr Lafferty had worked for Nuffield as a co-ordinator and theatre porter since 1996. His duties included transporting anaesthetised patients to and from operating theatres in the hospital. Throughout his employment, Mr Lafferty’s disciplinary record was unblemished. In February 2018, Mr Lafferty was arrested and charged with assault with intention to rape. He appeared in court and was released on bail. Mr Lafferty informed the hospital director of his arrest and was suspended on full pay pending investigation.
Investigating the risk to reputation
As part of the workplace investigation, Mr Lafferty submitted the police report of the incident, his bail record (which set out details of the charges) and his version of events (he denied the charges). Given the risk of damage to its reputation, Nuffield held a further investigatory meeting to address Mr Lafferty’s ongoing employment.
This was run by Mr Lamb, a hospital manager with considerable experience. Mr Lamb considered that if Mr Lafferty were to be found guilty of the charges, it would clearly cause reputational damage to Nuffield. He was also aware that other charities had suffered problems following inappropriate behaviour by staff.
Mr Lamb decided that Mr Lafferty should not return to work until determination of his trial. However, no specific trial date had yet been given and Mr Lamb did not consider it an appropriate use of charitable funds to pay Mr Lafferty’s salary during a potentially open-ended period of suspension. He also considered that the potential reputational damage to Nuffield outweighed Mr Lafferty’s unblemished record, particularly in light of recent Charity Commission guidance on reputational risk. Mr Lafferty’s employment was therefore terminated on notice.
Mr Lafferty’s dismissal was upheld on appeal. In addition to the reputational risks, Nuffield noted that Mr Lafferty worked in an area where patients were at their most vulnerable. Should he ultimately be convicted, Nuffield would have failed in its duty of care to its patients if it had continued to employ him in the interim, particularly given the heightened expectations on charities to protect beneficiaries of their services. Nuffield offered to reinstate Mr Lafferty should he be acquitted or the charges dropped, on the same terms and conditions of employment, with his continuity of service preserved. However, he would not receive pay for the period during which he had not been employed.
Mr Lafferty brought a claim for unfair dismissal in the employment tribunal.
First instance: fair dismissal
The employment tribunal was satisfied that Nuffield’s concerns about potential reputational damage were not frivolous or trivial but sincerely held. Nuffield had also shown that the reason for dismissal was the risk of potential reputational damage should Mr Lafferty ultimately be found guilty. It therefore had a potentially fair reason for dismissal (‘some other substantial reason’).
As to whether Nuffield had acted reasonably in treating the above as sufficient to justify dismissing Mr Lafferty, the tribunal observed that it had not reacted in a ‘knee-jerk’ way. Rather, Nuffield had sought clarification from Mr Lafferty about what had happened. It had also considered alternatives to dismissal, namely suspending Mr Lafferty, but had considered that the potential for serious reputational damage posed too great a risk given heightened scrutiny of the charitable sector. It had therefore acted reasonably in dismissing Mr Lafferty.
EAT: acting reasonably?
On appeal to the EAT, Mr Lafferty argued that the tribunal had erred by finding that Nuffield had acted reasonably in treating the risk of reputational damage as a sufficient reason to dismiss in all the circumstances. However, the EAT disagreed. It was clear from Leach v The Office of Communications [2012] that the risk to reputational damage can justify dismissal, even though criminal charges are not proved.
Further, it was reasonable for Nuffield to be concerned about what would happen if Mr Lafferty were to be convicted, since that was the point at which the damage to reputation would crystallise. The tribunal had found that the risk was not trivial and had been identified by experienced managers who genuinely believed that it existed. There had been no error of law in the tribunal’s approach.
EAT: adequate investigation?
Mr Lafferty also argued that Nuffield’s investigation had been inadequate. He said it should have sought to find out more about the charges (including by speaking to his lawyers and the prosecution) and assessed any information received critically.
The EAT rejected this argument. Not only had there not been a ‘knee-jerk’ reaction by Nuffield but it had also taken steps to find out more about the charges from Mr Lafferty (for example, by asking for the bail report and police report). Further, it was arguably self-evident that there would be some risk to Nuffield’s reputation if it continued to employ Mr Lafferty, given his responsibility for vulnerable patients.
Nuffield had considered alternatives to dismissal and acted reasonably in rejecting them. It simply could not continue to employ Mr Lafferty in his role given the nature of the charges. The alternative was suspension but this created significant potential costs, particularly for a charity and when no trial date had been fixed. It was also unclear that enquiries of the police and prosecution would have yielded further information.
Given the scrutiny that charities face, Nuffield’s conclusion that suspension on full pay was not an option fell within the band of reasonable responses, as did its decision to dismiss Mr Lafferty.
Family issues in Q v Secretary of State for Justice
Q had been employed as a probation service officer since 1994. In 2014, there was an altercation at her home, during which it was alleged that she had been violent towards her daughter. Social services became involved and, although Q denied the allegations, her daughter was placed on the Child Protection Register and made subject to a Child Protection Plan.
Social services told Q to inform her employer of the incident, given the safeguarding aspects of her role, but she did not. When the probation service learned of the incident directly from social services, it started disciplinary proceedings against Q and found her guilty of gross misconduct for not reporting it. Of particular concern was Q’s lack of professional judgement, her refusal to accept that the onus was on her to inform the probation service of the allegations and the potential impact of her conduct on the probation service’s reputation. Q was demoted and given a final written warning.
By February 2015, Q’s daughter was no longer on the Child Protection Register or subject to the Child Protection Plan. Q informed her senior manager, H, of this, who told her to keep both H and her line manager updated if she had any future personal involvement with social services. In March 2015, there was yet another altercation at Q’s home. The police and social services were called out and Q’s daughter was made subject to a further Child Protection Plan.
Q informed H of the incident but not her line manager. She also did not tell H about the existence of, or reason for, the new Child Protection Plan. H learned of these facts a few months later and dismissed Q following further disciplinary proceedings. This was because she had failed to keep the probation service informed and her dealings with social services, which is a statutory partner of the probation service, created the prospect of reputational damage. Q claimed unfair dismissal.
First instance: fair dismissal
The employment tribunal found that the probation service had acted reasonably in dismissing Q. Not only had it recently given her a final written warning for gross misconduct in almost identical circumstances, but Q knew that she was under an obligation to inform it if she had further dealings with social services in connection with her family life. The probation service is also part of the criminal justice system and, as a result, there may be higher expectations of employees’ conduct compared to other sectors.
The tribunal accepted that Q’s Article 8 right to a private and family life had been engaged. However, it held that the interference with this right was proportionate. The probation service is a statutory partner of social services and required to ensure that its staff behave in a way that does not undermine its obligations to safeguard the public. It was therefore important for Q to share certain information about her private life, such as her lack of cooperation with social services and the risk she allegedly posed to her daughter. Both issues threatened to cause reputational damage to the probation service and to undermine the confidence of the public should it ever become aware of these aspects of Q’s private life. Q appealed to the EAT.
EAT: intrusion into family life?
Auberbach J (sitting alone) considered the relationship between human rights law and unfair dismissal law. When deciding whether a dismissal is fair, an employment tribunal is required to assess whether the sanction of dismissal involves a disproportionate and unjustified interference with an employee’s Article 8 rights. If it does, that dismissal will fall outside of the band of reasonable responses. Whether that is the case is for an employment tribunal ultimately to decide.
The EAT held that the employment tribunal was entitled to arrive at the decision it did. Admittedly, the interference with Q’s Article 8 rights was very substantial. But the tribunal had considered the extent of the disclosure obligations placed on Q. The probation service had not asked for every detail of her dealings with social services, only to be updated with any further allegations about her conduct. Further, it had imposed this disclosure obligation on Q to preserve its ability to discharge its functions effectively. In particular, the probation service needed to safeguard its reputation and relationships with partners, including social services.
The EAT rejected Q’s argument that the interference was disproportionate because her alleged conduct was not in the public domain, nor was there a risk of it becoming so. The probation service had a legitimate aim in safeguarding its reputation and it could not simply ignore as irrelevant the fact that Q had been accused of a child protection issue. Q’s conduct also raised legitimate concerns about her professional judgement: she had knowingly withheld information she had been asked to disclose, failed to engage with social services and chosen to ignore her previous written warning. These facts combined could have undermined public confidence in the probation service.
Comment: comforting decisions but employers must still take care
Employers may derive some comfort from these decisions. They support the notion that employers need not always turn a blind eye to unsettling things they discover about employees, even if such things are seemingly unconnected to the workplace. In addition, employers have a right to be proactive and to protect their reputations, even if the (potentially) damaging event is yet to happen or be made public. These decisions also remind us that unfair dismissal law is, at its core, a review of an employer’s decision-making processes. As was underscored in Lafferty, the key question is whether the employer acted reasonably in taking the decision to dismiss and not whether the employee suffered a grave injustice as a result.
Still, some caveats are worth bearing in mind. The first is that employers cannot rely uncritically on information they receive about employees when deciding to dismiss: according to Lafferty, reasonable employers undertake enquiries of their own. Moreover, it is difficult to ignore the unusual facts of these cases. In the first, a hospital worker in the charitable sector, with responsibility for anaesthetised patients, is accused of sexual assault. In the second, a probation officer is repeatedly in difficulty with social services because of the risk she allegedly poses to her daughter. They are undoubtedly at the far end of the spectrum. One wonders how much higher the bar would be for an employer to effect a fair dismissal if the allegations were not so severe and the relationship between the allegations, role and sector not so concerning.
This article was first published in the Employment Law Journal, April 2020.