Can employers dismiss staff for conduct outside of the workplace?

When does conduct outside the workplace become an employer’s business?

An employee’s conduct outside of the workplace and outside their course of employment, is often of little concern to an employer.  However, if the employee’s actions are such that they may damage the reputation of the company, erode the mutual trust and confidence of the employment relationship, adversely impact the ability of the employee to properly perform their role or otherwise present a risk to the business, then this will become a concern to the employer.  In these circumstances an employer may consider it necessary, reasonable or proportionate to take disciplinary action against the employee and possibly dismiss (depending on the facts). 
Would this be a fair reason for dismissal or is an employer exposing itself to an unfair dismissal claim?

Is it a fair reason for dismissal?

One of the five potentially fair reasons for dismissal is “some other substantial reason” (known as “SOSR”) – often seen as a “catch-all” reason when none of the others suffice. What constitutes “some other substantial reason” is not specifically defined in legislation, but adverse publicity or reputational issues often fall into this SOSR category.  To be successful in defending an SOSR dismissal on the grounds of reputational damage an employer will usually need to be able to demonstrate lost business, clients or customers or negative press as a direct result of the employee’s actions. Depending on the situation, this may be challenging.

To be a fair reason for dismissal an employer would first need to show that the misconduct outside of the workplace justified the dismissal of that employee holding that role.  Secondly, the employer must be able to show that its decision to dismiss was reasonable in all the circumstances (including the size and administrative resources of the employer).  It would need to show that their response to dismiss for SOSR was in the “range of reasonable responses” of a reasonable employer.  The tribunal would examine whether the employer had carried out a fair process, for example looking at factors such as whether the employer had carried out a fair investigation, considered other disciplinary sanctions short of dismissal and followed the ACAS code. 

What about criminal conduct?

In the case of Professor Whitty’s harasser, the incident has been recorded by the police as common assault and continues to be criminally investigated.  However, when an employee’s conduct outside of the workplace results in a criminal charge or conviction this does not automatically mean that they should be dismissed (but it is always worth reviewing any provisions concerning criminal conduct that may be included in the employment contract). 

When confronted with the situation of an employee facing a criminal charge or conviction, an employer should consider whether the employee’s conduct or conviction merits action because of its employment implications.  In certain circumstances it may be appropriate to suspend the employee pending criminal proceedings which may affect whether they can do their job.  This will be very context dependent and specific advice should be sought.  

When an employer considers that the criminal conduct may warrant disciplinary action the following guidance should be borne in mind, as stated by ACAS: 

• an employer should investigate the facts as far as possible, come to a view about them and consider whether the conduct is sufficiently serious to warrant initiating the disciplinary procedure;
• where the conduct requires prompt attention, an employer need not await the outcome of the criminal prosecution before taking fair and reasonable action (criminal investigations can take many months/years to conclude); and
• where the police are involved, they should not be asked to conduct any investigation on behalf of the employer, nor should they be present at any meeting or disciplinary meeting.

The interplay between the employment relationship and criminal proceedings is often complex – especially when the employee is a regulated individual (for example in the financial services or other regulated sector) and employers should take specialist advice. We work closely with our litigation experts and are on hand to offer support on these difficult situations.

What practical steps can an employer take when considering conduct outside of work?

We are seeing these issues arise in a number of guises; from the physical harassment of Professor Witty to employees posting offensive material on social media platforms (see our previous alert on historical offensive tweets).  Employers need to consider what action is proportionate and reasonable.  Such considerations should include:

• Does the misconduct relate to the employee’s employment, role or is it particularly relevant to the employer’s business?
• Following the misconduct is the employee able to properly carry out their duties?
• Does the misconduct cause damage to the employer’s reputation or business?
• Does the misconduct pose a risk to colleagues or client relationships?
• Is a disciplinary sanction, short of dismissal, more appropriate, proportionate and reasonable?
• In regulated industries is there an obligation to notify the regulator of the conduct?
• What other regulatory obligations arise and what impact does this have on the individual’s ability to carry out their role?

If you have any questions on the topics covered in this alert please get in touch with Paul Reeves, Leanne Raven or usual Stephenson Harwood contact.