Can employers fairly dismiss employees charged with a criminal offence?

Should an employer be able to dismiss an employee on the basis of concern for its reputation, when the employee is charged with, but not convicted of, a criminal offence?

Lodders employment law specialists examine a recent case.

Background of the case

The recent case of Lafferty v Nuffield Health UKEAT/0006/19 involved a hospital theatre porter for Nuffield, a registered not-for-profit charity. His duties included moving anaesthetised patients to and from operating theatres. He had previously maintained a 20-year unblemished disciplinary record.

Whilst he was employed by Nuffield, he was charged with assault with the intention to rape, with the charges having no direct connection to his work.

During an investigational meeting with the employee, the employer sought clarification about what had happened. Nuffield decided against paid suspension, as the employee could not provide any information about the timing of his trial, which meant that any period of suspension would be open-ended and therefore not a proper use of charitable funds.

Continuing to employ a person facing such charges may have been regarded as a breach of the hospitals’ duty of care to patients, especially considering the increased amount of public scrutiny towards charities such as Nuffield and their duties to beneficiaries. The employer also took into account a recent reminder from the charity commission that charities needed to be concerned about the risk of reputational damage.

The dispute

The employer dismissed the employee on notice, given the potential for serious reputational damage if the employee was convicted.

Given the potential injustice to the employee if the charges against him were dropped or if he was acquitted, the employer advised him that in those circumstances he would be reinstated on the same terms and conditions of employment, with his continuity of employment preserved.

However, he would not receive pay for the period during which he had not been employed. The employee’s post was held open and his work covered by temporary staff.

Unfair dismissal

The employee claimed unfair dismissal at an Employment Tribunal, however, his claim was dismissed on the basis that:

1. The employer had shown that the reason for dismissal was that it considered, should the employee be convicted of the charges, there was a genuine risk of potential damage to its reputation. These concerns had not been frivolous or trivial, but were sincerely held. The reason for dismissal fell under ‘some other substantial reason’, a potentially fair reason.
2. The dismissal had been fair. It noted that the employee had vigorously denied the charges against him and was innocent until they were proven. The central question was what would have been reasonable for the employer to do in the circumstances. Nuffield had sought clarification from the employee about what had happened and when his trial might take place. It had considered suspension as an alternative to dismissal, but took the view that the potential for serious reputational damage posed too great a risk, especially in a climate where there was increased and close scrutiny of the charitable and not-for-profit sector and its employees. The charity therefore acted reasonably in dismissing the employee.

The employee appealed the decision to the Employment Appeal Tribunal, but the decision of the Employment Tribunal was upheld – that the employee was fairly dismissed for ‘some other substantial reason’, given the potential reputational risk to his employer.

Advice for employers

Each case will turn upon its own facts, however, it is useful for employers to consider the following should they need to make a decision in similar circumstances:

• The reliability of information about the employees’ alleged conduct, which would clearly be greater if a decision had been made to prosecute.
• Even where there is a decision to prosecute, an employer may not be acting reasonably if it simply takes the fact of that decision at face value, without at least some inquiry as to the circumstances.
• Whether the nature of the employees’ job gives them an opportunity to commit the kind of offence with which they have been charged.
• Whether there is a risk of reputational damage. In this case, the risk was to an organisation in the charitable sector, which was under particular scrutiny at the time as a result of conduct that had recently been exposed in that sector in relation to employees engaging in sexual offences. The risk of reputational damage can provide justification for dismissal despite the fact that criminal charges against an employee are not proved. Whether or not it does so will depend on the facts of the case.
• Finally, whether alternatives to dismissal have been considered, and whether the employer has acted reasonably in rejecting them.

The Employment Appeal Tribunal held that it would not be open to an employer dismissing an employee for reputational reasons just because the employee had been charged with a criminal offence. There would need to be some relationship between the matters alleged, and the potential for damage to reputation. For example, if an employee whose duties did not involve driving was charged with a serious driving offence, it would be unlikely that their continued employment would have an adverse effect on the employer’s reputation, or not such an adverse effect that would provide a sufficient reason to dismiss. However, even in circumstances in which a risk to reputation appears to be more obvious, there should not be an assumption of risk without consideration of the matter.

In the case of Lafferty v Nuffield Health, the Employment Appeal Tribunal asked whether a large employer would genuinely be financially troubled by suspending an employee on full pay. In this case, given Nuffield’s charitable status, the Employment Tribunal had been entitled to find that Nuffield’s conclusion that suspension on full pay was not an option that fell within the band of reasonable responses. The remaining option was dismissal, and the Employment Tribunal found that the decision to dismiss did not fall outside the reasonable band of responses open to a reasonable employer.

More information

Lodders’ team of employment solicitors offer accurate, focused, and solution-based legal advice to a wide range of clients. We have forged an excellent reputation for advising SMEs, publicly owned companies, charities and other bodies, as well as senior employees and stakeholders in respect of all manner of employment law related issues and, in particular, in respect of discrimination of all kinds.