The case of L v K makes clear that, where there is insufficient evidence to conclude that an employee is guilty of criminal conduct, an employer may still be able to rely on “some other substantial reason” to fairly dismiss.  However, it will be important to be clear as to the proposed reason for dismissal, both at the start of the disciplinary procedure (to ensure the employee is aware and all relevant evidence is considered) and at the Tribunal.

The Court of Session (Inner House) has overturned the EAT’s ruling that the dismissal of a teacher was unfair where he was charged, but not prosecuted, for possessing indecent images of children on his home computer.  The Court considered that the Employment Tribunal was entitled to conclude that dismissal was “for some other substantial reason” and within the band of reasonable responses, given the employer’s statutory responsibility to protect the children in its care.

In the EAT’s view, the Employment Tribunal had been wrong to conclude that the reason for dismissal fell within the “for some other substantial reason” category and was fair.  The EAT considered that the reason fell within misconduct (which was not made out as the employer did not have a reasonable belief that the employee was guilty) and that, if it had been for “some other substantial reason”, this was in the form of concerns about reputational damage which had not been clearly put to the employee and did not justify dismissal.

Conversely, the Court of Session agreed with the Employment Tribunal’s categorisation of the dismissal as “for some other substantial reason”.   In the Court’s view, the employer’s concern that it had a statutory responsibility to protect children was an important part of the reason for dismissal; it had decided that it could no longer place the necessary trust and confidence in the teacher, due to the real possibility that he was an offender. The Tribunal was entitled to conclude that the employer’s decision to dismiss for this reason did fall within the band of reasonable responses.

The Court noted that the employer had an additional concern about reputational risk but found that there was nothing to support that this was the main reason for the dismissal.  But in any event, dismissal would not have been rendered procedurally unfair simply because the letter inviting the teacher to the disciplinary hearing failed to mention reputational risk in terms.  The teacher understood the nature of the complaint and the reason for dismissal was based on elements identified in the letter and highlighted in the report given to him in advance; reputational risk was mentioned in the investigatory report and discussed at the hearing.  Given that the issue of reputational risk was only ancillary to the main reason, the Court did not consider in detail the EAT’s concerns that there was insufficient evidence of such a risk to justify dismissal, although the Court commented that it thought the risk “self-evident”.

The case makes clear that, where there is insufficient evidence to conclude that an employee is guilty of criminal conduct, an employer may be able to rely on “some other substantial reason” to fairly dismiss.  However, in the majority of cases where the statutory duty to protect children or vulnerable adults does not arise and the employer is relying solely on reputational risk, the nature of any real reputational risk is likely to be more closely examined. Relevant factors may include the identity of the employer (for example if it is a high profile public authority), the seniority of the employee’s role, and whether that role would provide opportunities for similar criminal offences – factors which all tipped the balance in favour of dismissal for reputational risk being fair in the case of Leach v OFCOM.  The nature and seriousness of the allegations, the reasons why and terms on which charges have been dropped and the likelihood of press interest (factors identified by the EAT in L v K) will presumably also remain relevant.

Anna Henderson
Anna Henderson
Professional Support Consultant, Employment, London
+44 20 7466 2819