SOSR dismissals
One of the five potentially fair reasons for dismissal under the Employment Act 2006[1] is the residual catch-all ground of “some other substantial reason” (commonly abbreviated to “SOSR”). This is an additional basis for termination besides capability, conduct, redundancy and illegality[2]. Specific examples of a “substantial” reason are not provided in the legislation but case law suggests that the reason must not be “frivolous or insignificant”. The test is that the reason must be such as to justify the dismissal of an employee holding the position which the employee held.
As in any case of dismissal, an employer must show not only that it had a fair reason to dismiss but also that it followed a fair process in effecting the termination. There is a two-stage test when determining whether an employee was fairly dismissed for SOSR:
- the employer must show that SOSR was the reason, or the principal reason, for the dismissal; and
- the decision to dismiss for SOSR has to be reasonable overall (the tribunal would look at all the relevant circumstances including the administrative resources and size of the organisation).
It is still possible for a tribunal to find that an employer dismissed an employee fairly, even if they failed to follow a fair procedure[3] where the employer can show that this would not have served any purpose because, for example, the employee had no desire to remain with the organisation. The circumstances in which this is likely to be the case are, however, exceptional and usually the essentials of a fair process, which involve consultation (where appropriate) and considering alternatives to dismissal, should be followed.
Common examples of SOSR dismissals
- Business reorganisation – whilst dismissals in business reorganisations often fall within “redundancy” there may be cases where a restructure does not give rise to a redundancy situation (i.e. the work is not ceasing or diminishing). For example, where the need for employees to do work of a particular kind does not cease or diminish, but rather it has been reorganised into a new role and/or an employee may not be considered a good fit within the new structure.
- Refusal to accept changes to terms and conditions – in circumstances where an employer wants to change the employee’s term and conditions but the employee refuses to accept the changes and the only option available to the employer is to give notice to terminate the employment but offer to re-engage them on new terms (commonly referred to as “fire and rehire”). In such cases, the employer would need to show that the changes were for good business reasons as opposed to some arbitrary reason. Fire and rehire practices, however, should only ever be used as an absolute last resort e.g. where the changes are critical and agreement is not possible.
- Personality clashes and irreconcilable differences – where, as a result of a personality clash or irreconcilable differences, employees cannot work together. The conflict would have to cause substantial disruption to the business, such as creating an atmosphere which had become so tense it was unbearable and, generally, the situation would have to be irredeemable. Although a breakdown in employee relations might be a fair reason, dismissal for SOSR should be viewed as a “last resort” and only considered when resolving the situation has become business critical. A tribunal would expect the employer to have taken all reasonable steps to resolve the problem short of dismissal (i.e. redeploying one of the workers, changing work patterns and/or attempting to mediate).
- Breakdown in trust and confidence – it may be justifiable to dismiss an employee because of a breakdown in trust and confidence, however caution must be applied. Whilst loss of trust and confidence has been held to be a potentially valid SOSR reason, reliance on this alone will not usually be enough to establish a fair dismissal and the tribunal will often look carefully at the circumstances surrounding the dismissal. Potentially, if it involves something the employee has “done” or “not done”, there may be a conduct aspect also.
- Reputational risk – where an employer considers that an employee’s conduct is sufficiently serious to justify dismissal on the basis that continuing employment would have a reputational impact on the business. Dismissal as a result of reputational risk is very fact specific and employers face a high hurdle when relying on this ground to dismiss fairly. However, if the employer is in an industry that entails safeguarding or requires a high level of trust in carrying out duties or providing services, it is more likely that the dismissal will be viewed as fair where it can be shown that the employee’s behaviour undermined those core expectations. That said, an employer cannot just assume a reputational risk where an employee faces criminal charges; consideration must be given to the circumstances including the nature of the employee’s role, relevance of the alleged criminal conduct, and how this might affect their engagement with others.
- Third party pressure to dismiss – pressure from a third party to dismiss an employee can amount to SOSR. In some industries or circumstances, the identity of an employee performing a role for a key client can give rise to an issue. The employer may be forced into a situation of choosing between the valued client relationship (on which the viability of the business, or part of it, may depend) and its duty of fairness to the employee, particularly where the client’s objection may be unreasonable. In considering a SOSR dismissal, some actual pressure has to be exerted by the third party and the employer will need to have considered other options such as redeployment. It may also be relevant to fairness whether the employer has tried to change the client’s mind and whether they have investigated the basis of the demand to remove the employee.
Challenges to SOSR
In response to a SOSR dismissal, the employee might seek to argue that dismissal was not for a potentially fair SOSR ground but, in fact, an alternative “unfair” reason. Employers should bear in mind that, for some “automatically” unfair dismissal claims, a minimum period of qualifying service is not required. For example, an employee may assert that the reason they were dismissed was that they:
- requested a flexible working arrangement;
- made a whistleblowing disclosure;
- undertook jury service;
- made a minimum wage claim;
- were pregnant or on maternity/paternity leave; or
- are/were a member of a trade union or were taking part in official industrial action.
Accordingly, employers should be able to demonstrate the rationale for a SOSR outcome and provide evidence of this to counter any assertion that the termination of employment was unfair. They should keep good records of their assessment of the situation and of any considerations as to resolution via means other than termination; seeking representations with the affected employee and anyone else involved is also generally required. Depending on the context, it might be necessary to investigate allegations (e.g. where employees will not work together or a third party puts pressure on the employer to dismiss). Dismissal must be within the range of “reasonable responses” open to the employer.
Guidance for employers
Employers are now generally more aware of the importance of having a robust and objective reason for dismissal and following a fair process. Inevitably, though, there areas in which things can be tightened up and employers can protect themselves from claims of unfair dismissal or discrimination.
The following tips and key takeaways may be helpful:
- Make sure that the characterisation of a “SOSR” situation is correct and it is not disguised capability or conduct underlying the HR process followed. Different reasons for dismissal require different approaches and, potentially, different procedural steps;
- Bear in mind that the SOSR relied on – i.e. the specific reason – must be “substantial”;
- Investigate and document the evidence on which you rely in support of dismissal on the grounds of SOSR – the level of investigation should be appropriate to the circumstances and balanced;
- Consider and explore alternative solutions before resorting to dismissal. Where appropriate, consult with the employee about the potential dismissal and allow them to make representations before deciding to dismiss; and
- Remember that “dismissal” must be within the range of reasonable employer responses; if you are unsure, take legal advice.
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References:-
[1] Section 113(b)
[2] See related content in our note on Dismissal
[3] Gallagher v Abellio Scotrail Ltd EAT/0027/19/SS
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