Dismissing Employees on Some Other Substantial Grounds

“Some other substantial grounds” (SOSG) is frequently pleaded by employers as a defence to an unfair dismissal claim by an employee in circumstances which are not related to capability, competence, conduct or redundancy. While SOSG covers a wide variety of situations, there are certain limits attached to raising the defence.  Genuine reason for dismissal Where SOSG is used to justify a fair dismissal, the employer must establish that there was a genuine reason to dismiss an employee holding the job in question.  The employer must also provide evidence that the decision to dismiss on SOSG was reasonable in all the circumstances. Follow fair procedures Employers must ensure that the reason for the dismissal is accurately identified and ensure that the appropriate fair procedures are followed throughout the dismissal process. Precedent SOSG decisions There are no express limits on what constitutes SOSG. The courts have interpreted the law relating to SOSG, including the procedure that an employer is required to follow before confirming its decision to dismiss. Some of the more notable decisions are set out below: Business reorganisation Where a restructure does not give rise to an actual redundancy situation, SOSG may provide an alternative fair reason for dismissal.  For example, this can occur where jobs are being reorganized but there is no actual reduction in the numbers of employees or types of work to be done. Barnes v Gilmartin Associates (UK decision, persuasive only) Refusal to accept new terms A dismissal may be justified where an employer needs to change contractual conditions of employment and an employee refuses to agree to the change.  Dismissal for refusing to agree to unilateral contractual changes may fall within SOSG in certain circumstances. The employer must be able to show that the changes are necessary for sound business reasons and follow fair procedures which include consulting with the affected employees and considering their reasons for rejecting the change. Martland and others v Co-Operative Insurance Society Ltd (UK decision, persuasive only) Conflict of interest A commercial conflict of interest can arise during employment, such as where an employee has a close relationship with someone who works for a competitor.  To establish SOSG for dismissal in these circumstances, the employer must demonstrate that continuing to employ the employee would give rise to a real commercial risk arising from the conflict of interest. DC Foot v Eastern Counties Timber Co Ltd (UK decision, persuasive only) Personality clashes Where personality clashes are causing substantial disruption to the business and all reasonable steps have been taken to try and resolve the issue, there may be SOSG to justify the dismissal.  The fairness of a dismissal in these circumstances will depend on the size of the business and the level of disruption caused by the clash. If there are any alternatives to dismissal, such as redeployment or changing reporting lines, these should always be considered first. Treganowan v Robert Knee & Co Ltd (UK decision, persuasive only) Third party pressure to dismiss The SOSG defence may be established where a third party whose continued business is important to the employer threatens to cease trading with the employer unless a specific employee is dismissed. Our previous post delves into this issue more thoroughly and can be accessed by clicking here. Masini v Compass Group UK & Ireland Ltd (UK decision, persuasive only) Reputational risk SOSG may be appropriate where an employee has been accused of a criminal offence and the employer is concerned about the risk of reputational damage that continued employment would entail. The key question is whether it is reasonable in all the circumstance to dismiss on this basis. If the risk to reputation is genuine and serious, then dismissal may be justified. The employer must still follow fair procedures and give the employee a chance to respond before making a final decision. Expiry of a fixed-term contract The termination of a fixed-term contract is effectively a dismissal. Where such a contract comes to an end, the employer can often rely on redundancy as the reason for dismissal. In some cases, SOSG may be more appropriate if the redundancy rules do not apply— for example, where the contract was used to cover the absence of a permanent employee so there is no reduction in the need for employees to carry out the work. The expiry of the contract must be the genuine reason for the dismissal and the employee must have been informed that the employment was only for a particular period. Breakdown in trust and confidence A breakdown in trust and confidence between employer and employee may qualify as SOSG for dismissal. A breakdown in trust and confidence may overlap with some of the other reasons discussed above. Employers should be careful not to simply assert that trust and confidence have broken down and seek to rely on SOSG to dismiss a troublesome employee. If misconduct or poor performance is the genuine reason trust and confidence has broken down, the SOSG defence should not be used to avoid following the relevant disciplinary procedures. Plead SOSG carefully The nature of the SOSG defence means it invites employers to rely on it when it becomes clear that an employment relationship is deteriorating. While SOSG is essentially a catch-all provision, it must be pleaded carefully. The variety of scenarios in which SOSG may arise means that there are no express rules to establish the defence. What is fair will always depend on the particular circumstances. A decision to dismiss must be reasonable in all the circumstances, which is judged “in accordance with equity and the substantial merits of the case”. For more information on how to protect your business against unfair dismissal claims, please call the Peninsula 24-hour advice line on 0818 923 923 to speak with an adviser