Employers sometimes argue that they must dismiss an employee because of a complete breakdown in trust and confidence, and that this is sufficient to constitute a fair reason in the “some other substantial reason” (SOSR) category. SOSR is one of the five potentially fair reasons for dismissal under the Employment Rights Act 1996. While loss of trust and confidence has been held to amount to SOSR, reliance on the loss of trust and confidence alone will not usually be enough to establish a fair dismissal, and Employment Tribunals will look carefully at the surrounding circumstances.
In the case of Handshake Ltd v Summers (2013), the Employment Appeal Tribunal contemplated a case where an employer sought to rely on SOSR following their dismissal of Mr Summers due to a dispute about a profit sharing scheme and a failure to agree on terms of employment. Having heard all the evidence in the case, the EAT said this was a “power struggle” but that neither party had acted as if the relationship had broken down. There was a debate over terms of employment, but opening the debate did not amount to a breach of the duty to maintain trust and confidence. There was also nothing about the way in which the debate was conducted which suggested that trust and confidence had broken down. Mr Summers claim for unfair dismissal was upheld.
SOSR is a complex area and the Court of Appeal made it clear in the case of Leach v The Office of Communications (2012) that a breakdown in trust and confidence is not a “convenient label” to stick on any situation where the employer cannot easily rely on one of the other four fair reasons for dismissal under the Employment Rights Act 1996 – please see our article on this case here. SOSR is very fact specific and the best approach is to seek advice if a situation arises.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).