Question: I run an outsourcing company and one of my customers is insisting that I dismiss an employee who is based at their site and who has worked for me for the last 5 years.
I’m reluctant to agree, as I don’t think they are being fair, but they are my biggest customer and they’ve threatened not to do business with me again if I don’t dismiss my employee. The only other job I have available to offer the employee is based hundreds of miles away and I’m sure he won’t accept it.
I can’t afford to lose the customer, but if I dismiss the employee could he take me to a tribunal?
Answer: As the employee has more than 2 years’ service with you he is protected from unfair dismissal. However, if you were to dismiss him, it is possible that this could constitute a potentially fair reason for dismissal under the relevant legislation. There are five potentially fair reasons for dismissal (capability, conduct, redundancy, breach of a statutory enactment and finally ‘some other substantial reason’ (SOSR)). Case law shows that SOSR can be used as a fair reason for dismissal in cases similar to the one you describe.
I do not have any details about why the customer is insisting that you dismiss the employee, which may be relevant when considering how to approach your customer’s request. If the customer’s request was discriminatory (e.g. they were asking for the employee to be removed because of his sexual orientation) or because of something like whistleblowing, then obviously other considerations would apply, so I assume that is not the case here.
As they are your biggest customer and they are threatening not to do business with you again in future, then it is more likely that dismissing the employee would be considered fair as opposed to, for example, a situation where it was one of your smaller customers or there was no threat of loss of business.
Before you dismiss the employee you should ensure that you follow a fair procedure. This will include considering whether dismissal would be an injustice to the employee and what you could do to alleviate that injustice. It will also include giving the employee the opportunity to comment on the situation before making a decision, and also giving him a right of appeal. There may be something in his contract of employment that deals with a situation like this, so it is worth checking. If the employee brings a claim, it will be harder for him to argue that the dismissal was unfair if his contract allows for termination in circumstances where a third party such as a customer has requested it.
A similar situation arose in the recent case of Masini v Compass Group UK & Ireland Ltd (2015) where the employee was employed by a catering contractor and was based on site at the client’s cafe where she worked as the cafe manager. The client insisted on a change of manager at the cafe following a fall in profits, despite the catering contractor asking that the cafe manager be given more time. The catering contractor looked for alternative work for its employee, but she turned the other jobs down because they involved extra travel or a drop in status and the employee was eventually dismissed. The tribunal held that the dismissal was fair for ‘some other substantial reason’ and that the employer had done what it could to alleviate the injustice suffered by the employee. While the decision in Masini was at Employment Tribunal level only, and therefore not binding law, it provides a useful example of the sort of steps that employers in similar situations should consider taking.
SOSR dismissals are extremely fact-specific (and SOSR can cover a wide range of situations) so legal advice should always be sought in circumstances where a SOSR dismissal is being considered.
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]).