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Get rid of her! Dismissals at the request of a third party

Government pressure for the founder of Britain’s most high profile children’s charity to stand down as Chief Executive illustrates the weight that third party pressure plays in making dismissal decisions within the work place.

Government officials have apparently been increasingly concerned about the way ‘Kids Company’, which specialises in support for vulnerable and deprived children, has been run by Camila Batmanghelidjh who founded the charity in 1996. This had led to pressure on the charity to find itself a new Chief Executive or face losing the Government’s £5 million annual funding on which it heavily relies. The revelation that the Government would be withholding public funding from the charity and a great deal of adverse press coverage, resulted in the announcement of Camila’s planned resignation as Chief Executive after nearly 20 years.

Under Section 98 of the Employment Rights Act 1998 employers have five potential fair reasons for dismissal: (1) conduct; (2) capability; (3) redundancy; (4) breach of statutory restriction; and (5) “some other substantial reason of a kind as to justify the dismissal” (SOSR).

The SOSR provision allows employers to carry out a fair dismissal in circumstances outside the other more rigid reasons. In an intensely competitive commercial environment it is a real challenge keeping clients, investors and key stakeholders happy and ensuring that they are satisfied both with the service you provide and the way the organisation is managed. Tribunals have therefore come to recognise pressure from third parties as a potentially fair reason for dismissing an employee under the SOSR provision. In the early case of Scott Packing & Warehousing Co Ltd v Paterson [1978] the EAT commented that, “An employer cannot be held to have acted unreasonably if he bows to the demands of his best customer…even if the customer’s motive for seeking the removal of the employee was suspect”.

However, Grootcon (UK) v Keld [1984]  stressed that the requirements of the two-stage statutory test must still be satisfied. Firstly, the employer must prove that the SOSR was the main reason for the dismissal and secondly, that the decision was reasonable in all the circumstances.

Employers will not be expected to jeopardise an important commercial relationship in the face of sustained objection. However, Dobie v Burns International Security Services (UK) Ltd [1984] held that for a dismissal to be fair and fall within the SOSR provision, the employer must consider whether there is any “injustice” to the employee. An injustice argument would be much less sustainable if the employee’s contract provided that a third party might request his dismissal. Henderson v Connect (South Tyneside) Ltd [2010] illustrates that employers should make genuine attempts to investigate the basis for the objection and where appropriate try to get the third party to change its mind or consider whether they have alternative work before concluding that the dismissal is necessary.

The case law indicates that the reason for the third party’s request is largely irrelevant. Common reasons are alleged misconduct, poor performance, and friction between the employee and the third party or its employees. Growing concerns over the finances of the Kids Company charity and the allegedly chaotic manner in which it was being run, were reasons behind the Government’s call for Camila to stand down as Chief Executive. In this case it seems that she has agreed to stand down, but the heavy reliance placed on public funding means that the charity could have taken steps to remove her in response to the pressure being placed on it by the Government and the resulting adverse press coverage, had it chosen to do so.

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further