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Can an employer fairly dismiss an employee due to third party pressure?

I have recently been dealing with a client that had the above dilemma. The company provides a service to third party clients and it was one of these customers that decided that it didn’t want the employee (for ease let’s call him Jim) working on any of his company business.

The incident and the wider implications are too detailed for this column alone and so I shall complete the story in my next post.

In a nutshell, Jim had had an argument with of the customer’s own employees and he had, allegedly, used abusive language. There were no witnesses to this verbal exchange but the customer told my client, in no uncertain terms, that either Jim was removed from all work associated with the customer or the customer would terminate the agreement that he had with my client.

My client couldn’t afford the loss of this contract. So, this begged the question “Where a client demands that a particular employee no longer works on their account, can that employee be fairly dismissed?”

Going back to basics, to dismiss an employee fairly an employer must be able to show that they:

  • Had a potentially fair reason for the dismissal; and
  • Acted reasonably in dismissing the employee for that reason, in the circumstances of the case.

One of the potentially fair reasons for dismissing an employee is for “some other substantial reason” (SOSR). This is a wide catch-all that can encompass pressure from third parties. Interestingly, Employment Tribunals appear to have, thus far, been sympathetic to the concerns of the employer and the third party in these situations.

However, a Tribunal will look at the possible detriment to the employer and the employee and will carry out a balancing act considering the potential injustice to each party in order to decide if the dismissal was reasonable.

To successfully argue SOSR, an employer will need to demonstrate that there was actual pressure applied by the third party. Action cannot be taken in pre-empting a third party’s concerns and the pressure must be more than just a suggestion or request.

Interestingly, the employer does not need to carry out a high level investigation into the claims being made; the more serious and definitive the threat and the more valuable or important the third party, the more likely it is that the employer’s argument will succeed.

The pressure may be due to the standard of work, in which case it may be possible to agree with the third party to try to resolve the issue through performance management. Or, as in the case of Jim, it may simply be an apparent (or obvious) clash of personalities, in which case there will be less scope for avoiding dismissal.

In my next post, I will continue this article by examining the reasonableness of decisions and discussing the appropriate procedure to follow – and we’ll find out what happened to Jim.

“There is evidence to suggest that good HR practice and people management in SMEs are key factors in strong business performance and can lead to increased productivity.”

- CIPD people Skills Project 2017


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