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Can an employer fairly dismiss an employee due to third-party pressure? Part 2

In the previous HR Knowledge Base article we looked at a real life example of potential dismissal due to third-party pressure and, in particular, what constitutes a ‘potentially fair reason for dismissal’.

The incident involved a client that provides a service to third party clients and it was one of these customers that decided that it didn’t want the employee (we called him Jim) working on any of his company business.

Jim had had an argument with one 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.

In the last srticle, we discussed using ‘some other substantial reason’ (SOSR) as a fair reason for dismissal. We will look specifically at Jim shortly, but for now we will assume that dismissal took place and that the employee took his case to an Employment Tribunal.

The first thing that the Tribunal will look to do is to establish that third-party pressure had been applied and once this has been determined, it will then consider the extent of injustice to the employee and how the employer sought to relieve it. It is likely that the Tribunal will look at:

  • The employee’s own conduct
  • Whether the employee’s, the employer’s and third-party’s respective contracts expressly allow for these circumstances
  • The effect on the employer’s business if the threat from the third-party was ignored
  • Whether the employer considered an alternative role for the employee
  • What steps the employer took to try to find a compromise with the client.

It is particularly important that employers can show that they have at least considered the potential injustice to the employee and that they can demonstrate the steps they have taken to try to alleviate the situation prior to dismissal.

The employer should always explain the situation to the employee and try and explore alternatives to dismissal both with the third-party and, more importantly, within their own business.

There are two cases worth looking at – Henderson v Connect (South Tyneside) and Ezsias v North Glamorgan NHS Trust.

The usual procedural fairness considerations will still apply to dismissals for SOSR. Employers should warn and consult with the employee to the extent that this is possible and, importantly, they must show that they have considered alternatives to dismissal. The size and resources of the employer will be relevant to these considerations: a larger employer may, for example, have more scope to re-deploy the individual to another account.

As for Jim? Well, my client was fortunate to have attained a new customer at the time that we were discussing the options for Jim. Having fully investigated and satisfied ourselves that Jim was the innocent party in the issue, he was re-deployed to the new account and, twelve months on, is working well and, indeed, receiving due praise from the customer. The client retained the exiting account so, in this instance, we had a ‘win/win’ situation.

But do beware, fortune does not always fall in this way and absolute care needs to be used in handing case of third-party pressure. Always treat in the same way as you would an in-house issue and most importantly:

  • Keep a full paper trail of all communications and discussions;
  • Discuss the issues at length with the third-party;
  • Consider alternatives to dismissal;
  • Seek advice before effecting a dismissal.

“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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