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What happens if there is third party pressure to dismiss an employee?

Posted on 9th August 2018

In April 2018, Amber Rudd, the then Home Secretary, resigned under pressure about the Windrush scandal and it seems every day in politics there is pressure from outside the government for the Prime Minister, Theresa May, to leave her post. Following recent high profile departures in the Trump administration and possibly pressure on the President himself, it’s worth considering just how lawful is it for an English company in to terminate the contract of an employee because of pressure from outside of the organisation?

Pressure from clients, customers or business partners

It is not uncommon for an employer’s client, customer or business partner to put pressure on an employer to remove an employee from working with them. If it is the case that the employee was, for example, mainly employed to perform duties for the third party, such pressure may persuade the employer to dismiss the employee. This could be a difficult choice. The risk of losing your client or facing litigation from a former employee could mean the stakes are high and potentially costly for your business. However, this reasoning is capable of justifying an employee’s dismissal.

A dismissal of an employee at the request of a third party can potentially be fair provided that the dismissal is justified. Such a dismissal falls within the “catch-all” defence known as the “some other substantial reason” justification.

While this provision appears to use quite broad phraseology to justify dismissing an employee, dismissals justified in this way usually arise from an inability of the employee to perform their duties.

Is this legal to dismiss an employee because of thirds party pressure?

It is long established case law that dismissals due to third-party pressure can potentially be fair. Naturally, an employer must show that he reasonably “bows to the demands of his best customer” (Scott Packing & Warehousing Co Ltd v Paterson [1978] IRLR 166), although the reason for the request was historically not established to be a crucial factor in ascertaining whether the dismissal was fair.

What was important is what impact the denial of the request might have on the employer’s business and relationship with that third party. A dismissal was understandably more likely to be justified if the detrimental impact of refusing the third party’s wishes was greater to the employer.

However, the emphasis appears to have slowly shifted in more recent case decisions. It appears to be the case that now, any injustice to the employee is much more of a relevant consideration (Greenwood v Whiteghyll Plastics Ltd UKEAT/0219/07). On that basis, a dismissal is likely to be unfair if the employee failed to consider whether the dismissal request was justified. In the case of Bancroft v Interserve [2012] UKEAT/0329/12, the Employment Appeal Tribunal determined that a dismissal without investigation or enquiry was likely to be unfair even if the contractual relationship provided for such a dismissal.

Striking the balance and make sure it is reasonable and justified

Bancroft serves to warn employers when considering whether to simply dismiss an employee because their best and the most influential customer wants them to, to have consideration for that employee’s previous conduct, service and ability to find another job as well as to ascertain whether the dismissal request itself was reasonable and justified.

This balance between any injustice to the employee and the business risk to the employer in refusing a third party request should be given proper consideration and particularly more so now in light of Bancroft, if no thought is given to the impact of the decision, the dismissal is likely to be unfair.

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