Ten tips on what to do when employees’ behaviour outside work puts the organisation’s reputation at risk

Employment lawyer Stephen Hall offers advice on how to deal with employee relationships outside work that may compromise employers.

While employers generally treat employees based on their behaviour at work, what happens outside of the office can be equally important. What can you do, for example, if one of your employees marries someone with extreme racial views? Or if their Facebook account shows them keeping unsavoury company? How far can employers go to protect against the adverse associations of their employees?

Courts have treated cases quite differently so far. In some cases, employers have been justified in dismissing employees for the company they keep. In the 2011 case of S v P Nursery Ltd, for example, the employment tribunal agreed that the employer was justified in dismissing an employee whose husband had been charged with child pornography, as it was necessary to protect the nursery’s reputation.

However, earlier this year, a tribunal in Governing Body of Tubbenden Primary School v Sylvester held that it was not fair to dismiss a teacher for maintaining a friendship with a fellow teacher who was arrested on criminal charges. Although there was a breakdown in the relationship between the school and the teacher over this friendship (which may have otherwise justified the dismissal), the school had not followed a proper procedure in respect of it.

What can an employer do?

What an employer can do will therefore depend on the specific facts.

Here are 10 top tips on what to consider when you suspect your employees may be “guilty by association”:

1 Think about your main concern. Is it, for example, your organisation’s reputation, loss of a specific client, or health and safety worries for other staff? Concerns over your accounts clerk married to a convicted fraudster will be one thing; concerns over a footballer’s father being guilty of drug dealing will be another.

2 Consider how serious the breach is. Any disciplinary action should be proportionate to the concern and the association. Is it something that can be dealt with informally by a quiet word, or is the issue so serious that you cannot afford to have the employee continue in the business?

3 If concerned about reputational damage to the business, assess any evidence of damage. The difference between any actual damage versus any potential damage is important. For example, an employee dating the competitor of a key client may not cause any actual damage to your client relationship – your main worry will be the potential repercussions if the client finds out. Where an employer can show that an employee’s association has had a real impact on its sales or public perception, it will likely be a lot easier to justify disciplinary action. If however, the association only risks a negative impact, more caution will be needed.

4 Check the company’s policies. Does the staff handbook talk about your specific concern and what you can do to protect it? It will be important to follow any procedures referred to.

5 Check the employee’s employment contract. Are there any specific provisions regarding the concern and/or right to dismiss in the case of any breach? For example, they may be a salesperson, or PR executive, where a key part of their contractual duties is to promote the company’s reputation.

6 How senior is the employee? Ordinary workers have a basic obligation to act with trust and loyalty towards their employer. Senior and executive employees often have higher obligations which they owe – including an obligation not to put themselves in a position of actual or potential conflict with their employer. It is obvious, for example, that how you expect your managing director to conduct himself outside of work is usually more stringent than what you would expect of your receptionist.

7 Ask if the employee is “at fault” for the association. Have they initiated it or did it happen by chance? Could they have done anything to prevent the association? It may not be fair, for example, to “blame” the employee for what their family members do – but it may be legitimate to expect them to keep a professional distance from unsavoury acquaintances.

8 Beware of discrimination. Give careful thought as to whether the association might be protected by discrimination laws. For example, in the 2011 case of Hawkins v Atex Group Ltd and others, the employee tried to argue that the reason for her dismissal was because she was married to the employer’s departing chief executive – treatment on the grounds of someone’s marital or civil partnership status being unlawful discrimination. She was unsuccessful only because the employer was able to show that it dismissed her not because she was married to him by itself, but because of her “close personal relationship” with him, which existed regardless of whether she was married to him or not.

9 Listen to the employee’s defence. Before you take any disciplinary action, it is absolutely essential to give the employee a chance to comment. What they say in their defence might be the deciding factor between a first warning and dismissal. An employee who agrees that the association is inappropriate and takes steps to resolve your concerns is much more likely to show that any dismissal was unfair, compared with an employee who continues to flout the relationship without remorse.

10 Above all, be consistent. Tribunals are much more likely to approve an employer’s decision if there is a consistent pattern of how it deals with issues. Remember that an employer does not need to show that its decision was the only objectively right one. It just needs to show that its decision was within a band of reasonable responses. If it can show that it has dealt with the issue fairly and in accordance with company policy, it is much more likely to get a favourable outcome if a matter goes to court.

Stephen Hall is an associate in the employment department of SJ Berwin LLP

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