Employees bringing their company into disrepute: what you need to know

Recent news stories involving footballers Ashley Cole and John Terry (pictured below) have raised the issue of when and to what extent an employer is entitled to legitimately say that events in the private lives of employees are relevant to their employment.

On the face of it, Cole and Terry’s indiscretions appeared similar, with both having had extra-marital affairs. But their employer, Chelsea Football Club, took a much stricter approach with Cole, whose affair took place during work time – on a club tour to the United States. Terry’s affair, on the other hand, was considered by Chelsea to be a private matter, and therefore did not warrant disciplinary action.

Warning!

This article was originally published on 31 March 2010 and is not updated.

XpertHR provides up-to-date guidance on dismissal, including the potentially fair reasons for dismissal.

So where should employers draw the line between employees’ work time and their private lives?

Difficulties employers can face

Contracts of employment often contain express provisions allowing employers to terminate an employee should their conduct outside work bring the employer into disrepute. But employers should proceed with caution when classing conduct outside work as a disciplinary offence.

Two other high-profile news stories highlight the difficulties employers can face. Both involved female employees being engaged in out-of-work activities that were sexual in nature. One of the employees was an airline stewardess who was also an actress in the pornographic film industry. The other was a primary school teacher who posed for photographs featured on a website for glamour models. Although both individuals were allowed to keep their jobs, their employers’ reactions were very different.

In the first case, the airline simply said whatever its employees do in their spare time is their business, and no action was taken. In the second case, however, the teacher was subjected to the school’s disciplinary procedure. The school concluded the teacher’s conduct was inappropriate in light of her role, and agreed she had brought the school into disrepute. Although not dismissed, she was disciplined. The school did note, however, that the matter would have been treated even more seriously had the photographs been pornographic in nature.

What is clear is that employers should not instigate disciplinary proceedings based only on their personal disapproval of an employee’s out-of-work behaviour. To do so could expose employers to claims of discrimination and/or unfair dismissal.

Disciplinary process

Employers should ensure they follow any contractual disciplinary procedures in place to avoid exposing themselves to claims for breach of contract. When implementing either contractual or non-contractual procedures, a failure by the employer to meet the minimum standards set out in the Acas code of practice on disciplinary and grievances may result in a tribunal adjusting any unfair dismissal compensation awarded to a claimant by up to 25% (although overall any such award is still subject to the statutory maximum cap – currently £65,300).

Things to consider in any disciplinary action

1. Always carry out an appropriate investigation. It should be carried out by someone who will not conduct any subsequent disciplinary hearing.

2. Employers can suspend an employee, on full pay, while an investigation is undertaken, although any period of suspension should be as brief as possible and kept under constant review.

3. A decision to suspend an employee should not be an automatic reaction to a disciplinary issue. The employer should consider whether suspension is appropriate in the circumstances, given the consequences for the employee of being out of the workplace, and the potential damage to the employee’s reputation. Thoughtless and unnecessary suspension could be in breach of the implied term of trust and confidence.

4. If necessary, the employee should be invited, in writing, to a disciplinary hearing, and should be given sufficient time to prepare their case – usually no less than 48 hours. The employee should also be informed of the basis of the allegations and provided with any evidence collected.

5. Where the hearing could result in disciplinary action, the employee has a right to be accompanied by a fellow worker or trade union representative (irrespective of whether the employer recognises any trade union).

6. At the hearing, the employee should be given an opportunity to respond to all the allegations and be allowed to comment on all the evidence collected.

7. After the meeting, the employer should decide what, if any, disciplinary action is appropriate. The employee should be notified of the decision in writing without unreasonable delay.

8. Suspension should not be used as a disciplinary sanction unless the employer has an express contractual right to do so. Any such power is subject to an implied term that it must be exercised on reasonable grounds. To suspend without authority exposes the employer to claims for breach of contract, which could invalidate post-termination restrictions.

9. If misconduct or poor performance is established, a dismissal would usually only be appropriate if there have been prior written warnings. Gross misconduct can justify dismissal for a first offence.

10. The employee should be given the right to appeal a disciplinary decision. Any appeal should be heard without delay and not by anyone involved in previous stages of the process. The appeal should be heard by someone more senior than the individual who made the disciplinary decision.

Employers should, therefore, be aware that employees’ conduct outside work can result in disciplinary action. However, as with all disciplinaries, employers must ensure that any disciplinary action taken is consistent, and a fair process is followed.

by Paul Reeves, partner, and Ben Brown, associate, Stephenson Harwood

Pay v United Kingdom

In the 2003 case of Pay v United Kingdom, the European Court of Human Rights (ECHR) confirmed employers may legitimately have regard to aspects of an employee’s life away from the workplace, provided they are relevant to the employee’s role or injurious to the employer’s reputation.

Pay was employed by the Lancashire Probation Service to deal with sex offenders. But it came to light that, outside work, he was involved in bondage, domination and sadomasochistic performances. Pay was sacked, and ultimately took his case to the ECHR.

In dismissing Pay’s case, the ECHR took into account the nature of his role; his relationship with the offenders with whom he worked; the need for public confidence to be maintained; and, most importantly, the potential damage to his employer’s reputation.

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