Dismissing fairly after a request from a third party

In an intensely competitive commercial environment it is a real challenge winning and retaining clients and ensuring that they are satisfied with the service you provide. Sometimes a client (perhaps an important one) expresses an objection – warranted or not – to a member of your team delivering the service.

The situation may be a commercial “no brainer”, but requests like this ultimately can lead to the employee being dismissed and have given rise to a number of employment tribunal claims. Eric Gilligan and Peter McKorkell of Brodies LLP look at when “third-party pressure” dismissals can be unfair.

The actions of a reasonable employer

The position may appear straightforward. Quite apart from the need to keep the client happy, they may have an express contractual right to require, or at least request, removal of your employee. Your client requests your employee’s removal and won’t agree to have them back. You have no other positions available so you’re left with no option but to dismiss. Surely these are the actions of a reasonable employer in the circumstances, even if the client’s request is unreasonable?

This was the view of the Employment Appeal Tribunal (EAT) in one of the earliest third party pressure cases, Scott Packing & Warehousing Co Ltd v Paterson [1978]. The EAT commented that, “An employer cannot be held to have acted unreasonably if he bows to the demands of his best customer…even if the customer’s motive for seeking the removal of the employee was suspect.”

Injustice to the employee

The later case of Dobie v Burns International Security Services (UK) Ltd [1984] held that for a dismissal to be fair the employer that receives a request to remove an employee must consider whether there is any “injustice” to the employee, and that the extent of that injustice will be a “very important factor”. The EAT identified that such factors could include the employee’s length of service, whether there have been any previous issues with the employee and how easily the employee will find alternative employment if they are dismissed.

Later cases have held that, even if there is injustice to the employee, a dismissal can still be fair if an employer has taken steps to avoid or mitigate the injustice; usually by trying to get the third party to change their mind and, if that doesn’t work, looking for alternative jobs for the employee. In one of the most recent decisions, Henderson v Connect (South Tyneside) Ltd [2009], the EAT commented that, if there was a clear injustice to the employee, the employer would be expected “to pull out all the stops” to try to mitigate the injustice.

Investigating and challenging the objection

Employers should therefore make genuine attempts to investigate the basis for the objection and where appropriate to challenge this and to try to get the third party to change its mind. It is also advisable to record these attempts in writing so the employer has clear evidence of its efforts. Employers, however, will not be expected to jeopardise an important commercial relationship in the face of sustained objection, although the tribunal will require clear evidence that the relationship was genuinely at risk of damage.

Each case will depend on its facts, and in some situations it may be reasonable for an employer to challenge the request at a higher level of management. In Martin v JFX Express [2004], however, an employer’s failure to do this did not make the dismissal unfair.

Alternative roles for the employee

If the attempts to change the third party’s mind prove unsuccessful, the employer should give serious consideration to any possible alternative roles the employee could assume. In practice, for the employer to act reasonably, this is likely to involve some creative thinking, and more than a quick glance at the current vacancies. An employer may be expected to reorganise its business or offer a swap with another employee (Greenwood v Whiteghyll Plastics [2007]).

In the recent case of Bancroft v Interserve (Facilities Management) Ltd [2013], the EAT suggested that an employer could also be acting unreasonably if it fails to deal with a problem between an employee and a third party at an earlier stage. Employers would therefore be wise not to ignore a bubbling tension between a client and an employee.

Mitigating the injustice

In summary, employers should be aware that they cannot simply dismiss an employee following a removal request by a third party and assume that is the end of the matter. Tribunals will consider any failures to mitigate the injustice to an employee and, in appropriate cases, will be looking for employers to show that they pulled out all the stops to avoid dismissal.

Eric Gilligan and Peter McCorkell are respectively a Partner and Senior Solicitor in the Employment, Pensions & Benefits team of Brodies LLP.