Weekly dilemma: Dismissal of an employee whose husband works for a competitor

One of my senior planning department employees has recently got married. Her new husband works for our fiercest competitor and I am concerned that she may be tempted to disclose our confidential information to him. I have never had a problem with her before but am now afraid that I may have to dismiss her just to protect my business. Would this be fair?

In theory it could be, but in practice, probably not. In addition, following a recent controversial employment tribunal decision, there is also a risk that such a dismissal would be discriminatory.

To make the dismissal as defensible as possible, you would need to show that you had no alternative. This is, after all, someone whom you have had no previous grounds to complain about and whose threat to your business is entirely anticipated and may never actually arise. To show the lack of any alternative to dismissal, you would need to establish, for example, that the employee had access to confidential information that would be seriously damaging to your business if it fell into “enemy hands”. An employment tribunal would expect you to have explored with the employee possible alternative roles in less sensitive positions or with more restricted access to your confidential data (though this is itself not without risk – see below). If you knew pre-marriage what the (now) husband does, did you take any action at that stage? If not, why not?

Do you have any reason, other than the relationship, to consider that your employee may leak your information, such as unresolved grievances or other unhappiness that could leave her vulnerable to blandishments from your competitor? Is the risk of information leakage one way only, or might your competitor be equally nervous about the relationship? Would the remedies of damages and/or an injunction available in the High Court provide an effective right of recourse? If not, why? Do you have any relevant policies about the impact of your employees’ private lives upon their work? Have you had any previous cases of the same sort which create any sort of precedent?

If having considered (and been seen to consider – make notes) all these questions, you genuinely and reasonably conclude that the risk is too great to ignore and that there is no alternative but to dismiss, then you might – just might – be able to persuade a tribunal that this constituted some other substantial reason justifying the dismissal. If the giving of notice followed a fair procedure, particularly consultation with the employee, it could technically be fair.

However, you may run into the issue of unlawful discrimination. Traditional wisdom would say that the action you propose to take is not due to the employee’s marital status generally, but because of who she is married to. If it were someone not working for a competitor you would not dream of doing the same. As to gender, you would say that you would do (and perhaps have done) the same to a male employee in the same position.

Unfortunately for you, the recent Employment Appeal Tribunal (EAT) decision of Dunn v Institute of Cemetery and Crematorium Management EAT/0531/10 suggests that marital status as a protected characteristic is not limited to married or not married, but includes being married to a certain person. Being married to Mr Smith is therefore a different marital status from being married to Mr Jones. On that basis, any action taken against your employee because of whom she is married to risks being unlawful direct discrimination on grounds of marital status. Whatever the commercial imperative you are under, such discrimination cannot be (legally) justified.

There is an additional problem – even just the lack of trust implicit in asking the employee about measures designed to reduce the risk of a damaging leak could lead to a discrimination claim.

The EAT decision is a difficult one for employers, creating all sorts of dilemmas in cases of recruitment, management, remuneration or dismissal where the perception of independence is as important as the reality. Like it or not, however, the short point is that to dismiss your employee on these grounds is legally very risky. You would have to be very convinced indeed that the threat your employee poses, even quite unknowingly, is worth the possible costs.

David Whincup, partner, Squire Sanders Hammonds, London