Some other substantial reason as a fair reason for dismissal

There are five potentially fair reasons to dismiss an employee as set out under the Employment Rights Act 1996. These are:

1. Conduct
2. Capability
3. Illegality
4. Redundancy
5. Some other substantial reason (SOSR)

This article explores some other substantial reason (‘SOSR’) as a fair reason for dismissal. It is a term used for a wide variety of other situations and designed to catch potentially fair dismissals that do not fall into any of the other categories listed above. This generally will involve situations where business needs necessitate a dismissal. It can not be used for dismissals that would be deemed to be automatically unfair, including for example, being pregnant, on maternity leave, making a request for flexible working or whistleblowing.

Examples of what would constitute SOSR

Refusal to accept changes to terms and conditions

Refusal to accept the terms and condition may constitute a SOSR. An employee is however entitled to resist changes and where the change amounts to a fundamental breach of the terms then the employee may resign and claim unfair constructive dismissal.

Protection from competition

A breach of an express or implied duty not to compete will be a conduct issue but where the employee falls short of a breach, the employee may be dismissed by SOSR. The employer must show that the employee will give rise to a real commercial risk if they remain in employment.

Personality clashes

The conflict between employees would need to be causing substantial disruption to the business. An employer is expected to take reasonable steps to solve the problem without dismissal, for example changing work patterns or attempting to mediate.

Pressure from third parties

Where a third party requires an employee’s dismissal, this may be regarded as fair for SOSR. What will be relevant is how important the third party’s continued business is to the employer.

Expiry of fixed term contract

Where an employee has accrued the qualifying service necessary to bring a claim for unfair dismissal, an employer may be able to rely on non-renewal of a fixed term contract, as an SOSR. An employer should inform the employee that they are employed on a temporary basis for a particular period or job.

Procedure

An employer must follow the correct procedure when fairly dismissing an employee as an employee with more than 2 years’ service has the right not to be unfairly dismissed.

An employer must show that they balanced the commercial needs of the business against the detriment to employees. You should warn the employees and consult them. An employer should consider alternative suggestions by staff and alternative work should be offered where possible.

Finally, an employer must consider whether dismissal is a proportionate response to the issue or whether there is a more appropriate response. Employer should be aware that when an employee is dismissed for SOSR, they are generally entitled to receive full pay for the length of their notice.

Awards

If the correct procedure is not followed, an employee may issue a claim for unfair dismissal. Should that claim be successful, the employee will be entitled to compensation made up of a basic award and compensatory award.

The basis aware is calculated as follows:  

The tribunal may make a compensatory award having regard to the loss sustained as a result of the dismissal. An employee is under a duty to mitigate their losses. The maximum compensation is the lower of 52 weeks gross pay or £105,707.

If you are thinking of dismissing and employee for a reason which do not squarely fall within the other four potentially fair reasons, we recommend you take advice at an early stage to avoid being faced with a unfair dismissal claim and which may result in substantial compensation being awarded.

How Pinney Talfourd can help

If you are thinking of dismissing and employee for a reason which do not squarely fall within the other four potentially fair reasons, we recommend you take advice at an early stage to avoid being faced with a unfair dismissal claim and which may result in substantial compensation being awarded.

Please do not hesitate to contact one of our specialist employment lawyers, who will be able to offer you the best possible advice to help you legally navigate through any employment disputes.