Some Other Substantial Reason (SOSR) Dismissals

There are five potentially fair reasons for dismissal under the Employment Rights Act 1996 (“ERA 1996”): conduct; capability; redundancy; breach of a statutory restriction; and "some other substantial reason of a kind as to justify the dismissal” (“SOSR”).  It is the latter which has long caused headaches amongst employers and legal advisors alike, not least because of a lack of certainty over when it should be relied upon as a reason for dismissal. 

Lara Feghali looks further at this issue, paying particular attention to a recent case which itself focused heavily on case law on using SOSR in cases where there has been a breakdown in trust and confidence between the parties.

Background

SOSR has long been thought of a ‘catch-all’ provision; one which is often relied upon when the reason for the dismissal of an employee does not fit squarely within any of the other four, more prescribed, reasons.  Unfortunately, however, the term is not defined by statute and nor is there any statutory guidance on what it encompasses; rather, it has been left to case law to help determine what reasons can be relied on under the SOSR heading. This has included a breakdown in trust and confidence between employee and employer (and, in some circumstances, relevant third parties); business reorganisation (short of redundancy); refusal to accept changes to terms and conditions; protection from competition; personality clashes; and expiry of limited-term contracts. 

Despite this list of reasons for potential SOSR dismissals, the use of it is relatively limited, not least because it can be regarded with some suspicion in the courts.  Much has been said in case law about the “risk” of employers to using SOSR as a pretext to conceal a real conduct reason behind a dismissal.  It has long been established that where the facts of a case fairly fall within one of the other reasons, as listed above, they cannot simultaneously be SOSR because, by definition, SOSR is some other substantial reason.

The most commonly relied on SOSR is that of a loss of trust and confidence and this reason has been reviewed more than any other in the employment tribunals; the recently published case of the Governing Body of Tubbenden Primary School v Sylvester adds to the decisions of Perkin v St George’s Healthcare NHS Trust, McAdie v Royal Bank of Scotland and Ezsias v North Glamorgan NHS Trust in relation to SOSR dismissals on the basis of lost confidence.

Governing Body of Tubbenden Primary School v Sylvester

The recent case of Governing Body of Tubbenden Primary School v Sylvester, in which judgment was published earlier this month, explores the reasonableness of a SOSR dismissal for breakdown in trust and confidence between the dismissed teacher and the headteacher.  In particular the EAT considered whether it had been open to a tribunal, when considering the reasonableness of the dismissal, to take into account not only the fact of the breakdown but also the causes of it and the surrounding circumstances.

Mrs Sylvester (the deputy headteacher) maintained a friendship with another teacher who had been recently suspended from the same school following an arrest for having indecent images of children on his computer, despite being instructed not to get in touch with him by the headteacher.  Initially the education authority met with Mrs Sylvester and concluded that no action should be taken against her for maintaining that friendship but later, when parents expressed concerns, she was disciplined and dismissed a result of her continued friendship with him. 

The reasons given by the school were that her continuing friendship was affecting the school's reputation; the friendship presented a safeguarding risk to the school's pupils; and her actions had led to a breakdown in trust and confidence between her and the headteacher, rendering her continued employment untenable. Following an internal appeal, the first two (misconduct) grounds were dropped but the dismissal was upheld for third reason and the school argued the dismissal was for a SOSR reason.

Whilst the Tribunal agreed that this had been an SOSR dismissal (for a breakdown in trust and confidence) they went on to find that it was unfair in the circumstances.  This was because: the education authority and school had tacitly approved of Mrs Sylvester continuing her friendship with the dismissed colleague; the headteacher had taken no steps to inform Mrs Sylvester of parents' concerns, and he did not warn her of the potential consequences of her continuing her friendship following those concerns. There was little material on which the headteacher could reasonably have concluded that his trust and confidence in Mrs Sylvester had been undermined and, in fact, the greatest damage to the relationship arose from his decision to suspend Mrs Sylvester and the procedures that were adopted thereafter.

The school appealed to the EAT on the basis that, in an SOSR dismissal case for loss of confidence the ET was not entitled to look at the cause of that loss and should just be restricted to the fact of it.  In other words, the remit of the ET in reaching their decision should be specifically limited.

In putting forward their arguments, the school referred to the key case law on this issue, including:

• Ezsias v North Glamorgan NHS Trust; in this 2011 case the EAT upheld an ET’s decision that the dismissal of Mr Ezsias because of a breakdown in relationships at work, even though he was largely to blame for that breakdown, was for SOSR rather than misconduct. The EAT upheld "the refined but important distinction between dismissing Mr Ezsias for his conduct in causing the breakdown of relationships and dismissing him for the fact that those relationships had broken down".
• McAdie v Royal Bank of Scotland; in 2007 the Court of Appeal held that an employer could fairly dismiss an employee for ill-health capability despite the fact that the employee's stress-related illness was attributed to the conduct of the employer.  Although a dismissal for ill-health, an analogy was put forward by the school that an SOSR dismissal for complete loss of confidence could be fair regardless of the circumstances that caused that loss of confidence.
• Perkin v St George’s Healthcare NHS Trust; a senior director in an NHS Trust was dismissed for behaviour which gave rise to a breakdown in relationships with staff and senior managers (e.g. making attacks on colleagues’ honesty, financial probity and integrity). On appeal, Mr Perkin argued that the ET had applied the wrong test of fairness, by characterising his dismissal as being for conduct, rather than SOSR.
  
  They had applied the test in British Home Stores v Burchell, which is a test for misconduct dismissals. Whilst the Court of Appeal agreed that it was in fact a SOSR case (“an employee in a senior position who could not or would not work harmoniously with colleagues and outsiders with whom a harmonious relationship was essential.”) and also agreed that Burchell was a conduct case, they held that there was no reason why the principles it set out should be limited to “conduct” cases only – they could, in appropriate instances (of which Perkin was one), apply also to dismissals for SOSR.

However, the EAT rejected the school’s argument and held that a broader view should be taken in SOSR cases.  They held that where the SOSR for dismissal relied on was "a consequence of conduct, there is such a clear analogy to a dismissal for conduct itself that it seems to us entirely appropriate that a Tribunal should have regard to the immediate history leading up to the dismissal”.  The immediate history in this case included the teacher's suspension for doing something that the school had previously condoned, the lack of warnings given to her, and the procedure by which the decision to dismiss her was reached. The relevance of this could not inevitably be “trumped” by the tribunal's conclusion that a loss of trust and confidence had occurred.

Conclusion

In reaching their decision and giving regard to the previous case law on this issue, the EAT made it clear that when looking at case authorities context is extremely important.  On that basis it casts some uncertainty on how far an employer should seek to rely on previous case law when choosing to rely on SOSR as a reason for dismissal.

Importantly, whilst the EAT’s decision does not mean that in every SOSR case involving a breakdown of trust and confidence the tribunal must consider how that situation arose, it did make it clear that they are entitled, and indeed obliged, to take into account the circumstances, immediate history and substantial merits of each case where the SOSR reason ultimately stems from the conduct of the employee.  Tribunals are not confined simply to identifying whether there is SOSR and looking no further into the matter.

In this sense, the decision aligns with what was held in McAdie; although a capability case, the EAT accepted that "there must be cases where the fact that the employer is in one sense or another responsible for an employee's incapacity is, as a matter of common sense and common fairness, relevant to whether, and if so when, it is reasonable to dismiss him for that incapacity".