How can I dismiss an employee if the working relationship has broken down?

Dismissing an employee due to a breakdown in the working relationship is a complex process. It requires careful navigation to ensure legal compliance and fairness. This article will explore the legal grounds for dismissal, the necessary procedures, and best practices to mitigate risks.

CIPD surveys carried out in 2020 and 2022 showed that 87% of employees surveyed stated that their relationships between their managers were “very good” or “good” with only 3% describing their relationships as “poor” or “very poor”.  However, a third of workers confirmed experiencing some form of interpersonal conflict, either through an isolated issue, or an ongoing challenging relationship, and 15% of workers reported being bullied over the past three years. Based on the information gathered by these surveys it was estimated that costs of conflict within an organisation is around £28.5 billion each year.

Understanding fair dismissal

In the UK, dismissal must be both substantively and procedurally fair. According to the Employment Rights Act 1996, there are five potentially fair reasons for dismissal:

1. Capability or qualifications
2. Conduct
3. Redundancy
4. Statutory illegality or breach of a statutory restriction
5. Some other substantial reason (SOSR)

A breakdown in the working relationship typically falls under SOSR. It is a flexible and broad category that can justify dismissal when none of the other specific grounds apply. This category is particularly relevant for dismissals stemming from issues that impact the business' functioning but do not fit neatly into misconduct, capability, or redundancy. For SOSR to be valid, the reason must be significant, substantial, and not trivial. We will cover some common scenarios below.

Personality clashes

Persistent personality clashes that disrupt team cohesion and productivity can justify dismissal under SOSR. For instance, if two key employees consistently disagree and this conflict affects the wider team, dismissal may be necessary if other resolution methods fail.

It is important to ensure that employers distinguish the difference between personality and behaviour. In the case of Perkins v St George’s Healthcare NHS Trust 2005, the tribunal had to draw distinction between a genuinely difficult personality, and a personality developed through particular behaviours and interactions with clients and customers. Dismissing someone due to their general personality would be deemed unfair, but it may be justifiable to dismiss someone whose personality has negatively developed due to their behaviour.

Loss of trust and confidence

In certain roles, especially those involving financial responsibilities or sensitive information, a loss of trust and confidence can be a substantial reason. If an employee's actions, even if not amounting to gross misconduct, erode trust to the extent that the working relationship cannot continue, SOSR can be applicable.

The loss of trust and confidence can be from either party. In the case of Matthews v CGI LTD 2024 (read the full case summary here), the employer tried several times to rectify the relationship between themselves and Mr Matthews, but the relationship was deemed irretrievably broken down.

Reputational risks

The reputational risks associated with employee behaviour outside of the workplace, particularly on social media and through criminal activities, are significant. These factors can lead to relationship breakdowns and necessitate dismissal under SOSR.

An extreme example of this is the case of Lafferty v Nuffield Health 2019, a hospital porter with 20 years’ unblemished service was dismissed due to being charged with assault with intent to rape outside of work. Due to the job Mr Lafferty was doing (ferrying anaesthetised patients in and out of operating theatres), the employer felt there was a genuine risk to their reputation should he be convicted.

Steps to ensure a fair SOSR dismissal

When considering a dismissal under SOSR, it is crucial for employers to ensure that the process is fair and legally sound. This involves several key steps to safeguard against potential claims of unfair dismissal and to maintain a fair and transparent process:

• Establishing a genuine and substantial reason. There must be clear justification for the dismissal and not be trivial or biased, you may choose to carry out an impact statement to demonstrate how the issue is affecting the business and team dynamics.
• Following a fair procedure. Employers must be able to show they have followed a fair procedure, that a thorough investigation was carried out, consultations took place, alternatives for employment were considered, hearings and hearing decisions take place where necessary. It is important that these steps are documented.
• Communication. Any written communication to the employee should clearly state the reason for the dismissal, the effective date, and information about notice periods of payment in lieu of notice. Employers should ensure they still are offering the employee the right to appeal the decision.

Dismissing an employee due to a breakdown in the working relationship is a delicate and legally sensitive process. By establishing clear grounds for dismissal, following a fair procedure, and seeking legal advice, employers can manage this challenging situation effectively while minimising legal risks. Seeking legal advice throughout this process is advisable to navigate the complexities and safeguard against tribunal claims.

If you have any questions about dismissing an employee in these circumstances, our Peace of Mind Team can provide specific advice and our Document Audit Team can help draft relevant policies. Contact our employment law team by emailing employment@warnergoodman.co.uk or by calling 023 8071 7717.