For the most part, employees’ work and personal lives coexist harmoniously side by side. However, there are occasions when an employee’s behaviour or conduct outside of work may be considered to be sufficiently unacceptable to be damaging to the employer’s own reputation.
In such situations, the employee can be said to be bringing the company into disrepute, which may give the employer legal cause to take disciplinary action.
In reality, it can be difficult for employers to ‘draw the line’ between their employee’s work and private lives, and recognising when they can lawfully reprimand an employee for something they have done outside of work.
An employer will need to exercise great care when dealing with an allegation of bringing the company into disrepute and proceed with caution when considering whether conduct or behaviour outside the workplace amounts to a disciplinary offence.
Examples of bringing a company into disrepute
Social media can present a reputational minefield for employers, with a high risk of employees bringing the company into disrepute through flippant or imprudent posts or comments on social media sites such as Facebook or Twitter.
In a case from 2010, Preece v JD Wetherspoons plc, the claimant employee managed a Wetherspoons pub and was regularly subjected to abuse from two customers. She also received numerous abusive telephone calls from a daughter of one of the customers. During a shift, the claimant posted derogatory comments about one of the customers on Facebook, mistakenly believing only fifty of her six hundred friends could see them.
The customer’s daughter saw the comments and complained to Wetherspoons.
Following disciplinary proceedings, the claimant was dismissed on the basis that she had brought the company into disrepute, breaching its internet policy and duty of trust and confidence. An employment tribunal found the decision to dismiss her was within the range of equitable responses available to Wetherspoons and her dismissal was fair and justified.
In another case from 2010, Benning v British Airways the claimant posted disparaging remarks about a colleague on YouTube. The employment tribunal found that British Airways decision to dismiss the employee was fair.
Employee sexual misconduct is another common source of disrepute.
For example, a professional footballer was caught having an affair. It was widely reported by the print media and was regarded to have brought his club into disrepute as it happened whilst representing the club abroad on a foreign tour. It was found that while the employer may object to an employee’s behaviour outside the workplace, it will not be enough in and of itself to successfully discipline or dismiss an employee on the basis they had brought the company into disrepute. To do so exposes the organisation to a claim of discrimination or unfair dismissal.
In 2003, the European Court of Human Rights (ECHR) found in favour of an employer after a probation officer was dismissed following allegations of involvement in sado-masochistic activities. The employee argued that his dismissal was a breach of his privacy under the ECHR, however, the court held that the interference into his right to privacy (Article 8 rights) was justified given the sensitive nature of his work with sex offenders.
Social media and sexual misconduct are just two examples of behaviour that impacts on employment. Each case should be treated on its own merit and facts, and the conduct of the employee in question must be carefully balanced against the role that employee is employed to do. The gravity of the conduct may be magnified when the employee involved is a senior person, but the fallout can be just as damaging with junior employees if the incident has been widely publicised. It is therefore crucial that you follow a thorough and fair investigation procedure as the basis of any disciplinary action.
What should an employer do if an employee is suspected to have brought the company into disrepute?
As with all issues that may result in disciplinary action, a fair and timely investigation should be conducted into the alleged conduct.
If there is a clause within the employee’s contract of employment regarding bringing the company into disrepute, you should follow the contractual provisions, ensuring you comply with your formal disciplinary procedures and grievance policies.
Failure to follow a fair procedure can result in legal action, including tribunal claims, and can give cause for breach of contract claims, where the implied term of mutual trust and confidence has been breached.
Whether you are implementing contractual or non-contractual disciplinary and grievance procedures, you should meet the minimum standards set out in the ACAS code of practice as failure to do so may result in a claim for unfair dismissal and an uplift in any compensation award for failure to comply with the guidance.
Even where an employee faces criminal charges or has been convicted of a criminal offence which is not work-related, does not mean you can go straight to dismissal. The Advisory, Conciliation and Arbitration Service (ACAS) code states:
“If an employee is charged with or convicted of a criminal offence this is not normally in itself reason for disciplinary action. Consideration needs to be given to what effect the charge or conviction has on … their relationship with their employer.”
Investigate the allegations
Undertake a full investigation. You should gather sufficient evidence and speak to any witnesses.
You will need to establish if the behaviour in question has directly affected your business reputation and gather evidence to support this. Has the behaviour elicited any complaints from customers, clients or other members of staff?
The investigation must be fair and objective. The person leading the investigation should not let their personal opinions of the conduct influence the investigation or the outcome. As such, it is generally advisable that the person conducting the investigation is not directly involved with the issue or the employee subject to the proceedings. This would usually mean a member of the HR team, a senior manager from a different department, or engaging an external investigator.
Following the investigation stage, a formal hearing should be held to present the evidence to the employee and to allow them to respond to the allegations.
The employee should be provided with all the evidence against them in advance of the hearing. If dismissal is a potential sanction, they should be advised of this before the hearing.
A decision should then be made promptly following the hearing.
If the investigation and hearing findings show the employee’s conduct has had a detrimental impact on the organisation, this may be grounds to take disciplinary action.
When informing the employee of the outcome, it is essential to explain how their behaviour has brought the company into disrepute and give them the right to appeal should they have any additional or new evidence at their disposal which may assist their case.
Can you suspend an employee facing allegations of bringing a company into disrepute?
Suspending the employee is an option, but employers should proceed with caution.
Unless there is an explicit term within the employee’s contract of employment, suspension should not be used as a disciplinary sanction. Even in cases of express contractual right, an employer must exercise it on reasonable grounds. Where an employer suspends the employee without the necessary authority, it exposes the employer to a claim for breach of contract.
Since a fair decision on the allegations cannot be made until after the investigation has concluded, it should be made clear that suspension in these circumstances is not a disciplinary sanction, but instead is to allow a full and fair investigation to be carried out. This is particularly important where the employee’s presence may disrupt or impede the integrity of the investigation.
You should consider whether, in all the circumstances, suspension is appropriate and the potential impact this may have on the employee’s reputation. A ‘knee-jerk’ suspension may be in breach of the implied term of trust and confidence.
Any suspension must be on full pay. The suspension period should be kept as brief as possible and kept under review.
Possible disciplinary sanctions
In cases where an employee is found to have brought the company into disrepute, disciplinary action ordinarily follows. The outcome should depend on the facts of the matter, considering all the circumstances of the case. Factors such as the employee’s previous conduct record and the severity and nature of the conduct will determine the options.
Action could include issuing a warning, suspension for a period of time (allowing for contractual obligations) or dismissal.
Where a warning has been issued or a decision to terminate the employee’s contract has been made, the employee has a right of appeal and should be notified of the procedure to exercise this right.
How can employers reduce the risk of damage to their reputation?
Prevention is better than cure. To minimise the risk of employees’ bringing the company into disrepute it is worthwhile reviewing internal policies to ensure they are clear and effective in setting out the standards expected of all employees, and the potential sanctions they face where they are proven to have fallen below these expectations.
Internal documented guidelines and staff training can help to address risk in specific areas, such as social media use and sexual harassment. Provide examples within the staff handbook of behaviour or conduct that will not be tolerated and can result in disciplinary action.
By providing practical advice on what is expected and what will not be tolerated, organisations can help to avoid issues of disrepute that may culminate in disciplinary action and possible dismissal. For example, social media guidelines could include issues of employees identifying the company in personal blogs, posting inappropriate images, making derogatory or defamatory statements, or criticising the company, and how this applies inside and outside the work hours and activity.
Also ensure contracts of employment include specific provisions which allow the organisation to terminate or dismiss employees whose behaviour outside of the workplace brings the company into disrepute.
DavidsonMorris’ employment lawyers bring particular expertise in dealing with complex, sensitive disciplinary matters involving reputational risk. As well as advising on specific cases, we can review HR policies and processes to ensure they are effective in reducing the risk of conduct issues and provide a compliant and robust framework for dealing with conduct and disrepute issues, while minimising the risk of tribunal claims. Contact our experts for advice.
Bringing the company into disrepute
What does bringing a company into disrepute mean?
If an employee's out of work conduct potentially damages a company's reputation then this is termed as bringing a company into disrepute. There are rare occasions when an employee's behaviour or conduct is so offensive it can bring their employer down with them. It is situations such as this that can be described as bringing the company into disrepute.
Can you dismiss someone for bringing company into disrepute?
Providing you have proven during the course of your investigation into the allegation that the behaviour has brought the company into disrepute, and you have followed your company's disciplinary and grievance procedures, then you can proceed to dismissal. It is critical to give the employee a right to appeal, this is particularly important where new or additional evidence has come to light which supports the employee's case.
What are examples of gross misconduct?
What constitutes gross misconduct varies from employer to employer. It will ordinarily include behaviour such as physical violence, sexual misconduct, theft, gross negligence and serious insubordination. It can also include cases where the employee brings a company into disrepute. It does not always follow that a case of gross misconduct automatically results in dismissal, this is an avoidable trap. Issues such as length of service, previous disciplinary record, and anything relevant said in their defence at the hearing (or appeal) are all important considerations when deciding whether to dismiss an employee.
Last updated: 25 October 2020