- 17 minute read
- Last updated: 30th November 2019
As an employer, if you are looking to dismiss an employee, you will need a lawful reason to do so, otherwise run the risk of facing an unfair dismissal claim. Below we look at what ‘Some Other Substantial Reason’ means and how, in practice, this can be applied by employers to establish a fair dismissal.
This article covers:
- What is ‘Some Other Substantial Reason’?
- Relying on SOSR for dismissal
- Examples of ‘Some Other Substantial Reason’
- Risks of relying on SOSR
Where any of the other four potentially fair reasons for dismissal, as provided in the Employment Rights Act (ERA) 1996 – conduct, capability, redundancy or breach of a statutory restriction – do not apply, employers may be able to rely on “some other substantial reason” (SOSR) to be able to lawfully dismiss an employee.
SOSR is a statutory catch-all provision that can allow an employer to fairly dismiss an employee in circumstances where no other potentially fair reasons apply. As such, this provision can be a useful tool for employers in justifying dismissal in somewhat unusual scenarios, although whether or not the reason for dismissal falls within its scope will depend on the facts of each case.
The phrase is neither statutorily defined, nor is there any official guidance on what it means or exactly what it encompasses. In theory, “some other substantial reason” can cover a wide variety of situations although, inevitably, there are limits on when and how it can be used.
Needless to say, as the phrase itself suggests, it cannot be used to justify dismissal for something wholly frivolous or insignificant, rather it must be for something “substantial”.
Where you are looking to use “some other substantial reason” to establish a fair dismissal, you must not only show that you have a genuine reason for the dismissal, but that the decision to dismiss for this reason was reasonable in the given circumstances.
As with any dismissal, to have acted reasonably, you must follow a fair procedure. Typically, when dismissing an employee, an employer would refer to the guidance for handling disciplinary procedures set out under the Acas Code of Practice on Disciplinary and Grievance Procedures.
However, when relying on “some other substantial reason” to justify a dismissal, given that there is no clear guidance as to whether this Code of Practice should apply here, the procedural position is also somewhat ambiguous.
In practice, the potential scope of “some other substantial reason” means that there are no established ways of dealing with each specific scenario, where what is fair, as with the question of what is sufficient, will depend on the particular circumstances of each case.
As a starting point, however, the basic fairness requirements must still be met. In other words, although a fair procedure for a dismissal can vary depending on the underlying reason behind any decision to dismiss, this still forms a fundamental part of the overall reasonableness test.
In most cases, a fair dismissal will require a thorough investigation, together with some form of discussion or consultation with any affected employee(s), explaining the impact of any proposed changes or other pertinent issues. You should also respond to any representations made or objections raised by employees and/or any representatives, and always consider any reasonable alternatives to dismissal.
Further, where the reason in any way relates to misconduct or poor performance issues, the Acas Code of Practice should almost certainly be followed.
Although any failure to follow the Code of Practice for Grievance and Disciplinary Procedures does not, in itself, make you liable to proceedings, nor does it automatically make any dismissal unfair, an employment tribunal can increase any award of damages made against you by up to 25% for any unreasonable failure to follow this guidance.
You should also be extremely cautious when seeking to describe the reason for dismissal under the catch-all provision of “some other substantial reason”, when the reality is that it relates to a conduct or performance issue for which strict disciplinary procedures should be followed. The tribunal will take a dim view of any attempts to disguise the real reason behind your decision to dismiss.
“some other substantial reason” can cover a wide variety of situations when looking to lawfully dismiss an employee. That said, although the judiciary have been unwilling to lay down any general rules, the courts and tribunals have gradually come to accept certain categories of “substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held” (section 98(1)(b) ERA 1996).
Furthermore, there are also generally accepted procedural standards to be applied when seeking to dismiss an employee within one of these established categories. Below we look at some of the most common examples.
Business restructure or reorganisation
If your business has recently undergone or is due to undergo a restructure, but this does not give rise to an actual redundancy situation, the use of “some other substantial reason” can potentially provide a fair reason for dismissal here.
By way of example, this may be where different departments, or specific job roles, are being reorganised or redefined, but there is no actual reduction in the number of roles available or the work to be undertaken. Instead, there is a reallocation of work patterns amongst the existing workforce.
However, for this scenario to fall within the scope of “some other substantial reason”, there must be a genuine and substantial business reason for the change and you must still follow a fair procedure. In particular, you should consult with your workforce prior to reaching any decision to dismiss, explaining the reason for any proposed changes.
You should also give any affected employees time to consider your proposals and to make representations before the change is effected, not to mention the offer of suitable alternative vacancies.
Refusal to accept new contractual terms
In the event that you need to change the terms and conditions of an employee’s contract of employment, but the employee refuses to agree to the change, in certain circumstances unilateral contractual changes will potentially fall within the scope of “some other substantial reason”.
However, you must again be able to show that there are legitimate business reasons for these changes and you have followed a fair procedure. As with the example above, this will include some form of consultation process with any affected employees, together with careful consideration as to why any given employee has rejected these changes. Where 20 or more dismissals are proposed here, you should also follow the collective consultation rules.
Reputational risk to your business
Where a particular employee has been accused or convicted of a criminal offence, depending on the seriousness of the offence in the context of your business and the seniority of the employee in question, this could potentially pose a reputational risk to your organisation. In these circumstances, “some other substantial reason” could be used to justify any dismissal.
There may also be other situations in which the conduct of the employee outside of work, or other matters personal to them but unconnected to the workplace, can impact on how your business is perceived.
Even though the matter may bear no direct relevance to the individual’s performance at work or their ability to do their job, it may still be reasonable in all the circumstances to dismiss the employee where the risk to your business is sufficiently serious.
Needless to say, the employee must first be given an opportunity to defend their position, not least where you are not privy to all of the facts. You must also consider whether there are any suitable alternatives to dismissal, such as redeployment or removing the employee from any public-facing role.
Breakdown in mutual trust and confidence
In some situations, a breakdown in the mutual trust and confidence between the parties can constitute “some other substantial reason” for a fair dismissal. This, in itself, however, can cover a wide range of different scenarios and may even overlap with some of the other reasons cited as “substantial”.
Given the scope for so many different situations here to fall within the statutory catch-all provision, it should not be conveniently used to dismiss any unwanted or troublesome employee, nor must it be a convenient label to pin on any dismissal that fails to neatly fit into one of the other fair reasons for dismissal.
Very often, where the employment relationship has been damaged in some way by the employee, this will, in reality, be due to some misconduct or poor performance on their part, for which different procedures and an entirely different basis for dismissal must be used.
The tribunal will easily identify where an employer has sought to use “some other substantial reason” as a means of avoiding following proper procedures for conduct and performance issues. While these disciplinary procedures can be drawn out, often requiring written warnings before any decision to dismiss, they must be followed where misconduct and/or poor performance are the principal reason for the dismissal.
Even in circumstances where an employee is potentially guilty of gross misconduct, such as theft, physical violence or serious insubordination, and where this conduct has completely destroyed the relationship of trust and confidence between the employer and employee, a full investigation and fair disciplinary process should still be followed.
Personality clashes with you or within the workforce
As with the breakdown in mutual trust and confidence, any personality clash between you and the employee, or as between two colleagues, must be seriously impacting on your employment relationship or any relationship within the workforce, such that it becomes impossible for the affected parties to continue working together.
In such circumstances the breakdown must be causing substantial disruption to your business, and must be irreparable, where all reasonable steps have been taken to try to improve the relationship or otherwise resolve the issue. This should include consideration of any alternatives to dismissal, such as changing reporting lines or redeployment for the employee, or employees, in question.
The fairness of the dismissal may ultimately depend upon the size of your business and the level of disruption caused by the clash.
Other reasons that may be regarded as “substantial”
Other reasons for dismissal that have been found to fall within the “some other substantial reason” category of a kind that justifies dismissal include, but are by no means limited to, the following:
Conflict of interest with an employer’s legitimate business interests – where an employee has a close relationship with a competitor that would give rise to a real commercial risk.
Pressure from third parties – where a major client is unwilling to continue working with a particular employee, although often this will actually relate to a conduct or performance issue, or can be too tricky to rely on due to the potential injustice to the employee.
Expiration of a temporary fixed-term contract – although redundancy is usually the more suitable reason for dismissal here.
When seeking to rely on “some other substantial reason” you must not only show that the reason is of a kind that justifies the dismissal, you must also show that you acted reasonably in treating that reason as sufficient for dismissal.
In other words, you must have followed a fair procedure, acted reasonably in all the circumstances of the case and the decision to dismiss fell within the range of reasonable responses.
Where you fail to satisfy any of these requirements, you may find yourself defending a complaint for unfair dismissal before a tribunal. This could prove to be a very costly exercise in the event that you are unable to successfully defeat any such claim and you are ordered to pay an award of damages.
These types of proceedings can also impact on the general morale of your workforce, not least other potentially affected employees.
By seeking to rely on some other substantial reason, ironically this could come at a substantial cost to you, so it is always best to consider alternatives to dismissal wherever possible.
While Some Other Substantial Reason may appear to offer a catch-all for employers, dismissals are typically fraught with risk and it is for the employer to take all necessary steps to ensure and prove that the decision to dismiss has been arrived at following a fair and lawful process, and with lawful reason.
DavidsonMorris are specialists in employment law. We offer employers ongoing advice and guidance through our employment law advisory service, which covers day to day workforce queries such as dismissals and managing the legal risk associated with exiting employees.
If you have a question or need advice on dismissal or relying on SOSR, contact us.