Dismissal due to a client’s objection to employee need not be unfair

5 October 2009

On 1 October 2009 the Employment Appeal Tribunal (EAT) ruled on Henderson v Connect (South Tyneside) Ltd. Henderson drove a minibus that took disabled children to school. Connect was contracted to South Tyneside Metropolitan Borough Council to provide transport services. Under the contract, the council had an absolute right to veto the employment of specific individuals.

Henderson had a clear CRB check but allegations subsequently arose that he had been involved in the sexual abuse of his two young nieces. Henderson denied this and pointed out that he had never been prosecuted.

The matter was considered at a meeting of the South Tyneside Safeguarding Children Board, to which Henderson was not invited. The council exercised its right of veto and prohibited Henderson from working with children. Connect suspended him with immediate effect whilst it tried, without success, to persuade the council to reconsider its decision. Connect was not able to redeploy Henderson due to the fact that the only alternative work available required a PCV licence which Henderson did not have. Consequently, Henderson was dismissed.

Henderson claimed unfair dismissal against Connect. The Employment Tribunal ruled that the reason for dismissal – third-party pressure – was capable of being fair as “some other substantial reason”, a potentially fair reason for dismissal under s98 of the Employment Rights Act 1996. The Tribunal was satisfied that Connect followed a fair procedure in making the decision to dismiss. The Tribunal also held that the dismissal was reasonable in the circumstances: Connect had done all it could to assist the claimant and prevent dismissal and the ultimate decision to dismiss was within the band of reasonable responses open to Connect.

Henderson appealed to the EAT. He was unsuccessful. Whist the EAT acknowledged that the procedure by which the council came to exercise its veto was “deplorable”, there was no legal duty on the employer’s client to follow a fair procedure. Instead, the dismissal could not be held to be unfair as Connect had done everything reasonably possible to avoid or mitigate the injustice caused by the client’s stance, notably challenging the board’s decision. The EAT acknowledged that such cases are uncomfortable for an employment tribunal since an unjust outcome may still be deemed to be fair.

Thus, no matter how unreasonable a client’s demands may be, as long as an employer has done everything reasonable to avoid or mitigate any injustice caused by the client’s position and, failing that, seeks to find alternative work for the employee, any eventual dismissal will be fair. This may seem harsh for the employee but it would be equally harsh for an employer to have to bear the consequences of the client’s behaviour and there is no mechanism by which third-party or vicarious responsibility for unfair dismissal may be imposed.