Could employers dismiss employees fairly based on reputational risk?

  • David Harris
  • Tuesday, December 15th, 2020

Earlier this month, in K v L, the Employment Appeal Tribunal found that a school was not entitled to dismiss K, a teacher of 20 years, on grounds of reputation risk after K was charged but not prosecuted for possessing indecent images of children.

The Employment Appeal Tribunal’s view that it would not have been possible to dismiss fairly based on “risk of reputational damage” will be cause of concern, particularly for schools and other organisations responsible for children or vulnerable adults.

While employers can dismiss fairly on this basis, it can be difficult, particularly where a decision has been taken by the Police and the Prosecution Service not to prosecute. Employers should try to get as much information as possible about the charges from the Police, analyse that information critically and give the employee a proper opportunity to put their case forward.

They will also need to assess the likelihood of the information becoming public knowledge as this will have an impact on whether there is a real risk of reputational damage.

On 30 September 2016, K, a teacher of 20 years with an unblemished record, opened the door to the Police with a warrant which authorised them to search for and seize computers in his possession. The warrant was based on intelligence that indecent images of a child or children had been downloaded to an IP address associated with K. 

K lived at the address with his son. Both he and his son were taken to the Police station for questioning. The Police examined three computers in his home. One was found to have data that was of interest to the Police. The Police seized the computer.  Shortly after the raid the Claimant was due to return to his teaching duties. He did not appear as expected at school and enquiries were made.

He met with the Head Teacher and advised that he was involved in a Police enquiry into potential indecent pseudo images. K was suspended while matters were investigated. K denied from the outset that he was responsible for the images being on the computer. The Police could not establish who had downloaded the images. The Scottish Prosecutor, Procurator Fiscal, decided not to prosecute him or his son, but reserved the right to do so in the future.

The school sought clarification from the Police about the case and asked them to share the evidence they had. The Police responded with a summary of the evidence entirely blanked out, said they could give no view on whether he was a risk to children but confirmed he had not been reported on any similar matter.

The school drew up an investigation report which referred to K as being under Police investigation on charges of possessing indecent child images and to the risk of reputational damage. It recommended a disciplinary hearing. However, the letter inviting K to a disciplinary hearing only mentioned his involvement in the Police investigation and made no mention of risk of reputational damage.

At the disciplinary hearing, K accepted the images were on the computer but denied responsibility for them being there. The school concluded there was insufficient evidence to find he had downloaded the images. However, it dismissed him because of an irretrievable breakdown of trust and confidence and an unacceptable level of risk of reputational damage.

While it could not be shown that K had not downloaded the images, his continued employment posed an unacceptable risk to children. It also considered there was a risk of reputational damage if he was prosecuted in future and it became known the school was aware of the allegations but had continued to employ him.

K claimed unfair dismissal, but the tribunal ruled his dismissal was fair. K appealed to the Employment Appeal Tribunal which overturned the tribunal’s decision and ruled his dismissal unfair. The Employment Appeal Tribunal ruled:

“It was not open to the school to dismiss on grounds of reputational risk as the letter inviting him to the disciplinary hearing did not mention this as a potential ground for dismissal. The fact that reputational damage was referred to in the investigation report was not enough. K had not had an opportunity to address this issue at the disciplinary hearing.”

The Employment Appeal Tribunal agreed with K that it was not open to the school to dismiss on this basis. It had to decide on the balance of probabilities whether he had downloaded the images on the computer. Instead it had decided that unless it could exclude the possibility that K was guilty, it could dismiss on this basis. 

The Employment Appeal Tribunal considered whether the school could have dismissed K fairly based on risk of reputational damage if it had included this in the disciplinary charges. It decided that dismissal on this basis would still have been unfair.

A comparison between K v L and the case of Leach v Office of Communications

The case of Leach v Office of Communications demonstrates that dismissals based on reputational damage may be fair, even where the conduct giving rise to the reputational damage is disputed. However, K’s case was different from Leach as:

1.In Leach, the employer had received substantial evidence from the Police about the employee’s activities with children. In K’s case, the school received no information and he denied responsibility for downloading the images. There was also no information about the nature of the images.

2.In Leach, the employer critically analysed the information with the Police and the court accepted that the employer was entitled to rely on this information.

3.In Leach, there was already press interest in the case and the employer’s press advisor had evaluated the risk of adverse coverage and considered it to be real. In K’s case, there was no existing press interest. There was no prosecution and no indication that this would change.

4.In Leach, the employee had broken the trust and confidence of his employer by hiding the court case from them. 

K was dismissed in the absence of any information about the nature or seriousness of the images, or about why it had been decided not to prosecute. The Employment Appeal Tribunal concluded the evidence was insufficient to support a dismissal based on reputational damage.

It is good practice to ensure all the possible grounds for dismissal or other disciplinary action are included in the disciplinary charges when inviting an employee to a disciplinary hearing. This enables the employee to know the case against them and to come to the hearing prepared to deal with all the charges.

If you need any legal advice regarding unfair dismissal, give us a call on: 0118 208 2000, or email us at: info@dphlegal.com