Reputational risk - how to deal with allegations against employees outside work

15 August 2012

The difficult issue of when a dismissal for damaging an employer’s reputation can be fair was considered by the Court of Appeal recently.  Reema Jethwa from our Employment Team considers this important case.

In a case called Leach v The Office of Communications, officers of the Metropolitan Police’s Child Abuse Investigation Command informed Ofcom of allegations that Mr Leach was a threat to children. As these allegations were unproven, Ofcom held several meetings with the officers to ascertain further information and question the reliability of the allegations. Due to the fact that Ofcom is a public regulatory authority, they also sought the advice of their press adviser in relation to the allegations disclosed to them.

Ofcom was advised that even though Mr Leach’s role did not require him to have contact with children, the allegations carried a ‘significant risk of reputational damage’ to the organisation if they were true and were covered by the press. At his disciplinary hearing Mr Leach denied all of the allegations. Nevertheless, Ofcom made the decision to dismiss him based on the advice that he continued to be a risk to children and also due to the fact that these allegations posed a serious risk to Ofcom should they later be proved to be true. The letter confirming his immediate dismissal referred to the ‘breakdown in the relationship of trust and confidence’.

What does this mean for employers?

Although this case confirms that serious reputational risk to the employer can be grounds for fair dismissal, employers should not interpret this decision as giving the green light to dismiss in any case involving reputational damage. In particular, the Tribunal tends to frown on 'breakdown of mutual trust and confidence' being over used. Importantly, when relying on information from third parties, as was the case with Ofcom, employers should adopt a critical approach to the information received and should not simply accept it at face value. What this case does show is that even though the employment in question had no connection with children, an employer may still be legitimately concerned about the potential reputational damage to their organisation and may use this as a reason to justify the employee’s dismissal.

A case which illustrates the need for caution by employers wishing to dismiss where reputational damage is alleged to have been caused is Teggart v TeleTech UK Ltd. Here the Industrial Tribunal in Northern Ireland held that the mere mention of the company’s name on Facebook was not sufficient to bring the company’s reputation into disrepute. The tribunal commented that company's decision to dismiss Mr Teggart on the basis that he had brought TeleTech into disrepute was "seriously flawed". TeleTech's conduct policy stated that an act will be considered to be gross misconduct if the employee brings the company into "serious" disrepute. Although the disciplinary panel found that Mr Teggart had brought the company into disrepute, the panel had not considered the "serious" element of that charge at all. Therefore, the tribunal held that TeleTech could not have been satisfied that the comments brought the company into serious disrepute.

For further information on this or any other employment law issue, please contact Reema Jethwa by emailing Reema or by calling her on 08450 990045, or speak to your usual contact in the Employment Team.

This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.