Any action likely to bring the Company into disrepute

24 May 2019

A good business reputation is important because it can help distinguish a company from its competitors and can even be the deciding factor in attracting custom. It is a standard term in Staff Handbooks that an employee can be dismissed for gross misconduct if it is decided that they have carried out an action likely to bring the organisation into disrepute.  This note looks at the law in this area excluding those cases which involve social media.  Readers wishing to find out more about social media misdemeanours are referred to an article written by my colleague Tony Hyams-Parish, “Beware the usefulness of social media”

Many queries from employers in this area stem from where the employee has been investigated for, charged with or been convicted of a criminal offence which is not work related.  The 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.”

In 2011, a NHS Trust dismissed a care worker for being convicted for possession of cannabis and an illegal firearm.  The Employment Tribunal considered that the Trust had failed to take into account mitigating circumstances including that the firearm was only illegal due to a manufacturing fault unknown to the employee.  The Trust had also failed to particularise why it considered that the care of patients was compromised by the conviction and had made unsubstantiated assertions that its reputation had been damaged.  It is therefore not enough for an employer to blandly assert that the employee’s conduct had brought the organisation into disrepute.

The change in social attitudes:

The decision reflects changes in society towards conduct that some years ago was  considered to be unacceptable and damaging to the reputation of the employer.  The use of swear words is now relatively commonplace on television.  It is therefore doubtful whether an image of an employee “effing and blinding” in public would bring the employer into disrepute. 

Drinking alcohol or taking drugs outside work is another area where social attitudes have changed. Someone smoking cannabis which they have obtained for their personal use at a private party is nowadays unlikely to be criminally prosecuted and once again, it will be difficult for the employer to show reputational damage. Personal relationships have also become more flexible. The days when a Company Director would have to resign because they were going through a divorce have long since gone and society nowadays takes a less critical view towards infidelity. 

Whilst it is well established case law that an employer can consider an employee’s conduct  outside work, the key issue is whether the conduct in question pertains to the employment relationship.  Also, does the employer have a reputation in the marketplace? We live in a world where companies robustly protect their “brand” on Twitter and instantly respond to comments with either rebuttals or apologies. In May 2014, a mother received an immediate apology from a London shopping centre after a security guard tried to stop her breastfeeding in public. The incident caused considerable comment on social media, but has not seemed to have lead to any reputational damage so any termination of employment of the security guard on these grounds would probably be unfair. On the other hand, customers of a bank which depends on having a high reputation for honesty and integrity may well consider closing their accounts if a senior bank official was found to have entered into a tax saving scheme which although legal was considered to be morally ambivalent.

What does the Human Rights Act say:

Article 8 of the Human Rights Act provides that everyone has the right to respect for their private and family life, their home and their correspondence.  The leading case in the European Court of Human Rights involved Princess Caroline of Monaco who complained about a variety of photographs of her being published in the German press.  The photographs showed her carrying out harmless tasks in public places and outside her home.  The European Court of Human Right’s judgment stated there had been a violation of Article 8 in that the photographs in question made no contribution to a debate of public interest since Princess Caroline exercised no official functions and the photographs and articles related “exclusively to details of her private life.”  It therefore follows that if an employer wishes to rely on actions by an employee in their private life, even if such actions took place in public, the employer would have to show that there was a connection between the conduct and the impact on the workplace.

The need nowadays for businesses to provide an immediate response to any potential reputational damage can also mean that they have a knee-jerk reaction to disciplining the employee concerned.  Such a knee-jerk reaction could be a mistake and a finding of unfair dismissal could itself cause more reputational loss. Employers need to carefully balance whether there is real reputational risk, a direct link to the workplace and the privacy rights of the employee under Article 8 before disciplining an employee for gross misconduct. 

Food for Thought:

Consider the following scenarios either as a roundtable discussion, at a workshop or even at a dinner party (us employment lawyers know how to live!) . All scenarios involve a senior bank employee, Chris, who is recognised by a third party as working for the bank. 

Scenario 1 – Chris receives poor service in a restaurant and screams abuse at the waiter.

Scenario 2 – Chris is seen on television at a football match standing next to a person shouting vile racial abuse at a football player.

Scenario 3 – A recording is released to the press of Chris addressing a private meeting and advocating nationalising the banking sector. 

Scenario 4 – Chris and another car driver have an altercation on the public highway which continues into the public car park of the shopping complex where Chris works. Both Chris and the other driver are shouting and swearing at each other.  

For further information or advice, please do not hesitate to get in touch with Alan Finaly of our DMH Stallard Employment Team.  

Further reading

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