233: Employee charged with criminal offence was fairly dismissed because of potential reputational risk to employer

In Lafferty v Nuffield Health, the Employment Appeal Tribunal (EAT) has upheld an Employment Tribunal’s decision that an employee who had been charged with a criminal offence was fairly dismissed for ‘some other substantial reason’ given the potential reputational risk to his employer.

Mr Lafferty had over 20 years’ unblemished service working as a hospital porter for Nuffield Health, a registered charity. His duties included moving anaesthetised patients to and from operating theatres. Mr Lafferty was arrested and charged with assault with intent to rape after an incident outside work. He was subsequently suspended on full pay. Following an investigation and disciplinary proceedings, Mr Lafferty was dismissed on notice due to Nuffield Health’s concerns about potential reputational damage, which it was felt outweighed his long, unblemished career, particularly given that he worked with very vulnerable patients. It was also relevant that there was increased public and regulatory scrutiny of charities due to the way some high-profile charities had handled inappropriate behaviour by staff. Nuffield Health considered suspending Mr Lafferty on full pay but concluded that this would be an improper use of charitable funds since he was unable to provide any firm timescale for his trial.

The Employment Tribunal dismissed Mr Lafferty’s claim for unfair dismissal. His employer had shown that the reason for his dismissal was its genuine concern about the risk to its reputation should Mr Lafferty be convicted of the charges against him. Nuffield Health had also acted reasonably in the circumstances. For example, it had sought clarification about what had happened and when the trial would take place and had adequately explored the link between the nature of the charges and the risk to its reputation. It had also considered alternatives to dismissal such as paid suspension.

On appeal, the EAT upheld the Tribunal’s decision. Case law has established that a dismissal can be justified by the risk to reputational damage caused by criminal proceedings, even where the employee is not ultimately convicted. Mr Lafferty had not been dismissed because of a belief that he was guilty, but because of the adverse effects the fact of the charge could have had on Nuffield Health’s reputation, particularly in the context of increased scrutiny in the charitable sector. The nature of his job could have given him an opportunity to commit more of the kinds of acts that he was charged with. Nuffield Health had also taken steps to look beyond the charge by considering the bail and police reports, and had acted reasonably in rejecting the various alternatives to dismissal.

This decision shows that the risk of reputational damage can provide justification for a dismissal even where criminal charges have not been proven. However, there will usually need to be a link between the alleged offence and the potential damage to reputation. The EAT commented that it had found this a difficult case, but that the nature of Mr Lafferty’s job, the clear reputational risk, and the charitable context all meant that the dismissal was fair. It was also notable that the employer had acted fairly and reasonably throughout the investigation and disciplinary process.