Can the breakdown of a working relationship lead to a fair dismissal?

To succeed in an unfair dismissal claim, a claimant must first prove that they were dismissed by the employer. The Tribunal will look to the employer to show that the reason for dismissal was one of the five potentially fair reasons, namely:

1. capability;
2. conduct;
3. redundancy;
4. breach of statute; or
5. “some other substantial reason…to justify the dismissal”.

Where the reason for dismissal does not fall into one of the first four categories, “some other substantial reason” can be a useful fallback for employers, as long as:

• the reason is “substantial”, which means “more than whimsical or capricious” (clear as mud?!); and
• the dismissal can be justified.

Cases where employers have successfully relied on “some other substantial reason” include: restructures (which fall short of redundancy) and where there is a breakdown in the working relationship / a clash of personalities.

In the recent case of Gallacher v Abellio Scotrail Ltd, the Tribunal and the Employment Appeal Tribunal (EAT) agreed that the Claimant had been fairly dismissed for “some other substantial reason” due to the breakdown in relationship between her and her line manager. So what can we learn from this case?

The Claimant had been employed since 2007 and was a senior manager, initially having a good working relationship with her line manager. However, over the course of her employment, their relationship deteriorated, predominantly due to salary and recruitment issues, and the Claimant made it clear that she was seeking another role.

Following a number of discussions regarding their relationship, it became clear that the personality clash was insurmountable. As well as making openly negative comments about her manager, the Claimant admitted that she did not behave in the same way towards any other member of staff. The Claimant also conceded that she had no interest in repairing the relationship with her manager.

After consulting with HR, the Claimant’s manager made the decision to dismiss the Claimant during an appraisal meeting, referring to the breakdown in their working relationship. There had been no procedure leading to the dismissal and the Claimant was not given the right to appeal. She, therefore, brought an unfair dismissal claim.

The Tribunal found that the dismissal was fair, as:

• the decision not to follow a procedure was within the “band of reasonable responses”; and
• if a procedure had been held, it would likely have made the situation worse.

The EAT upheld the Tribunal’s decision, noting that following a fair process would not have resulted in a different outcome due to the Claimant’s unwillingness to repair the working relationship with her manager.  

What does this mean for your business?

This case highlights the importance of both parties being willing to work to resolve breakdowns in working relationships. Where an employee refuses to do so, it is more likely that their employer can fairly dismiss them for “some other substantial reason” due to the relationship breakdown.  

Whilst the dismissal in this case was found to be fair, despite the employer’s failure to follow a process beforehand, the circumstances are quite unusual, and this case does not give employers carte blanche to dismiss without following a process first!

The EAT specifically noted that: "Dismissals without following any procedures will always be subject to extra caution on the part of the Tribunal before being considered to fall within the band of reasonable responses."

A dismissal can be considered unfair purely due to procedural failures (even if the employer has or had a fair reason to dismiss), so it is really important to get the process right.

A fair process is also important, as a Tribunal can increase a Claimant’s compensation by up to 25% if a fair process (in line with the ACAS Code of Practice on Disciplinary and Grievance) is not followed. 

What do you need to be doing now?

Although the above case is useful in quite specific circumstances, our advice remains to follow a fair process before dismissal wherever possible, as failing to do so makes it much easier for a claimant to argue that a dismissal was unfair.

If you do not have a Disciplinary Policy in place, we would advise introducing a non-contractual one and ensuring that managers are aware of and trained on the same, as a fair process is then much more likely to be followed.

The EAT judgment is available here.

These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.