Third Party pressure to dismiss employees

Is an employer entitled to dismiss an employee because a customer, supplier or other third party demands it?

Winning and retaining clients is a real challenge for organisations. So what is an employer supposed to do if a major client requests (or demands) that a particular employee is dismissed or removed from their contract? On the one hand, organisations have obligations to their employees, but on the other hand they will not wish to risk losing business.

Employers may assume the main issue would be whether the third party’s request was warranted. However, Employment Tribunal cases stipulate that the employer does not necessarily need to establish any fault on the part of the employee, in fact, they may not even agree with the dismissal request. Instead, the starting point is how serious the risk is to the employer if they do not adhere to the employee’s dismissal. If a major client is seriously threatening to take their business elsewhere, and this will cause a huge disruption to the employer’s business, then this can potentially form the basis of a fair dismissal.

Going back to basics, to dismiss an employee fairly employers must show that they had a potentially fair reason for the dismissal and had acted reasonably in the circumstances. One of the potentially fair reasons is for “some other substantial reason” (SOSR). To successfully argue SOSR, employers will need to demonstrate that they were under serious pressure to dismiss the employee, and that they acted reasonably in all the circumstances. It is not enough to pre-empt a third party’s concerns and the pressure must be more than just a suggestion. Accordingly, employers should seek to question the third party, establish the basis of their request, and challenge their reasoning, if appropriate. Employers should also look at alternatives – for example could the employee be transferred to a different role, contract or location in a bid to appease the client?

An Employment Tribunal will examine the possible detriment to both the employer and the employee and will carry out a balancing exercise to consider the potential “injustice” to each party in order to decide if the dismissal was reasonable. In accordance with the above, the Employment Tribunals will consider the following:

  • The employee’s length of service;
  • Whether there have been any previous issues with the employee; and
  • How easily the employee will find alternative employment if they are dismissed.

More recent cases have held that, even if there is injustice to the employee, a dismissal can still be fair if an employer had “pull[ed] out all the stops” in order to avoid or mitigate the injustice. As mentioned, the employer would usually have to try to persuade the third party to change their mind (if reasonable), or look for alternative work for the employee.

It is vital that all boxes have been ticked when considering dismissal of an employee following a third party request. An employer must follow a fair process and all issues must be considered and discussed with the employee. However, it is encouraging to note that, the more serious the threat and the more valuable the third party, the more likely it is that the employer’s argument will succeed and the injustice to the employee will generally be overcome by the employer’s need to dismiss. 


If you would like more information or advice relating to this article or an Employment law matter, please do not hesitate to contact Chris Cook on 01727 798098.

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