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Loss of Trust and Confidence in Employees

Employment Law & HR

This article has been updated from an older version, to reflect current current advice and best practice...

It is increasingly common for employers to cite a loss of trust and confidence with an employee as a reason for terminating their employment.  A breakdown in trust and confidence can be a fair reason for dismissal for ‘some other substantial reason’ (SOSR).   This relies on the ability to be able to demonstrate a breach of the implied term of the mutual agreement of trust and confidence. 

However, as the courts have emphasised now on several occasions, it should not be regarded as an easier route to dismissal than misconduct and an employer still needs to follow a fair procedure before arriving at the decision to dismiss. 

An employer who loses confidence in an employee, requires to establish that trust and confidence has actually broken down due to the conduct of the employee and will have to demonstrate they have acted reasonably in treating that as a sufficient reason to dismiss.  This is likely to involve going through a process of giving warnings and allowing an opportunity for improvement unless the behaviour is so serious that it amounts to gross misconduct and is clearly outlined in the Company’s policies.    

It is of course tempting sometimes for employers, who may not be able to establish gross misconduct as a reason for dismissing an employee to rely instead on a breakdown on trust and confidence and can SOSR as the reason for dismissal.  This case provides a useful reminder to employers of the pitfalls inherent in this approach.

The Employment Appeal Tribunal case of the Governing Body of Tubbenden Primary School v Sylvester provides useful guidance to employers who want to dismiss an employee following a breakdown in trust and confidence. 

The claimant, Sylvester, was deputy head of a primary school and had a friendship with another teacher, Quinney, who was suspended for possessing indecent images of children.  Sylvester maintained the friendship despite the school headteacher advising her against it.  No action was taken against her until some months later when the school received complaints from parents.  Sylvester was suspended for continuing her friendship with Quinney.  She asked if it would make a difference if she agreed to give up her friendship but the head declined to comment.  She was subsequently dismissed for some other substantial reason, the school concluding there was a breakdown in trust and confidence. 

The school was criticised for failing to warn the claimant of the potential consequences of her continued friendship with Quinney, for failing to inform her about the comments from parents and for giving the impression that it condoned the relationship.  The dismissal was found to be unfair. 

The Employment Appeal Tribunal said where the reason for dismissal is SOSR based on a breakdown of trust and confidence, an employer still needs to have proper regard to the ACAS Code.

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