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Small businesses may be able to rely on external advice when dismissing an employee

A small and/or owner-managed employer may fairly dismiss an employee on the advice of an external HR consultant in certain circumstances, according to a recent ruling.

The owner of a small business had nine employees and dismissed a senior manager for gross misconduct. The conduct in question involved “a senior manager engaging in sexual activity with a member of his staff on the company’s premises after hours, accompanied by a conversation which revealed, at the least, a complete lack of respect for his boss”.

The owner, who was also the managing director, asked an external HR consultant for advice who recommended dismissal. The MD decided to dismiss the manager on her advice, and rejected an appeal on the basis of advice from another consultant in the same agency.

The Employment Appeal Tribunal ruled that it was fair and reasonable for a small employer with no employment law expertise to obtain and make decisions based on advice from an external consultant, and that the dismissal was within the band of reasonable responses for an employer in the circumstances. The fact that the managing director made the ultimate decision to dismiss was inevitable in the circumstances, given the nature of the business. Therefore, the decision to dismiss was not unfair or unreasonable on grounds he should not have been involved in both the decision to dismiss and the subsequent appeal.

Recommendation

Small and/or owner-managed businesses looking to dismiss employees should consider taking advice from external expert consultants, as this may be followed in certain circumstances.

Case ref: GM Packaging (UK) Ltd v Haslem [2014] UKEAT 0259_13_2901

Jonathan Waters is the founder of Helix Law. Before qualifying as a Solicitor he worked in industry and in investment banking for over a decade. He was also the Partner in charge of Commercial Litigation, Employment Law and Property Litigation at Stephen Rimmer LLP. Jonathan has wide experience of helping and advising businesses to avoid or to deal with commercial disputes and in particular construction disputes.

This article is written to raise awareness of the issues it discusses and it may not be updated after it is first written, even if the law changes. It is not intended to be legal advice and cannot be relied on as such. Helix Law is not responsible or liable for any action taken or not taken as a result of  this article. If you think the matters set out affect you and you wish to apply them to your particular circumstances then we are happy to give you free initial telephone advice. 

Contact Helix Law on 01273 761 990 or email: [email protected]