Some other substantial reason
Labour & European Law Review Weekly Issue 421 27 May 2015
There are a number of potentially fair reasons for dismissal, including “some other substantial reason”. In Anderson v Chesterfield High School, the Employment Appeal Tribunal (EAT) held that the dismissal of an employee who had become a full-time public official and who no longer worked at the school fell into that category.
Mr Anderson was elected Leader of Liverpool City Council (a full time post with an annual allowance of about £50,000) in May 2010. He was then elected Mayor of Liverpool in May 2012, a full time post which attracted an annual allowance of almost £80,000 and was for a fixed four year term.
Throughout this period, Sefton Borough Council held his job open as a Social Inclusion Officer at Chesterfield High School in Sefton, a neighbouring local authority, and paid his pension contributions. This arrangement continued until the school became an Academy and his employment was transferred in October 2011 under the Transfer of Undertakings (Protection of Employment Regulations) to Chesterfield High School, which was independent of Sefton. The school decided to terminate the arrangement whereby it paid him £4,500 per annum in September 2012 as he did not actually do any work for them. Mr Anderson claimed, among other things, that he had been unfairly dismissed.
The tribunal held that he had remained an employee until his dismissal and had been dismissed for “some other substantial reason” (SOSR), a potentially fair reason. However as the dismissal procedure had been unfair, it upheld his claim for unfair dismissal.
The tribunal also decided that it was 100 per cent likely that the school would have dismissed him fairly at the end of 2012, had a fair procedure been followed. As such, it concluded that he was entitled only to a basic award which it reduced by 25 per cent for contributory fault as he failed to keep the school informed that he was standing for Mayor so that they could discuss any impact on his employment. It made no compensatory award.
Mr Anderson appealed the decision of the tribunal.
The EAT held that the principal reason for the “dismissal” was obvious. The school was concerned that it would be severely criticised if it became publicly known that it paid Mr Anderson, an elected official of a neighbouring local authority, for doing nothing. The school was therefore reasonably entitled to regard the arrangement as “inequitable and unsustainable”. The school also took the view that the arrangement (including holding his post open indefinitely) led to some instability internally.
Commenting that “no concern appears to have been given as to what the public perception might be of the expenditure of public money to a full-time politician who was not expected or required to provide any services in return”, the EAT considered that “this arrangement may strike members of the public as constituting a misapplication of public monies”.
As the school’s desire to extricate itself from the arrangement was a clear example of SOSR for ending its employment relationship with Mr Anderson, the EAT concluded that the tribunal was clearly entitled to come to the conclusions that it had.