Broken reputations

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Reputations can easily be lost, so how should practices react if employees bring shame?

On the one hand the practice needs protecting; on the other, a requirement exists to be fair when investigating.

According to Tina Chander, partner and head of the employment law team at Wright Hassall, it’s important to recognise that every case of employee-related reputational damage is different – and furthermore, that “context is everything when considering whether an employee has caused his or her employer reputational damage”.

She offered an example: “For anyone involved with children or vulnerable people, any misconduct of a sexual nature – even if committed legally in private – that finds its way into the public domain is likely to be reputationally damaging.

“Likewise, if an employee behaves inappropriately during working hours and is clearly identifiable as a company employee, his or her employer might justly accuse him or her of bringing the company into disrepute.”

But for Amanda Trewhella, managing associate at Freeths LLP, reputational damage caused by an employee depends on how well known the employee is, whether the public associates him or her with his or her employer, as well as the seriousness of his or her actions.

She said: “It is particularly likely that for those with a high profile in the public eye that poor conduct could cause reputational damage to their employer.”

However, Ms Chander said that there must be proportionality – that employers don’t always win cases.

Then an additional risk exists that an employee could cause reputational damage, either inadvertently or deliberately, through social media. On this, Ms Chander said: “There have been several high-profile cases of employees expressing views, or sharing the views of others, that are directly contradictory to the principles endorsed by their employer.”

Inside or outside?

The fact employees occasionally get into trouble is a given. But are the risks the same if the matter occurs inside or outside of work or working hours?

For Ms Trewhella, it is unlikely to matter where the conduct happened.

She said: “The most relevant factors are likely to be the seriousness of the conduct, whether the conduct relates in some way to the employee’s role or the organisation generally, and whether the employee is publicly linked to the organisation.”

A similar stance was taken by Ms Chander, who said: “Each case has to be considered on its own merits.”

The problem, she said, is that “the blurring of private and public life is becoming increasingly common as people share information via social media, assuming they are doing so privately”.

Incidents of private messages and images being leaked are many – some are just embarrassing, whereas others have capacity to cause real reputational harm.

Ms Chander suggested that posting derogatory comments on social media about their employer “could, in theory, lead to a charge of reputational damage if the company’s identity is obvious”.

However, she said: “Not only do employers have to be very clear about why they consider the comments damaging, they must also check that their social media policy reflects the standard of online behaviour they expect of their employees.”

She added that having a policy is one thing, but it needs to be communicated or it’s not worth the paper it’s printed on.

Policies

A disciplinary and grievance policy should list examples of unacceptable conduct, including those that could bring the company into disrepute. It should also tie into a social media policy.

Ms Chander said: “That way, no employee could plead ignorance.”

Ms Trewhella agreed, and said that provided policies are reasonable and have been communicated, an employer would be able to discipline an employee who then breaches it.

She added: “It is particularly important to ensure all policies are properly communicated to staff and, if necessary, they are provided training on them.”

As for a social media policy, she said it should cover use of social media both in and outside the workplace.

“It cannot be prescriptive about an employee’s private use, but it can set out the standards that employees are expected to follow,” she said.

Contracts of employment should also include a clause that allows an employee’s employment to be terminated if he or she breaches the code of conduct laid out in the social media policy.

Once an allegation has been made, an investigation is the starting point for any disciplinary hearing.

But for a dismissal to be fair, the investigation must be thorough and carried out following the proper procedures, otherwise the employer risks falling foul of the Advisory, Conciliation and Arbitration Service code.

As Ms Chander warned, this “applies even if the employee’s misconduct appears to be an open and shut case, and the employee has admitted he or she is guilty of misconduct”.

Experience has taught Ms Trewhella that an investigator should try to keep an open mind and look at all the circumstances surrounding the incident before deciding whether disciplinary action is warranted.

Ms Chander said: “The key thing to remember is that an investigation is designed to uncover the facts rather than establish culpability.”

In other words, no one should be assumed to be guilty.

It also needs to be said that in some circumstances, an arrest elsewhere can lead to dismissal. It is important employers get the investigation and, if necessary, the disciplinary process right. If the dismissal isn’t handled properly, an employee could claim unfair dismissal and breach of contract.

The maximum, basic award for unfair dismissal for an individual with at least two years’ service, from 6 April 2021, is £16,320 – but an employer could face having to pay compensation up to a maximum of £89,493 or 52 weeks’ gross salary, whichever is the lower.

Summary

Firms face threats every day. Some have to be lived with, some dealt with and others minimised.

While it’s impossible to legislate for all situations, policies offer the best protection to employers – and they set the ground rules for disciplinary action.