When can employers rely on “some other substantial reason (SOSR)” as fair grounds to dismiss an employee?

For an employer to dismiss an employee lawfully, they must be able to provide a fair reason. There are five potentially fair reasons to choose from relating to employee conduct, capability and performance, redundancy, breach of a statutory restriction or ‘some other substantial reason’ (SOSR).

What is ‘some other substantial reason’?

Dismissal for SOSR is a ‘catch-all’ reason for dismissal designed to allow employers to terminate employment when no other potentially fair reason applies – but whether the reason will be sufficient can depend on the facts and circumstances of each case. There is no helpful statutory definition of the term nor stringent statutory guidance.

Examples of when SOSR has applied include:

• When there is a relatively extreme personality clash which has broken down the employment relationship to the point where it is impossible for colleagues to work together. This could be substantial enough if it has become a business-critical issue.
• A fixed-term contract ending. It is important to note that the line between SOSR dismissal and redundancy in these circumstances can be extremely fine, so it is wise to seek advice if you are uncertain.
• An employee refusing to agree to new terms and conditions of employment. This ‘fire and rehire’ approach to agreeing new terms can be a fair reason for dismissing where you can show you were implementing the changes to their contract for ‘sound business reasons’, although do please seek advice if you are unsure.

Other successful cases have included reasons such as reputational risk, conflict of interest, and  pressure from a third party.

When can an employer confidently rely on SOSR as a reason for dismissal?

The reason for dismissal must be considered ‘substantial’ and have considerable impact on the organisation in the circumstances.

The Tribunal have adopted a two-stage test for establishing whether SOSR can be used:

Stage 1 – Actual reason for the dismissal: The employer carries the burden of proof for showing the SOSR is the sole or principal reason for the dismissal. At this stage the employer only needs to establish an SOSR that could justify the dismissal, not necessary to show it actually did. The tribunal must not consider the justification, reasonableness or fairness of dismissing for SOSR in the first stage.

Stage 2 – Reasonableness consideration: The employer must then show that the decision to dismiss was reasonable in all the circumstances. This includes the size and administrative resources of the employer’s undertaking. However, for this stage the burden of proof is neutral. The Tribunal needs to investigate the reasonableness of the dismissal.

How does the tribunal investigate reasonableness?

The employer has to remain fair to the employee, by acting reasonably and ensuring procedural fairness when making a dismissal.

For example, in most circumstances, it would be reasonable to hold further meetings and discussions to attempt to resolve issues between employer and employee before a dismissal by reason of SOSR is made. Employers should also consider whether there are any reasonable alternatives to dismissal, treating dismissal as a last resort. It is also advisable to offer the employee a right to appeal against the dismissal.

Employers should be careful not to use ‘SOSR’ to avoid following the proper procedures for other types of dismissal such as poor performance or misconduct. Subject to scrutiny by a Tribunal, the decision to dismiss could be found to be unfair in these circumstances.

For more in-depth guidance on any dismissal you’re making, please contact our team on 01904 437680.