In the recent case of Perkin v St George's Healthcare NHS Trust, the Court of Appeal has held that a dismissal as a result of an employee's difficult personality was a potentially fair dismissal for "some other substantial reason".

The Facts

Mr Perkin was employed by St George's Healthcare NHS Trust as director of finance. There were concerns about his personality and relationships with colleagues and third parties. The Trust's chairman, Ms McLoughlin, told KPMG that she wanted an "exit strategy" for Mr Perkin by the end of the month. That day the Chief Executive, Mr Hamilton, called Mr Perkin into a meeting and asked him to resign. Mr Perkin refused.

A disciplinary meeting was then held, chaired by Ms McLoughlin and Mrs Mark, following which Mr Perkin was suspended. During the meeting Mr Perkin made accusations against Mr Hamilton. The hearing found that Mr Perkin should be dismissed with immediate effect because his relationship with the executive team had broken down and he failed to establish quality of relationships with third parties necessary to preserve and advance the Trust's interest. They also held that the allegations against Mr Hamilton meant they could never work together again.

Mr Perkin brought a claim in the employment tribunal for interim relief, automatically unfair dismissal under the whistle blowing provisions of the Employment Rights Act 1996 and unfair dismissal under s.98 of the same Act. The Trust argued that Mr Perkin was dismissed for "a reason related to his conduct" and/or "some other substantial reason" (SOSR) i.e. the irretrievable breakdown in relationships to which his behaviour had given rise.

Employment Tribunal (ET)

The employment tribunal found that Mr Perkin had been unfairly dismissed because the disciplinary hearing had not been chaired by an impartial individual. The fact that Mrs Mark had assisted Ms McLoughlin did not remedy this difficulty. However the tribunal found that Mr Perkin had contributed 100% towards his dismissal, and that even if the dismissal had been procedurally fair, he would have been dismissed in any event. Accordingly no compensation was awarded.

Employment Appeal Tribunal (EAT)

Mr Perkin appealed to the EAT, arguing that no allegations had been made against him in respect of his ability or integrity but that he had been dismissed solely on the grounds of "personality". He argued that the dismissal could not fall within the ground of "conduct" and that the only possible fair reason would be "capability", which the Trust had not argued. He also argued against the finding that there was a 100% chance that he would have been dismissed anyway even if the procedure had been fair. The EAT upheld the findings of the ET. Mr Perkin appealed to the Court of Appeal.

Court of Appeal

The Court of Appeal held that personality, of itself, cannot be a potentially fair ground for dismissal. For there to be a potentially fair reason for dismissal, the employee's personality must manifest itself in a way which results in conduct which could justify dismissal or in SOSR justifying dismissal. The Court of Appeal stated that is possible for an employer to fairly dismiss an employee for SOSR as a result their personality, provided a fair procedure has been followed.

The Court of Appeal held that Mr Perkin's dismissal was for SOSR. It held that the principles relating to fairness in the Burchell case need not be limited to conduct cases and that the same approach could be applied to SOSR dismissals. As far as the 100% reduction in compensation was concerned, the Court of Appeal held that every case depends on its facts. It agreed that the tribunal's findings of fact, that Mr Perkin's behaviour during the disciplinary process "opened the door" to the tribunal finding that a fair procedure would have made no difference.

Personality issues with employees are far from uncommon for many employers, particularly in relation to more senior employees, however cases such as this rarely reach an employment tribunal. Although the courts have previously acknowledged that a dismissal for a personality clash could be a dismissal for SOSR, this is the first decision at this level. The key issue is that employers must ensure that a fair procedure is followed and that the employee also feels that the procedure has been fair.

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