Can firms discipline staff for misconduct outside the workplace?

8 Mar 2021 By Jonathan Rennie

With Covid-related fines increasingly hitting the headlines, Jonathan Rennie examines how businesses should handle employee behaviour

More often than not, an employee’s conduct outside of work is not something an employer should concern themselves with, unless it directly and adversely affects the workplace. But could an employer have grounds to take action against an employee for breaching Covid regulations outside of work, or might this risk accusations of unfair dismissal? 

An employer can dismiss an employee if it has one of the five potentially fair reasons for doing so, as set out under the Employment Rights Act 1996. One of these is ‘some other substantial reason’, for which there is no statutory definition or guidance, although the reason must be substantial and justifiable. SOSR may apply if the actions of an employee present an unacceptable risk to the business in terms of reputational damage, and is more likely to be relevant if the employee holds a senior position within the company. 

While it is difficult to manage an employee’s activities outside of work, it is possible, in theory, for an employer to take disciplinary action against a staff member for breaching Covid regulations. An employee’s actions could be considered misconduct if there is a genuine connection to the employment relationship; for example, if it prevents the employee from completing their designated duties, or poses a demonstrable risk to the organisation’s reputation. This could include an employee being named in the media for breaching Covid regulations, or even posting a blatant breach on social media, through which the employer can be identified.

Social media

The proliferation of social media makes it easier for employees to engage (knowingly or otherwise) in unacceptable conduct and, at the same time, make it more difficult to identify where such misconduct has occurred in the ‘course of employment’. 

The appropriate course of action for misconduct outside the workplace will always depend on the facts of the case. In the event of criminal activity, consideration needs to be given as to what effect any charge or conviction might have on the employee’s suitability to do the job and their relationship with their employer, work colleagues and customers. 

When it comes to incidents involving social media, the platform used in the course of the misconduct may even impact the action taken. For example, where messages are public, it is more likely to be considered a reputational risk to an employer than a site closed to a private group of just friends and family. Where an employee has named their employer and is readily identifiable from the posts, then this may more legitimise any disciplinary action up to and including dismissal, as seen in the case of Preece v JD Wetherspoons.

Ultimately, there could be grounds for a conduct dismissal if an employee does something outside of work that impacts on employer trust and confidence, and criminal behaviours (including Covid regulation breaches) are likely to fall within that definition. 

However, actions falling short of criminal conduct require a proportionate and measured response, and relying upon a claim of ‘reputational damage’ will not be enough unless the employer can demonstrate lost business, client or customer complaints, or press negativity as a direct result of the employee’s actions. While third-party pressure, for example from a client, might encourage an employer to go down the SOSR route, it is rare for these dismissals to be recommended by employment lawyers as they can be risky and hard to prove.

To minimise risk of reputational harm and help protect themselves against any exposure to vicarious liability, employers should regularly review their code of conduct, social media policy and disciplinary policy to ensure these are up to date, extensive and well-communicated to all employees.

Jonathan Rennie is a partner at UK law firm TLT

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