The issue is highlighted by the saga of Sharon Shoesmith, former head of children's services at Haringey Council, who is suing after being axed following the damning report into the Baby P case. Employers should proceed with caution. In clear cases of gross misconduct or negligence, senior executives can be dismissed without notice for breaching their 'fiduciary' duties as a director. But it may be hard to trace a disaster back to a personal failure, particularly in large organisations with complex reporting lines. It might be possible to establish negligence if an individual has direct contractual responsibility for a part of a business that has failed. Otherwise, dismissal might be justified by showing an irretrievable breakdown in their relationship with other senior managers, or by relying on reputational damage caused by a well-publicised debacle in which the executive is implicated. The key is to identify the reasons for dismissal precisely and follow a fair procedure.
Michael Burd and James Davies, Lewis Silkin LLP solicitors - e-mail: email@example.com