This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Learn when a dismissal based on a breakdown of trust and confidence may be fair under UK employment law. Understand SOSR dismissals, tribunal tests, employee rights, employer obligations, compensation, and unfair dismissal claims in England and Wales.
A breakdown of trust and confidence is one of the more complex reasons employers rely upon when dismissing an employee. Unlike misconduct, poor performance, or redundancy, it does not always fit neatly into the traditional categories of fair dismissal. Instead, employers often argue that the employment relationship has deteriorated to such an extent that continuing the relationship is no longer possible.
In England and Wales, a dismissal based on a breakdown of trust and confidence can potentially be fair, but only if the employer can demonstrate a legitimate reason for the dismissal and follows a fair procedure. Employment tribunals will closely examine both the circumstances that led to the breakdown and the way the employer handled the situation before deciding whether the dismissal was fair.
Understanding how the law approaches these cases is important for employers seeking to manage workplace disputes and employees who believe they may have been unfairly dismissed. This article explains the legal principles, relevant procedures, tribunal considerations, compensation issues, and practical steps that may arise when trust and confidence breaks down in the workplace.
What Is Meant by Trust and Confidence?
Every employment relationship contains an implied term of mutual trust and confidence. This means that employers and employees are expected to behave in a manner that allows the relationship to function properly and maintains mutual respect.
The principle applies regardless of whether it is written into the employment contract. Employers are expected to treat employees fairly, honestly, and reasonably, while employees are expected to act loyally and in good faith towards their employer.
Examples of conduct that may damage trust and confidence include:
- Dishonesty or deception.
- Serious breaches of workplace policies.
- Persistent conflicts with colleagues or management.
- Breaches of confidentiality.
- False allegations against colleagues.
- Repeated insubordination.
- Conduct that damages business relationships.
- Actions that undermine an employer’s confidence in an employee’s ability to perform their role.
A breakdown does not necessarily require misconduct. Sometimes trust simply deteriorates due to ongoing disputes, irreconcilable differences, or circumstances that make continued employment impractical.
The Legal Basis for Dismissal
Under the Employment Rights Act 1996, employers must establish a potentially fair reason for dismissal. The recognised categories are:
- Conduct.
- Capability or qualifications.
- Redundancy.
- Statutory illegality or restriction.
- Some Other Substantial Reason (SOSR).
Many dismissals based on a breakdown of trust and confidence are defended under the category of “Some Other Substantial Reason” (SOSR). Tribunals have long recognised that a serious breakdown in the employment relationship may constitute a substantial reason capable of justifying dismissal where the situation does not fall squarely within misconduct, capability, redundancy, or illegality.
What Is Some Other Substantial Reason (SOSR)?
SOSR is often described as a catch-all category for situations that do not fit within the other statutory reasons for dismissal. Although there is no exhaustive definition, tribunals have accepted various circumstances as potentially falling within SOSR, including:
- Business reorganisations.
- Third-party pressure.
- Refusal to accept contractual changes.
- Personality clashes causing serious workplace disruption.
- Irretrievable breakdowns in working relationships.
- Loss of trust and confidence between employer and employee.
However, simply labelling a dismissal as a breakdown of trust and confidence does not automatically make it fair. The employer must still prove that the breakdown genuinely existed and that dismissal was a reasonable response.
When Can a Breakdown of Trust and Confidence Justify Dismissal?
Tribunals generally look for evidence that the relationship has become genuinely unworkable.
Factors that may support a fair dismissal include:
Serious Workplace Conflict
Where disputes have become so severe that productive working relationships are impossible, an employer may conclude that continued employment cannot realistically continue.
For example, ongoing hostility between a senior manager and an employee may create operational difficulties that affect the wider organisation.
Loss of Confidence in Senior Employees
Certain roles require particularly high levels of trust.
Directors, managers, financial officers, compliance personnel, and employees with access to confidential information may be subject to greater scrutiny where trust concerns arise.
A genuine loss of confidence in an employee occupying a position of responsibility may justify dismissal if supported by evidence.
Relationship Breakdown Following Misconduct Allegations
Even where misconduct is not proven to the standard required for a conduct dismissal, the surrounding circumstances may create a substantial breakdown in trust.
Employers must nevertheless act carefully, as tribunals may scrutinise whether the employer is using trust and confidence as an alternative justification where evidence of misconduct is weak.
Third-Party Relationships
Occasionally, key clients, regulators, or business partners may refuse to work with a particular employee.
Where this creates significant commercial difficulties, dismissal may potentially be justified under SOSR, provided the employer investigates alternatives and acts reasonably.
Situations That May Not Justify Dismissal
A dismissal is less likely to be fair where:
- The employer relies on vague assertions rather than evidence.
- The breakdown results primarily from the employer’s conduct.
- No attempt was made to resolve workplace issues.
- Mediation or alternative measures were ignored.
- The employer failed to investigate allegations properly.
- Personal dislike is presented as a breakdown of trust.
- The employer acts disproportionately.
Tribunals are often sceptical of employers who merely state that trust has been lost without explaining why.
The Importance of a Fair Procedure
Even where trust has genuinely broken down, the employer must usually follow a fair procedure before dismissal.
A fair process may involve:
- Conducting an investigation.
- Gathering relevant evidence.
- Interviewing witnesses.
- Holding meetings with the employee.
- Allowing the employee to respond.
- Considering alternatives to dismissal.
- Providing a right of appeal.
Employment tribunals frequently examine procedural fairness when assessing unfair dismissal claims. Employers are generally expected to follow fair procedures and, where relevant, the ACAS Code of Practice. Failure to do so may contribute to a finding of unfair dismissal.
How Employment Tribunals Assess Fairness
Tribunals do not decide whether they personally would have dismissed the employee.
Instead, they consider whether the employer acted reasonably in all the circumstances.
Factors commonly considered include:
Whether the Breakdown Was Genuine
The tribunal will examine evidence showing that trust and confidence had genuinely been lost.
Documents, emails, witness evidence, disciplinary records, grievances, and meeting notes may all be relevant.
Whether the Employer Acted Reasonably
The tribunal will consider whether a reasonable employer could have reached the same conclusion.
This is commonly known as the “range of reasonable responses” approach.
Whether Alternatives Were Considered
Tribunals often expect employers to consider alternatives such as:
- Mediation.
- Redeployment.
- Changes in reporting arrangements.
- Additional supervision.
- Informal resolution measures.
A failure to consider reasonable alternatives may weaken the employer’s case.
Whether the Procedure Was Fair
Even a genuine breakdown may not justify dismissal if the employer rushed to a decision without proper investigation or consultation.
Common Evidence Used in Tribunal Claims
Evidence frequently relied upon includes:
- Employment contracts.
- Staff handbooks.
- Grievance records.
- Disciplinary documents.
- Emails and messages.
- Witness statements.
- Investigation reports.
- Performance records.
- Appeal outcomes.
The quality and consistency of documentary evidence often play a significant role in tribunal decisions.
Can an Employee Claim Unfair Dismissal?
Employees with the necessary qualifying service may generally bring an unfair dismissal claim if they believe the dismissal was unreasonable.
The tribunal will consider:
- The employer’s stated reason for dismissal.
- Whether that reason was potentially fair.
- Whether dismissal was reasonable in all the circumstances.
- Whether a fair procedure was followed.
The burden initially falls on the employer to identify and establish a potentially fair reason for dismissal. The tribunal then assesses overall fairness.
What If the Employer Caused the Breakdown?
An important issue arises where the employer’s own actions destroyed trust and confidence.
Examples may include:
- Serious bullying.
- Failure to address grievances.
- Unjustified disciplinary action.
- Unilateral contractual changes.
- Persistent unfair treatment.
In such circumstances, the employee may potentially argue that the employer breached the implied term of mutual trust and confidence. In serious cases this can form the basis of a constructive dismissal claim.
Time Limits for Bringing a Claim
Most unfair dismissal claims must be commenced promptly.
In most cases:
- ACAS Early Conciliation must be started before tribunal proceedings.
- The normal tribunal time limit is three months less one day from the effective date of termination, subject to any extension resulting from the Early Conciliation process.
Missing the applicable deadline can prevent a claim from proceeding, even where the underlying complaint appears strong.
Compensation Following Unfair Dismissal
Where an unfair dismissal claim succeeds, a tribunal may award compensation.
Potential remedies include:
Basic Award
The basic award is calculated using statutory criteria including:
- Age.
- Length of service.
- Weekly pay limits.
Compensatory Award
The compensatory award is intended to compensate for financial losses resulting from the dismissal.
Potential losses may include:
- Lost earnings.
- Loss of benefits.
- Pension losses.
- Future loss of earnings in appropriate cases.
Employees are generally expected to take reasonable steps to reduce their financial losses by seeking alternative employment.
Reinstatement and Re-Engagement
Although relatively uncommon, tribunals may also consider:
- Reinstatement to the original role.
- Re-engagement in suitable alternative employment.
However, where trust and confidence has genuinely broken down, these remedies are often considered impractical.
Practical Considerations for Employers
Employers dealing with trust and confidence issues should:
- Investigate concerns thoroughly.
- Keep detailed records.
- Act consistently.
- Follow internal procedures.
- Consider alternatives before dismissal.
- Allow the employee to respond.
- Provide appeal rights.
Taking these steps can significantly reduce the risk of successful tribunal claims.
Practical Considerations for Employees
Employees facing dismissal for an alleged breakdown of trust and confidence should:
- Request written reasons where available.
- Review disciplinary and grievance records.
- Preserve relevant communications.
- Use internal appeal procedures.
- Gather supporting evidence.
- Monitor tribunal deadlines carefully.
A well-documented record of events can be crucial if a dispute later reaches an employment tribunal.
Common Questions from our Readers
Can an employer dismiss someone simply because they no longer trust them?
Not automatically. The employer must usually demonstrate objective reasons for the loss of trust and show that dismissal was a reasonable response.
Is a breakdown of trust and confidence always misconduct?
No. The breakdown may arise from workplace conflict, personality clashes, commercial considerations, or other substantial reasons that do not amount to misconduct.
Does the employer need proof?
The employer generally needs sufficient evidence to justify its decision. Unsupported assertions are unlikely to be persuasive before a tribunal.
Can a dismissal be unfair even if trust has broken down?
Yes. A dismissal may still be unfair if the employer failed to follow a fair procedure or acted outside the range of reasonable responses.
Can an employee resign because trust and confidence has broken down?
Potentially. Where the employer has seriously breached the implied term of mutual trust and confidence, a constructive dismissal claim may arise.
Final Thoughts
A dismissal based on a breakdown of trust and confidence can be fair under employment law in England and Wales, particularly where the employer can demonstrate a genuine and substantial reason for believing that the employment relationship has become unworkable. In many cases, such dismissals fall within the category of Some Other Substantial Reason under the Employment Rights Act 1996.
However, proving a breakdown is only part of the legal test. Employers must also act reasonably, investigate concerns properly, follow a fair procedure, consider alternatives, and provide the employee with an opportunity to respond. Employment tribunals will examine the entire context before deciding whether dismissal was fair.
For employees, understanding the reasons given for dismissal, preserving evidence, using internal appeal procedures, and observing tribunal time limits can be essential steps when assessing whether a dismissal may be challenged.
