As the Acas Code on disciplinary procedures makes clear, even if an employee is charged with, or convicted of a criminal offence, that is not normally in itself reason for disciplinary action.  The employer has to consider "what effect the charge or conviction has on the employee's suitability to do the job and their relationship with their employer, work colleagues and customers".  

The employee in Z v A, a school site manager, was dismissed for "some other substantial reason", on the ground that trust and confidence in him had broken down.  This was because the employer had been informed by the police that an allegation of child sexual abuse had been made against him.

Although the employee had been suspended for about a year before being dismissed, it had been revealed, just before the employee's hearing, that none of the witness statements given to the police supported the allegation and it appeared at that stage that no charges were going to be brought.  Nevertheless, the school governors concluded that even if he were to be exonerated, there would still be a trust and confidence issue, both in him and in terms of the confidence parents and the public had in the school. 

The Tribunal and the EAT both found that the dismissal was unfair, because the employers should not have taken an uncritical view of the information disclosed; they should have carried out their own enquiries to test it.  Even if the employers had been entitled to treat the information as reliable, they still needed to go on to consider whether it was a sufficient reason for dismissal; it is not inevitable that a dismissal in these circumstances would be fair.

Clearly there was a reputational problem for the employer in this case but justifying a dismissal on the basis of reputational risk in the absence of proven misconduct is likely to be problematic.