Failure to identify breach of a legal obligation means no valid whistleblowing claim
In Eiger Securities LLP v Korshunova the EAT said that the Employment Tribunal had erred in finding that the employee had made a protected disclosure. The employee’s complaint related to the employer’s practice of allowing its employees to share their passwords for computers and Bloomberg Chat, which meant that clients were unable to identify who they were trading or communicating with. The employee considered that this practice was wrong and believed that there must be a legal obligation on the business to ensure that this practice was prohibited.
The EAT overturned the Tribunal's decision that the employee had made a valid protected disclosure. The employee had to demonstrate that she reasonably believed the employer had failed to comply with a legal obligation. However, the Tribunal had failed to identify the source of that legal obligation. The case was remitted to a fresh Tribunal to consider this and other issues.
This is a helpful decision for employers – the mere fact that an employee considers that certain actions of an employer are wrong is not sufficient to enable the employee to make a protected disclosure.
High Court adopts restrictive interpretation of the scope of legal advice privilege
The RBS Rights Issue litigation concerns RBS’s claim for privilege over various RBS documents which the Claimants want disclosed. The High Court provided guidance on the definition of legal advice privilege and the circumstances in which RBS could claim privilege over its lawyers’ working papers. The Court confirmed that the Court of Appeal decision in Three Rivers (No 5) is the binding authority - legal advice privilege applies only to confidential communications between a party and its legal advisers for the purpose of enabling that party to obtain informed and professional legal advice, The privilege is confined to confidential communications within that relationship. In the case of a corporate entity, only communications with the group of employees within that entity who are authorised to seek legal advice from the lawyer should be given the protection of legal advice privilege.
On this basis, the Court held that the RBS documents, which were interview notes with employees and former employees, carried out on behalf of RBS by the bank’s solicitors, were not privileged. It did not suffice that the individuals who were interviewed were authorised to provide information to RBS's lawyers. Those communications were preparatory to and for the purpose of enabling RBS to then seek and receive legal advice. The individuals who were interviewed were not part of the group of people within RBS who were authorised to seek legal advice from the lawyers.
This is an unwelcome decision for employers – there is a real risk that interviewing employees or former employees will create disclosable documents, particularly in the absence of litigation where there is no prospect of claiming litigation privilege. However, we expect this case to be appealed directly to the Supreme Court, which will allow further consideration of this issue.
Same sex marriage and religious occupational requirement exception
In Reverend Canon Pemberton v Former Acting Bishop of Southwell and Nottingham, the EAT confirmed that it was not direct sexual orientation or marriage discrimination or sexual orientation harassment for a Bishop to refuse to grant a qualification to a priest to enable him to take up a hospital chaplain position. The reason for the refusal was that the priest was in a same sex marriage, contrary to the doctrines of the Church. Whilst the Bishop’s actions were potentially discriminatory, the claim failed because the Respondent was able to rely on the religious occupational requirement exception in the Equality Act 2010. This was because the priest's employment was for the purposes of an organised religion.
It did not matter that the position was at a hospital trust rather than directly with the Church: the relevant issue was the nature of the role and the occupational requirement exemption is not limited to employment within a religious organisation itself. This case is, however, limited in its scope – most employers will not be able to benefit from the religious occupational requirement exception.
Death-bed marriage restriction of survivor’s pension was not discriminatory
In David L Parris v Trinity College Dublin and others, despite a contrary Opinion from the Advocate General, the ECJ found that the individual had not suffered discrimination on the grounds of sexual orientation or age as a result of a rule denying his same-sex partner a survivor’s pension from his employer’s pension scheme on his death. The pension scheme rules expressly excluded such a benefit where a member had married or entered into a civil partnership after reaching the age of 60. Dr Parris entered into a civil partnership in the UK when he was 63 years old and could not have done so in Ireland until he was 65 years old as civil partnerships were not recognised under Irish law until that time.
In departing from the Advocate General’s Opinion and finding against Dr Parris, the ECJ noted that the pension scheme rules were entirely neutral, referring to both homosexual and heterosexual employees, so there was no direct sexual orientation discrimination. There was also no age discrimination on the basis that the Equal Treatment Framework Directive allows pension schemes to fix an age for entitlement to a retirement benefit. The Advocate General’s Opinion considered the issue of the retroactive effect of EU judgments and whether these could be limited but there is no detailed analysis of this in the ECJ’s judgment. This is an issue which is due to be considered by the UK Supreme Court later this year in the Walker v Innospec case.
Revised Gender Pay Gap Reporting Regulations out - what you should do now
The Government has published revised draft Gender Pay Gap Reporting (GPGR) Regulations. These are intended to come into force in April 2017. The revised regulations clear up many issues raised during the consultation process on the first draft regulations. However, there remain some difficult grey areas. We hope these will be clarified by the guidance for employers that is expected out once the regulations have been approved by Parliament. A full analysis of the GPGR Regulations can be read on our blog.
Re-engagement – Tribunal should not substitute its view on practicability for the employer's view
In United Lincolnshire Hospitals NHS Foundation Trust v Farren, a nurse who worked in A&E was dismissed for failing to follow the correct procedure for administering drugs. She succeeded in her unfair dismissal claim. Although the Tribunal refused to order re-instatement, it made an order for her re-engagement in a role outside of A&E. It reached this decision despite the employer arguing that re-engagement was not practicable due to a breakdown in trust and confidence and despite a finding that the nurse had contributed to her own dismissal by one third.
The EAT remitted the case and confirmed that the Tribunal must consider whether the employer genuinely believed that trust and confidence had broken down and was not irrational in doing so. As such, the Tribunal should test the view of the parties, not substitute its own view.
No vicarious liability for post-Christmas party assault
The High Court, in the case of Bellman v Northampton Recruitment Ltd, found that the employer was not vicariously liable for an assault by one of its employees (who happened to be the managing director) on another employee at an impromptu drinking session after the employer’s Christmas party. The actions of the managing director were not “in the course of employment” because it was after the formal Christmas party, the drinks were in a separate location, employees’ partners and other non-employees were present and the conversation had been mainly non-work related. Even though the two men were arguing about a work related matter and some or all of the drinks were funded by the employer, this was not sufficient to make the employer vicariously liable.
This decision should, however, be treated with caution by employers. Such cases are always very fact specific and the Supreme Court has recently confirmed that there is a fine line in deciding when vicarious liability applies. It is therefore possible that a similar set of circumstances could result in a different outcome.
Discrimination arising from disability – employer was liable when it reasonably but wrongly concluded that there was no link between the disability and the unfavourable treatment
In City of York Council v Grosset, a teacher who suffers from cystic fibrosis was dismissed for showing an 18-rated film to a class of 15 and 16 year olds. The employer had concluded, on the basis of medical evidence, that there was no link between the teacher's disability and the decision to show the film. The employee claimed unfair dismissal and disability discrimination. He did not succeed in his unfair dismissal claim, but the Tribunal upheld his claim for discrimination arising from disability (DAFD) on the basis of further medical evidence which did support a link between his condition and the decision to show the film.
The EAT upheld the Tribunal's decision. For a DAFD claim to succeed, there is a two stage test: first whether the disability results in “something” (here, the employee's decision to show the inappropriate film) and second, whether the claimant was treated unfavourably due to that “something”. That was the case here. The employee’s condition resulted in his decision to show the film and he was treated unfavourably due to that decision. It didn’t matter that the employer was reasonable in concluding, on the basis of the evidence available to it at the time, that there was no link between the two issues. Further, the lack of knowledge didn’t amount to justification: justification is an objective test and it was therefore possible for the Tribunal to reach a different decision to the employer on the basis of all the information available to it.
Although this is a correct application of the law, it is a harsh decision for employers. It means that employers can be guilty of disability discrimination where they have considered whether an act of misconduct is related to a disability and reasonably concluded on the basis of medical evidence that it is not. This decision highlights the importance of obtaining proper medical evidence before taking action in relation to disabled employees, but in this case, even that proved not to be enough.
Medical evidence not a prerequisite for making a personal injury award for discrimination
The EAT has held in Hampshire County Council v Wyatt that the Tribunal was entitled to make a personal injury award for depression in a disability discrimination case, despite there being no medical evidence presented by the employee. The employee was dyslexic and, therefore, disabled. She was suspended pending a disciplinary investigation and this led to her become depressed, which was also accepted as being a disability. She was ultimately dismissed as a result of her absence and brought a claim for disability discrimination and unfair dismissal. The Tribunal found that the way in which the employer treated the employee amounted to disability discrimination and she was awarded £15,000 for injury to feelings. In addition, however, she was awarded a further £10,000 for personal injury, on the basis that the depression was caused by discriminatory acts during the suspension process. On appeal, the EAT declined to reduce the personal injury award.
The making of a personal injury award in the absence of a medical evidence is, perhaps, alarming for employers. However, this case is unlikely to encourage employees to pursue personal injury damages on this basis. Indeed, the EAT confirmed that it is advisable for suitable medical evidence to be obtained by employees in these circumstances. However, in cases where the Claimant has not produced medical evidence, employers should consider whether it would be prudent to produce their own evidence, to negate the risk of similar awards being made.
Employment agency director fined
A director of an employment agency has been found guilty in the Magistrates’ Court of breaching the Conduct of Employment Agencies and Employment Businesses Regulations 2003.The charges related to the failure to provide workers with the necessary paperwork in relation to their employer and terms and conditions as well as withholding wages.The director was fined £16,000 and ordered to pay £16,979 towards prosecutions costs.
Illegal Working Compliance Orders Regulations 2016
Under new regulations which came into force on 1 December 2016, where an employer has already committed a criminal or civil immigration offence or has failed to pay an immigration penalty and is again found to be employing a person without the right to work in the UK, the employer will face the closure of its premises for up to 48 hours, pending the outcome of an application for an illegal working compliance order. Further regulations set out details of the steps which the employer will need to take to comply with the order.
Draft Finance Bill 2017
HMRC has published draft clauses for the Finance Bill 2017. The key issue of relevance to HR professionals is the proposed change to the tax treatment of termination payments. In particular, from 6 April 2018 all payments in lieu of notice, whether or not contractual, will be treated as earnings and will therefore be subject to income tax and national insurance contributions. There are also restrictions proposed in relation to salary sacrifice benefits and the abolition of tax relief for those who hold employee shareholder status. The draft legislation is open for consultation until 1 February 2017.