Employment Law Roundup – November 2018

Is an employer responsible for the actions of an employee who has ‘gone rogue’ and deliberately posted sensitive employee data online? Yes, the Court of Appeal has said in Morrisons v Various Claimants. Mr Skelton was an internal auditor at Morrisons. He had been recently disciplined and held a grudge against the company. He took sensitive personal data relating to thousands of employees and posted it online. He then told newspapers it was there. The data included names, bank details and salary information.

Mr Skelton was convicted of fraud and various other offences. He was sentenced to 8 years in prison. The employees sued Morrisons. Among other things, the employees claimed that Morrisons was vicariously liable for the actions of Mr Skelton in leaking the data.

The Court of Appeal agreed that Morrisons was vicariously liable. There was enough connection between Mr Skelton’s job role and the conduct in question. Mr Skelton’s motive (to cause harm to the employer) was irrelevant. The Court highlighted that to conclude otherwise might leave an individual who suffered financial loss (because of a data breach) with no recourse except against the perpetrator. The Court advised that employers should ensure against the risk of losses caused by dishonest or malicious employees.

This is a worrying case for employers. The safe storage of personal data is vital for employers. Insurance should be secured if it is not already in place. The actions of even the most trusted employees should be monitored. Particular attention should be paid to employees who might bear grudges due to recent disciplinary or grievance proceedings.

Harassment

Is it harassment to call an employee a ‘fat ginger pikey’? Not in Evans v Xactly the Employment Appeal Tribunal has said.  The employee was a sales executive with type 1 diabetes and links to the traveller community. He was dismissed for poor performance. He brought numerous claims under the Equality Act 2010, including ones for harassment linked to disability (regarding ‘fat’ comments which he linked to his diabetes) and race (for the ‘pikey’ comment which he attributed to his traveller community links).

The employment tribunal found that there was a culture of banter among the sales team. Certain comments could be deemed highly offensive in some workplaces, but the culture was different at Xactly. The employee was actively involved in the banter and was comfortable with the office culture and environment. The tribunal also found that Mr Evans had not complained at the time of the comment. They said he would have done if he had felt offended. The tribunal found there had been no harassment.

The Employment Appeal Tribunal agreed. The employment tribunal had gone through the facts in detail and clearly explained its reasoning. The context was key. The comments were not unwanted because the employee was actively involved in the culture of banter between colleagues. The comment did not have the purpose of creating an intimidating or hostile environment because it was light-hearted reciprocal banter. Nor had it created an intimidating environment because the facts showed that the employee was not offended. It was not reasonable for him to feel that his dignity had been violated.

Even the EAT judge, in this case, said it was surprising for the comment to escape a finding of harassment. However, such cases turn on their individual facts. Employers would be wise to address any inappropriate banter, however reciprocal it may appear.

Unfair dismissal

Should an employer always have a meeting before dismissing an employee for some other substantial reason (SOSR)? Not always, said the Employment Appeal Tribunal in Hawkes v Ausin Group.  The employer was a small business in its first year of trading. Mr Hawkes was one of only a handful of employees and its most senior. He was also a Royal Marine reservist.

The employee signed up for a voluntary 7-week training course. It was due to take place during a very busy period for the business. He initially presented the training as compulsory. It was only when his manager made enquiries of his commanding officer that she found out the course was voluntary. In the meantime, the employee had accepted a place on the course. Under military law he was now required to attend.

The employee made it clear he was attending the course. The business could not sustain his absence for 7 weeks. They called him to a meeting and dismissed him with immediate effect, paying him in lieu of notice. He brought an unfair dismissal claim, which he lost. He said there should have been an earlier meeting to discuss dismissal as he may have changed his mind. The employment tribunal said that an earlier meeting would not have changed anything because he had already decided to go on the course. The employee appealed to the Employment Appeal Tribunal.

The EAT said it was open to the tribunal to look at the facts and decide that an earlier meeting would not have made any difference.  SOSR dismissals are different from misconduct where it is usually necessary to hold a meeting to consider the employee’s explanation. The process followed was not unfair.

However, employers should guard against relying on this case as the facts are quite unusual. It is always best to hold a meeting to give an employee the opportunity to present their case before dismissal.

Vicarious liability

Is an employer liable for a drunken assault which happens after a work party has finished? Sometimes, said the Court of Appeal in Bellman v Northampton Recruitment. Mr Major was managing director of Northampton Recruitment. He recruited his childhood friend, Mr Bellman. After a works Christmas party, both men were part of a group who continued drinking in a hotel. The general conversation evolved into a discussion about work.

Mr Major became angry when his authority was challenged by Mr Bellman. He punched Mr Bellman twice. Mr Bellman fell onto a hard floor and sustained permanent brain damage. He sued the company, saying it was vicariously liable for the actions of Mr Major. The High Court said the drinking session was separate from the works party. There was an insufficient connection between Mr Major’s role as managing director and the assault. The company was not vicariously liable.

The Court of Appeal disagreed. They looked at the functions entrusted to Mr Major and asked if there was enough connection between that role and the assault. Mr Major’s remit and authority in the business were very wide. The drinks were not an impromptu after work event. They occurred after an event organised by Mr Major and paid for by the business. At the time of the assault, Mr Major was wearing his ‘MD hat’ and lecturing his staff about work.  The attack arose out of a misuse of his position as MD. There was enough connection between his role and the assault, and the business was vicariously liable for it.

The facts of this case are quite unusual. Employers will not usually be liable for work arguments between colleagues which lead to an assault. However, employers should ensure that managers and staff are properly trained to ensure that they behave professionally at work-related events.

Whistleblowing

Can co-workers be liable for whistleblowing dismissals along with the employer? Yes, the Court of Appeal has said in Timis v Osipov. Mr Osipov was the employer’s CEO. Two directors decided to dismiss him after he made protected disclosures. The employee brought claims against the company for whistleblower dismissal under section 103A of the Employment Rights Act 1996. He also brought claims against the directors (as well as the employer) under section 47B of the same Act for detriments which led to his dismissal.

Mr Osipov won his unfair dismissal claim against the employer (only an employer can be responsible for an unfair dismissal claim). He also won claims for detriment against both the employer and the directors. Together with the employer, the directors were jointly responsible for the losses flowing from the dismissal because it was caused by their detriments. The company became insolvent. Could the employee claim all the compensation from the directors, which amounted to over £2million?

The Court of Appeal said yes. The directors tried to use an exclusion contained in s47B(2), which excludes detriment claims that amount to unfair dismissal. The Court confirmed that a whistleblowing unfair dismissal claim should be brought under section 103 and not section 47B. But claims for detriment involving dismissal can still be brought against a co-worker under section 47B. If dismissal – the most serious of possible detriments – were excluded from the possible claims brought against a co-worker, it would make a mockery of the protection. It would create a situation where individuals would be better off dismissing a whistleblower than subjecting them to lesser detriments, to escape personal liability.

This case is concerning for employers, especially managers. Detriment claims against individuals relating to dismissals are rare. However, in small businesses or those with limited financial means, co-workers may be more vulnerable to claims. Employers should ensure systems are in place to manage protected disclosures properly and fairly.

The ‘Gay Cake’ case

Is it discriminatory for a devout Christian baker to refuse to bake a cake bearing the message ‘Support Gay Marriage’? No, the Supreme Court has said in Lee v Ashers Bakery. Mr Lee is a gay rights activist in Northern Ireland. He ordered a cake saying ‘Support Gay Marriage’. The bakery owners hold the Christian belief that marriage should take place only between a man and a woman. They refused to bake the cake. Mr Lee brought claims for discrimination on the grounds of sexual orientation and political belief (the latter based on his belief in gay marriage – Northern Ireland prohibits discrimination based on political opinion which the rest of the UK does not).

The Supreme Court said that refusing the order was not directly discriminatory on the grounds of sexual orientation. The bakery had not refused the order because Mr Lee was gay. They had served him many times before. The issue was the message and the bakery’s religious objection to gay marriage. The bakery would have refused the same order had it been requested by someone heterosexual. The less favourable treatment related to the message, not the man.

The bakery owners’ human rights under articles 9 and 10 the European Convention on Human Rights (freedom of religion and belief and freedom of expression) meant that they should not have to express a message with which they disagreed unless there was justification for doing so (i.e. it was necessary in a democratic society in pursuit of a legitimate aim).

Although this is not an employment case, the same legal principles apply to employers as to service providers. It is likely that people holding strong political or religious views will be bolstered by this case. Employees may be more likely to assert those views in the workplace.

Consultation on reforming employment law hearings

The Law Commission has issued a consultation paper on reforming the court structure for employment law and associated claims. It is seeking views on several issues including:

  • Extending limitation periods, in most cases from 3 to 6 months;
  • Revisiting the discretion to extend time limits in unfair dismissal cases;
  • Removing the £25,000 cap on breach of contract claims in employment tribunals; and
  • Allowing tribunals to hear breach of contract claims while the employee remains employed.

The Law Commission is only an advisory body and these changes may not happen. Have your say though, by 11 January 2019 right here. The questionnaire is long, but it is a box-ticking exercise with the option of making additional comments.

Causation in disability discrimination

In Sheikholeslami v University of Edinburgh, the employee went off sick after being diagnosed with stress and depression linked to workplace events. She raised a sex discrimination grievance whilst off sick which resulted in colleagues being told not to contact her. She requested a departmental move which was refused. She was then dismissed when she refused to return to work in the same department. The employer said the reason for the dismissal was her work permit expiring. The employee brought claims for failure to make reasonable adjustments and discrimination arising from disability in relation to her dismissal and the failure to consider a departmental move. She lost at the employment tribunal and appealed.

In relation to her reasonable adjustments claim, the EAT looked at whether the duty to make reasonable adjustments applied. They decided that the requirement to return to the same department placed the employee at a substantial disadvantage compared to other employees. Non-disabled people who could attend work would not have been at risk of dismissal. The requirement to return to a hostile environment following a discrimination grievance would bite more harshly on someone with a mental impairment than someone without that disability.

The EAT then looked at whether there had been unfavourable treatment arising in consequence of her disability. The employment tribunal found that the employee’s refusal to return to her current department was because of her grievance and not her disability. The EAT said the tribunal had applied the wrong test. The test was whether her refusal to return was a consequence of her disability, not because of it. The EAT said that the employee’s refusal related to several issues, including her relationship issues with colleagues, but they were also a consequence of her disability.

Both claims have been sent back to the employment tribunal for the correct tests to be applied to the facts. Employers should be aware that dealing with disabled employees is rarely clear-cut. Caution should be exercised to ensure the correct tests are applied.

Just and equitable extension of time

Can an employment tribunal refuse to extend the time limit for lodging a discrimination claim if it has misunderstood the chronology? No, the Employment Appeal Tribunal has said in Thompson v Ark Schools. Mrs Thompson was an Australian national. She was recruited as a teacher in the UK. When she told the employer she was pregnant, the job offer was withdrawn. The family home had already been sold and the family eventually emigrated to the UK. Ms Thompson then lodged claims for pregnancy and maternity discrimination several months late.

The employee asked the tribunal to extend the time limit on a ‘just and equitable’ basis. She argued it was fair to extend the time limit because she had suffered depression and anxiety during her pregnancy and she had not known about the time limit. She had lodged her claim very quickly when she found out about the time limit and the potential for an extension.

The employment tribunal said the employee should have and could have done more to lodge her claims more quickly. It was not just and equitable to extend time.

The Employment Appeal Tribunal disagreed. The employment tribunal had either made errors about the facts or failed to explain how it had reached its conclusions. It confused the order of events. It did not get to grips with the chronology and the very swift action that Ms Thompson took once she arrived in the UK. The decision not to extend time had to be unsafe if the findings of fact were confused. The appeal was allowed. The decision about whether to allow the extension of time will be decided by a different employment tribunal panel.

Unlawful deductions

Can an employment tribunal resolve disputes about the meaning of contractual terms when dealing with an unauthorised deduction from wages claim? Yes, the Court of Appeal has said in Agarwal v Cardiff University.

Dr Agarwal brought a claim for unauthorised deduction from wages against her employer. The tribunal said it could not hear her complaint because the parties did not agree about the pay terms in her contract. It would need to decide what her pay terms were before establishing if there had been any deduction. If the contract was unclear, the correct claim was for breach of contract in the county court (because employment tribunals cannot hear breach of contract claims brought during employment). The Employment Appeal Tribunal agreed.

The Court of Appeal disagreed. It confirmed that the employment tribunal can resolve a contractual dispute between employer and employee in order to decide whether a deduction has been made. This includes any question about the meaning of the contract. The employment tribunal and EAT had mistakenly followed case law which was not relevant to unauthorised deduction claims.

This is a common-sense decision. Tribunals must be able to make decisions about contractual terms. Otherwise, dealing with unauthorised deduction claims would be almost impossible except in the most clear-cut cases.

And finally…

Economist and workplace commentator Stephanie Hare has published ideas on why British productivity is so low – meetings. According to Ms Hare, conference calls and video conferencing are the worst offenders. Technical issues take up the first few minutes. Everyone gets settled and in blusters the obligatory latecomer and the whole thing starts over again.

Hare’s theory is that meetings often involve people who do not need to be there. Observers should be working somewhere else. She also says meetings are not organised enough. They often lack an agenda to keep things on track. They end without action points, so no one knows who is doing what.

Hare quotes Amazon’s Jeff Bezos, who keeps meetings small, bans PowerPoint and avoids meetings before 10am because he is not productive before then. The first portions of his meetings are spent reading the relevant papers, as he knows workers will not have done it. Hare also advises businesses to encourage reluctant speakers, and ensure women are first up in Q&A sessions. Research shows that more women will speak up if the first question or comment is offered by a woman.

Hare’s final tip is to seek honest feedback on meetings from attendees. If feedback is poor, cut numbers, tighten up agendas and ensure everyone is heard.