Employment law update – October 2020LexLeyton
Latest Government Developments
Whether you call it a second wave or one continuous storm, Covid-19 is at the forefront of every employer’s mind as we enter Autumn. Once again, the government has said employees should work from home if they can, in stark relief to the summer push to get them back in the office. More staff in sectors such as retail and hospitality must now wear masks to stem the rise in infections. Hospitality businesses, such as pubs and restaurants, must shut by 10pm. But the big news for employers came via Rishi Sunak’s Job Support Scheme (JSS) as part of his Winter Economy Plan. It is aimed at safeguarding viable jobs in those sectors of the economy which will struggle over the winter months because of the pandemic.
The JSS will run for 6 months from 1 November 2020. Where the business remains open, an employee will need to work at least a third (33 per cent) of their normal hours and the employer must pay them for those hours. The remaining two thirds (or 66 per cent) of an employee’s hours are then split again into 3: the government will pay for one third of the remaining hours (22% of their overall contractual hours) and the employer must pay for another third (22%). This means an employee will receive 77% of pay. The government grant is based on the employee’s usual salary, but their contribution will be capped at £697.92 per month. The employer will be reimbursed in arrears for the government contribution.
Only small and medium businesses can take part in this scheme (bigger businesses can take advantage only if their turnover has fallen during the pandemic and the government does not expect them to pay out dividends or similar capital distributions whilst using the JSS). Any small or medium business can use the JSS even if they haven’t previously used the furlough scheme.
However, if the business has been closed down under national or local lockdown rules, a different scheme will apply. In this situation, the government will pay two thirds of the employees’ salaries, up to a maximum of £2,100 per month. Employers will not be required to contribute towards wages and will only be asked to cover NIC and pension contributions. To be eligible, the employees must be off work for a minimum of seven consecutive days.
No doubt there will be more guidance on the scheme in due course so keep an eye out for the finer detail. Whether the current situation is a tiny ripple or a raging storm, this could be the lifeline that some SMEs need to help them ride out this wave over the winter.
For a dismissal to be fair, an employer needs to have a potentially fair reason to dismiss – such as misconduct, redundancy or ‘some other substantial reason’ (SOSR) – and the decision to dismiss must be within the range of reasonable responses. In cases where an employer’s reputation may be at risk, conduct and SOSR can overlap. The Employment Appeal Tribunal has looked at this issue recently in K v L.
A teacher was charged with possessing indecent images of children, but he denied being responsible for them. He was suspended from work pending investigation. The Procurator Fiscal (the Scottish equivalent of the CPS) decided not to prosecute. The police evidence provided to the employer was redacted beyond use, so it wasn’t given to the disciplining officer. The employer concluded that there wasn’t enough evidence to show the employee was responsible for downloading the images. However, he was dismissed for misconduct and the potential risk he posed to children. The dismissal letter also cited the risk of reputational damage which hadn’t been part of the hearing.
The employee claimed unfair dismissal. He lost at the employment tribunal, but the Employment Appeal Tribunal overturned that decision. The EAT said that dismissing for reputational damage wasn’t fair because the employee had not been given an opportunity to address those allegations at the disciplinary hearing. They also said that the decision to dismiss on conduct grounds was flawed: an employer must be satisfied on the balance of probabilities that the employee committed the offence in question. The disciplining officer had said there wasn’t enough evidence to make out misconduct, so the decision to dismiss on conduct grounds was not reasonable. The EAT went on to look at whether the employee could have been fairly dismissed for SOSR if the employer had pursued reputational damage as the reason for dismissal. They referred to a previous case called Leach v Ofcom, where a reputational damage dismissal had been fair. The EAT said this case was very different from Leach. In Leach, there was detailed information from the police to support the allegations, which there wasn’t in this case. The employer in Leach investigated the police evidence rather than simply accepting it – there wasn’t that opportunity in this case as there was no comparable police evidence. In Leach there was existing press interest in the case, and a real risk of adverse press coverage, which wasn’t present here.
It’s hard to believe that it could ever be unfair to dismiss a teacher when indecent images of children are found on devices in their home. But this case shows the importance of an evidence base for these decisions, both in relation to misconduct and any risk of reputational damage. Employees must also be given an opportunity to deal with all relevant issues at the disciplinary hearing for a dismissal to be fair.
In order to qualify as a disability under the Equality Act 2010, an impairment must have a substantial and long-term adverse effect on an individual’s ability to do day to day activities. In order to be long term, a substantial adverse effect must have lasted, or be likely to last, at least 12 months, or be likely to recur. A tribunal will look at medical evidence and the employee’s own witness evidence about the effects of their impairment. But they will also look at other evidence, including the employer’s, if that is relevant.
In Sullivan v Bury Street Capital Limited, the employee was a sales executive in a small company. In 2013, he suffered paranoid delusions that he was being stalked by a Russian gang following a split from a Ukrainian partner. He had previously had issues with timekeeping, attendance and record keeping, but the delusions made this worse. The employee sought treatment and his condition improved, so much so that his boss invited him on an important business meeting to New York in September 2013. In April 2017, his delusions began having a greater impact on him. He was eventually dismissed in September 2017 due to his capability and attitude. He claimed unfair dismissal and disability discrimination, saying his paranoid delusions had had a substantial adverse effect from 2013. At the hearing, a joint medical expert confirmed this, although conceded that he couldn’t be sure about the effects as he was relying on the employee’s account.
The employment tribunal overrode the medical evidence and said the employee was not disabled. The employee said the delusions had such an impact during the whole period that he would arrive at work exhausted, struggle to stay awake and couldn’t concentrate on work. He said it affected his personal hygiene. But the tribunal preferred the evidence from the employee’s boss and a colleague who sat close to him in the office. The colleague didn’t know anything about the delusions despite working alongside him for many years, and said the employee was exaggerating his symptoms. In evidence, the employee conceded he showered daily, flying in the face of his own witness statement on personal hygiene. The tribunal said the delusions had a substantial adverse effect for a few months in 2013 and then again in 2017 but at neither point was the effect likely to last 12 months or recur. The employee appealed but the EAT upheld the decision. They said the tribunal was at liberty to weigh up all the evidence, including but not limited to medical evidence, and arrive at its own decision.
This case confirms the position that legal disability is a question for the tribunal rather than a doctor. This is something which is often misunderstood by both employers and employees. Medical evidence is just one piece of the puzzle. In this case, the employee chose to rely on effects that his impairment had on him at work. This could be directly countered by colleagues who were around him and, together with inconsistencies in the employee’s own evidence, were fatal to his disability assertions.
The current uncertainty around jobs can cause friction between employers and their employees. In such times, many employees call on their trade unions for support. Unions are keen to stamp their mark, not only to protect existing members but to capitalise on an industrial crisis and turn it into a recruitment drive. Section 161 of the Trade Union and Labour Relations Act 1992 allows an employee to claim interim relief if they believe they have been automatically unfairly dismissed due to trade union membership or activities. If an employee can show they are likely to succeed in a claim for unfair dismissal due to trade union activities, then a tribunal will reinstate them pending a full hearing of the case.
In Morales v Premier Fruits, the employer was a fruit and vegetable wholesaler whose business had been ravaged by Covid. In May 2020, they asked employees to take a 25 per cent pay cut. The employee, Morales, refused and got his trade union to lodge a grievance on his behalf. A staff meeting took place from which the employee was excluded. It was recorded by a colleague. The manager could be heard making derogatory remarks aimed at the employee and his union activities, expressing views that were ‘strongly critical of trade unions’. The man who recorded the meeting was dismissed three days later. The employee continued to refuse the pay cut and was eventually dismissed in July, shortly after the grievance process had concluded.
Although the tribunal said that a full tribunal hearing will ultimately decide why the employee was dismissed, the judge said the employee had a ‘pretty good chance of success’ in showing that it was down to his trade union involvement. The recorded meeting’s transcript showed clear irritation that the employee had involved his union. The tribunal also felt the sacking of the person who had recorded the meeting was relevant. The employer hasn’t lost the case yet, but the employee has now been reinstated pending a full hearing, after the employer indicated they would consent to it.
This case shows the importance of keeping your cool even when the waters are boiling. With a ravaged business and plunging profits, the employer in this case had every reason to seek to reduce its outgoings. Its mistake was reacting badly to the involvement of the employee’s trade union and being openly disparaging about unions and their activities in a staff meeting. However pressurised the economic environment, managers and businesses must behave professionally in relation to both employees and their trade unions. Showing your frustration, however understandable, can land you in hot water.
This month the High Court has looked at the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 and their relevance in internal disciplinary proceedings. In Kathryn Hopkins v HMRC, the employee was arrested in connection with various offences, including sexual offences and an offence which took place in a work vehicle. As required by her contract of employment, she told her manager about the arrest. The manager then shared that information with various internal departments, including HR (in relation to pursuing disciplinary proceedings) and the press office (to manage any negative publicity). The employee was suspended pending a disciplinary process for gross misconduct. The employee’s contract of employment included terms involving appropriate behaviour outside of work and conduct which could give rise to queries about honesty and trust.
The employee went off on long term sick leave and refused to open or read correspondence from the employer. She said the internal investigation into the alleged offences was in breach of data protection laws and should stop. The process was briefly halted but continued after the employer sought legal advice saying it could press on. The employee complained to the Information Commissioner’s Office and then brought claims in the High Court for, among other things, data protection breaches by the employer for ‘processing’ the information about her arrest both internally and externally.
The High Court said the employer had a lawful basis for processing the special category data about the employee’s arrest when it suspended her and started disciplinary proceedings. The processing in question was necessary for the performance of her contract of employment and the employer had, as it was required to, an appropriate data protection policy in place to which the employee had access.
This case shows how data protection laws can be relevant in disciplinary proceedings and the sharing of information internally to facilitate that process. It is also a case which exemplifies the lengths to which an employee will go to avoid a disciplinary process. Employers must ensure they follow the rules: an effective compliant data protection policy is vital here. Employers must also ensure they identify a lawful basis for processing (in this case it was necessary for the performance of the employment contract) and maintain appropriate records. But employers should not be cowed by an employee who adopts a scattergun approach to imagined legal breaches in a bid to avoid facing the music.
The EAT has issued some guidance on written pleadings which will make employers breathe a sigh of relief. All too often, employment tribunal claims run to several pages, documenting several years of alleged ill treatment, often without stipulating a single legal claim. The EAT has provided its wisdom in a case called C v D, where the employee had brought a claim for discrimination which ran to 37 paragraphs over 6 pages.
The claim form provided a narrative account of the alleged discrimination. It referred to two different protected characteristics but didn’t say which facts related to which characteristic. Nor did the employee say what type of discrimination was being claimed. The employer replied in narrative style, requesting further information, which the employee provided. When that further information arrived, the employer said the employee was raising new claims and new facts which would now be out of time. An employment tribunal judge refused to allow certain amendments to the claim, so the employee appealed.
As part of her reasoning, the EAT judge discouraged the use of ‘narrative’ pleadings and encouraged legal representatives to use more succinct and clear drafting. Claim forms are not witness statements. They should set out a brief statement of the relevant facts and then the cause of action relied on, such as unfair dismissal or the specific discrimination claim (direct, indirect, discrimination arising from disability, etc) rather than just saying ‘I have been discriminated against’. Witness statements are the place to set out the exhaustive factual detail if it is relevant. This case showed all too clearly what happens if claims lack sufficient legal precision: costs increase (because of the extra hearings and work entailed), time is lost, and delay is inevitable.
There is a balance to be struck here, both in claim forms and responding to them. Sufficient factual basis to support a claim or response, but not too much. The difficulty in striking that balance is the reason many pleadings are overly verbose. There is definitely merit in getting someone legally qualified to draft pleadings, so that this balance can be properly struck, and legal proceedings get off to a good start.
Privacy at work
Article 8 of the European Convention on Human Rights says that everyone has the right to respect for private and family life, their home and correspondence. Public authorities are not allowed to interfere with that except in exceptional circumstances such as national security, public safety or the prevention of crime. Employment tribunals, like all courts, must construe employment law in a way which is compatible with the ECHR. But how far does this right to privacy go, and what kind of things can trump it?
In BC V Chief Constable of the Police Service of Scotland, police officers signed up to a code of professional conduct. The code applied both on and off duty due to the public nature of their jobs. The code said officers must not behave in a way which interferes with the ‘impartial discharge’ of their duties or gives the impression of partiality. The Police Service of Scotland (PSS) conducted an investigation into sexual offences within the police force. As part of the investigation, private WhatsApp messages from groups chats between officers were found, containing racist, sexist, anti-Semitic, homophobic and disablist comments, as well as photos of crimes scenes in breach of police procedures. The PSS brought misconduct charges against numerous officers. The officers retaliated with a claim alleging that the misconduct proceedings based on private WhatsApps breached their right to privacy.
The Inner House of the Court of Session (a Scottish appeal court) found that there was no reasonable expectation of privacy for police officers in relation to the private messages. They were holders of public office and had signed up to certain restrictions on their private life. In addition, all the officers involved were under a contractual duty to report the behaviour of colleagues whose behaviour had fallen short of the code of conduct. It was also relevant that the messages had been discovered openly as part of a criminal investigation rather than in a covert manner. The court disagreed with the officers’ contention that the messages could only be used in the prevention of crime. There was a clear public interest in maintaining a properly regulated police force in which the public could have confidence. That objective was enough to justify the restriction on the officers’ Article 8 privacy rights.
This decision accords with other employment cases where tribunals have refused to find a reasonable expectation of privacy in relation to comments made on social media or in work related emails. However, to my knowledge, it is the first case involving WhatsApp messages sent from personal accounts. Although this case involves public sector employees, the same principles may well apply to any employees who are subject to professional standards where the messages in question suggest a breach of those standards in a way which might impact on public confidence in that field.
Tracking workers hours
Are you worried about your homeworkers kicking back during the pandemic? Shibu Philips, founder of London-based beauty business Transcend, has told the BBC he has been using Hubstaff software in order to monitor what his employees are doing. He says he knows only too well what its like to waste time at work. The software allows him to track his workers’ hours, keystrokes, mouse movements and websites. He can look at screenshots and see how much time workers are taking on tasks. Employees are fully aware of the software and can delete websites visited during breaks.
The pandemic has created a big demand for this and other kinds of surveillance software. Employers worry that a lack of visibility will impact on employee productivity. Understandably, they want to protect their businesses at what is a crunch time for many. But is software the way forward? Employees have also struggled during the pandemic, worried about their health and families as well as their jobs and future prospects. Introducing monitoring software during a crisis could damage employee trust and confidence at a time when you want to retain your very best people to see you through the crisis. Surveillance software isn’t fool proof – it can’t record thinking time or the creative process in any meaningful way.
Instead of software, consider whether some TLC might be a better way to go. Make sure managers are checking in regularly with staff, not only to monitor work but to check on wellbeing. Filter out and deal with any genuine shirkers as you would normally if they took a three-hour lunch. The human touch can be more sensitive than software, and carrots invariably work better than sticks with the employees you want to keep. And remember, if you do use surveillance software to monitor staff, have a clear policy, get employees to explicitly agree to its terms and make sure it is used proportionately.Extra articles
ACAS has joined forces with the TUC and CBI to issue a statement on how best to handle redundancies stemming from the Covid pandemic. They recognise that redundancies may be unavoidable for some businesses but ask employers to try all possible alternatives first. Ideas include more part time working, cuts to overtime, finding alternative roles for some staff and retraining others. They ask employers to consider the following guidance and do what they can to look after their people as well as their business:
Do it openly: following collective consultation requirements is key but early open discussions about potential redundancies is better for everyone.
Do it thoroughly: make sure that the people carrying out your redundancy process have been trained in how to handle it properly. They need to know the processes they must follow and the legal hoops they need to jump through. Everyone involved needs information and guidance, so they can pass that information onto the affected employees.
Do it genuinely: don’t just go through the motions. Consultation involves genuinely listening to employee and union views and being open to alternatives they put forward. Give feedback if you reject their ideas so they understand why.
Do it fairly: as with any process, following a fair procedure is key and any process must be free of discrimination
Do it with dignity: losing your job can be a devastating and traumatic experience. How an employer approaches redundancy can change the way someone views both their position and the company. Be kind in your conversations and correspondence, not only for the benefit of employees but in case you want to rehire them in future.
The ACAS guide to redundancy can be found at https://www.acas.org.uk/redundancy
Unlike the civil courts, costs (including legal fees) are not usually paid by the losing party in employment tribunal cases. Costs can be awarded by a tribunal if one of the parties has behaved vexatiously, disruptively, abusively or otherwise unreasonably in bringing proceedings or the way they have conducted themselves during those proceedings. A costs order might also be made if a claim is pursued (or defended) despite the claim/defence having no reasonable prospect of success. They are rare, so are big news when they happen, especially when the sums involved are large.
An employment tribunal has awarded what is believed to be the largest costs award against an employee who used to work for Millennium and Copthorne Hotels as Senior Vice President of Global Procurement. Chee Hwee Tan was made redundant and brought a whole raft of claims against his employer including unfair dismissal, discrimination based on race, age and sexual orientation, whistleblowing detriment and unlawful deduction from wages. Hedging his bets did not pay off for this employee.
The employment tribunal dismissed all the employee’s claims. They found that the employee had been ‘duplicitous’ and acted in a way which undermined trust and confidence when he secretly recorded conversations with colleagues. The tribunal made an order for costs because his claims had been vexatious. The employee now must pay £432,000 to the employer to cover the costs of defending those spurious claims.
Costs awards are rare, and usually average only a few thousand pounds, so the pressure on the employer to settle these spurious claims must have been huge. They held their nerve and it paid off. This case doesn’t create any new law, but it does show that tribunals are willing to make costs orders in the right cases, even if those costs are very high.