03 August 2011 #Employment
As we are now over half way through 2011, we take a look back at some of our favourite cases so far this year. It`s perhaps a sign of the times that these involve redundancies, company administrations, and the use of social media as well as tricky questions of a philosophical nature..
Alternative employment & subjective selection criteria
The EAT upheld a Tribunal`s decision in January, that it was fair for an employer to apply subjective selection criteria when deciding which potentially redundant employee should be offered alternative employment.
In Morgan v The Welsh Rugby Union (2011) when Mr Morgan`s post was made redundant following a business reorganisation he, along with three other candidates, was interviewed for a new post created as part of the restructure. Whilst the interview panel considered that Mr Morgan was capable of doing the job, it appointed another candidate who had impressed them more in interview. Mr Morgan claimed unfair dismissal as his qualifications and experience were better than the successful candidate.
In upholding the Tribunal decision, the EAT confirmed that whilst the selection of employees for redundancy should be based on objective criteria, this was not the case when choosing which employee to offer alternative employment to. The interview process can be competitive and the employer is ultimately entitled to appoint the candidate it considers best for the job, even if that view is subjective.
Confidentiality & breach of contract
In Brandeaux Advisers (UK) Ltd and others v Chadwick, the High Court considered whether an employee who sent large amounts of confidential information to her personal email account was in breach of contract. The employee claimed she had transferred the confidential material to protect herself, in the event of possible future litigation with her employers. She argued that she was entitled to do this ‘as a matter of law and necessity`.
The High Court doubted that the possibility of future litigation could ever justify the transfer of an employer`s confidential information. Consequently, the employee`s conduct was a repudiatory breach of her employment contract that justified her dismissal.
Following this case, we recommended that employers checked their Email and Internet Use Polices to ensure that they cover the transfer of company information to personal email accounts and to set out the sanction that may be applied if employees do so.
TUPE & company administrations
Where a company has gone into administration, any dismissals in connection with the transfer will be automatically unfair. This is the position following the EAT ruling in OTG Limited v Barke and others (2011) back in February.
Previously, in Oakland v Wellswood (Yorkshire) Limited, the EAT held that where a company had entered into administration and there was a business transfer, the Tribunal would examine if the administration was with a view to liquidation. If it was with a view to liquidation, dismissals in connection with the transfer could be fair. However, in OTG Limited the EAT decided that if administration proceedings are commenced, then the administration proceedings cannot be regarded as being "bankruptcy proceedings", and therefore dismissals in connection with the transfer will be automatically unfair.
The case concerns Regulation 8 of TUPE 2006 which states under Reg 8(7) that where the transferor is the subject of "bankruptcy proceedings....with a view to the liquidation of the assets of the transferor" the employees will not automatically transfer to the transferee. However under Reg 8(6), if there are relevant insolvency proceedings which are "not with a view to the liquidation of the assets of the transferor..." then the employees will transfer to the transferee and receive unfair dismissal protection. Essentially the EAT has reached the view that administration proceedings can never attract Reg 8(7).
It needs to be noted that this decision does not come from a higher court, but a subsequent decision of the EAT. However, given that this is a more recent decision, there is a good chance that this ruling will be followed in subsequent cases.
Anti-fox hunting stance deemed a "philosophical belief"
In Hashman v Milton Park (Dorset) Ltd t/a Orchard Park (2011) an employment Tribunal held that a belief in the sanctity of life, extending to a fervent anti-fox hunting belief, constituted a philosophical belief for the purposes of the Religion or Belief Regulations (now enshrined in the Equality Act 2010). However, the Tribunal stressed that its decision was very much based on the facts of the case and did not mean that all opponents of fox hunting would be protected by the law in this way. Mr Hashman`s evidence convinced the Tribunal that his beliefs affected every aspect of his daily life.
A philosophical belief too far?
Hot on the heels of the fox-hunting case in March, came the case of Maistry v BBC (2011). In this case, the employment Tribunal ruled that a belief in the "higher purpose" of public sector broadcasting, to encourage debate and citizenship in a public space, was a philosophical belief that qualified for protection. The judge was influenced by the "strength of the claimant`s feelings". He commented that the Claimant`s belief was "clearly of great personal significance to him", given his experience of being a journalist during apartheid in South Africa.
This case left us in an uncertain situation, as people are `passionate` about many different ideas! The requirement (set out in earlier case law) for a belief to have a "similar status or cogency to a religious belief" seemed to have been eroded. Such a shift was perhaps not surprising, given the removal of the word `similar` from the legislation (previously the protection was for "religious belief or similar philosophical belief"). However, see the July case of Farrell v South Yorkshire Policy Authority (2011) below.
Facebook dismissal fair
Facebook, YouTube, Twitter etc. are the public meeting places of the 21st century. Such virtual communities are spaces where a whole generation can express themselves and form networks like never before. However, as the case of Preece v JD Wetherspoons plc (2011) highlighted back in April, a space for personal expression can easily become public in cyberspace.
In this case, the dismissal of a pub manager for gross misconduct, following inappropriate comments she made on Facebook about some customers who had verbally abused her, was upheld by the Employment Tribunal. The conversation on Facebook had taken place whilst Ms Preece was at work and was in breach of the company`s e-mail and internet policy. Ms Preece`s privacy settings meant that a wide audience was able to view her Facebook page, including the customers in question, risking the reputation of her employer.
This case highlights the importance of having in place a policy regarding the use of social media by staff. Full members of Buddy can access our Social Media Policy here.
Redundancy scoring & maternity leave
In Eversheds Legal Services Ltd v De Belin (2011), the EAT held that a law firm had unlawfully discriminated against a male associate on the grounds of his sex, by favouring a female colleague on maternity leave, in a redundancy scoring exercise. The EAT stated that the obligation to protect employees who are pregnant or on maternity leave cannot mean favouring them beyond what is `reasonably necessary to compensate them for the disadvantages occasioned by their condition`. Where a maternity or pregnancy benefit is disproportionate - as it was here, since less discriminatory alternatives were available - a disadvantaged colleague may claim sex discrimination.
This case emphasised that in attempting to avoid discriminating against pregnant women employer`s can unintentionally end up facing sex discrimination claims by men. In practice, employers should identify any special treatment afforded to women on maternity leave and consider whether there are more proportionate ways of removing disadvantage. Simply giving women on maternity leave the benefit of the doubt in assessments may result in successful claims of sex discrimination from male employees who lose out.
Negligent comments about ex-employees
It is established law that an employee may make a claim for damages following a negligent reference prepared by a former employer. In May, this principle was extended beyond references.
The High Court in McKie v Swindon College (2011), held that an employer may be liable in damages to ex-employees for any negligent statement made to subsequent employers. Mr McKie had taken up a new post at the University of Bath. Shortly after his appointment, the director of HR of his former employer, Swindon College, emailed the university with serious allegations about Mr McKie. As a result of this email, Mr McKie was summarily dismissed from his new post.
The High Court was satisfied that the contents of the email were untrue. Although it was not a reference, the Court held that Swindon College still owed a duty of care towards Mr McKie, which it breached when it supplied this statement, ultimately costing Mr McKie his job.
Offensive email from home computer
It is usually unfair to discipline an employee for conduct outside work, unless that conduct affects their work e.g. where the behaviour damages the employer`s reputation. Whether it is then fair to discipline or dismiss depends on many factors, including the nature of the employee`s job and the terms of any applicable policy.
Just last month, in Gosden v Lifeline Project Ltd (2011) the Tribunal found that the employer was entitled to dismiss an employee for gross misconduct for sending a racist email from his home computer, to a colleague`s personal computer, when that email was subsequently forwarded on to other employees at their work email addresses. As well as being racist, the email contained nude pictures of women and informed the reader it was their duty to pass it on.
Mr Gosden argued that the email that he had sent was a private matter and therefore his dismissal was unfair. The Tribunal disagreed. The email clearly stated that it should be passed on and so he should reasonably have expected it to have been forwarded. The Tribunal concluded that a reasonable employer would be entitled to conclude that Mr Gosden had committed an act of gross misconduct that could damage the company`s reputation or integrity. The decision to dismiss was therefore within the band of reasonable responses.
Conspiracy theory not a philosophical belief
Following on from the anti fox-hunting case in March and subsequent public broadcasting case in April, employers will be relieved that in July an employee failed to convince a Tribunal that his belief that the US and UK Governments were behind the terrorist attacks of 9/11 and 7/7, amounted to a "philosophical belief" (Farrell v South Yorkshire Policy Authority (2011)). Despite the employee`s beliefs being strong and genuine, this alone was not enough for the Tribunal. According to the Tribunal, Mr Farrell`s beliefs were neither cogent nor coherent, as his evidence revealed numerous inconsistencies and contradictions in those beliefs.
Whilst each case concerning philosophical beliefs will be decided on their own facts, it seems that for now at least, the requirement for that belief to be "cogent and coherent" is still relevant.
Equal pay, red-circling & TUPE
Under TUPE, transferring employees have the right retain their existing terms of employment. This can lead to problems under the Equal Pay legislation as it can result in a pay disparity between men and women.
Last month, however, the EAT in Skills Development Scotland v Buchanan (2011) held that "red-circling" an individual`s pay, to comply with TUPE, can amount to a genuine material factor defence to an equal pay claim, where this results in a disparity in pay between a man and a woman.
Moreover, the employer is under no duty to narrow the pay gap after the transfer (e.g. by freezing the transferred employees` pay) provided that any decision to award subsequent pay rises to all staff (thus continuing the pay gap) is not tainted by sex. In other words, it will be a defence to an equal pay claim where the TUPE transfer was and remains the main cause of the pay disparity and it had nothing to do with sex.