Employers should follow the Acas Code on grievances when handling whistleblowing disclosures; any failure to do so could lead to an uplift of up to 25% to the compensation award for whistleblowing claims. Employers with separate whistleblowing policies should check they comply with the Acas Code requirements.
The EAT in Ikejiaku v British Institute of Technology Ltd ruled that, although dismissal for making a protected disclosure is not covered by the disciplinary section of the statutory Acas Code of Practice on Disciplinary and Grievance Procedures, the disclosure will be a “concern, problem or complaint” covered by the grievance section of the Code. A failure to handle the disclosure in accordance with the grievance requirements of the Code could still lead to an uplift of up to 25% to the compensation awarded for automatically unfair dismissal.
The EAT also confirmed that the imposition of a new contract was a one-off act with continuing consequences and not a continuing act, so that the time limit for bringing a detriment claim ran from the imposition of the contract.
The Court of Appeal has confirmed that a dismissal will not be unfair simply because a decision to start disciplinary action is made before the investigation is complete. The Court stated that it may be necessary to suspend an employee as soon as investigations have discovered serious matters which are likely to be the subject of disciplinary action, even though the full investigation has not been completed. Continuing the investigation does not render the process unreasonable provided that the employee is given a full and fair opportunity (which could be at the disciplinary hearing) to engage with any new charges or new material which might emerge as a consequence.
Equally, the lack of formal hearing for the employee at the early investigatory stage did not render the process unfair on the facts, given that there were no significant disputed facts. (Sattar v Citibank NA)
A recent Supreme Court decision highlights the importance of a thorough investigation of the purported grounds for dismissing an employee, particularly if there could be reasons why a line manager might have engineered the grounds. The Court ruled in Royal Mail Group v Jhuti that, if a person in the hierarchy of responsibility above an employee determines that the employee should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason rather than the invented reason.
In this case the real reason for dismissal was a protected disclosure which had been hidden from the decision-maker by the employee’s line manager, who had fabricated performance concerns out of a desire for retribution. The employer was liable for an automatically unfair dismissal for whistleblowing, even though the decision-maker relied in good faith upon the invented reason of poor performance.
The principle in this decision will apply to all types of unfair dismissal claim, not just for whistleblowing. Decision-makers will need to be live to the possibility that the ostensible reason for disciplinary action presented to them may have been manufactured by a line manager to hide another reason. The case highlights the importance of interviewing the employee and following up on any suggestions of a hidden motive on the part of any line managers involved in instigating the disciplinary process or providing evidence. In this case the decision-maker was appointed to ‘review’ the evidence rather than investigate matters for herself. She had failed to interview the claimant (as she was unwell) and had relied on the line manager’s assurances that the claimant had accepted that her original whistleblowing disclosures were based on a misunderstanding (when in fact she had been put under intense pressure to say she accepted this). It would also be prudent for HR to consider whether relevant background, such as earlier whistleblowing disclosures or grievances or other potential reasons for personal animosity on the part of a relevant manager, should be brought to the decision-maker’s attention to take into account.
Manipulation carried out by an employee at the same level or lower than the claimant will not impact on what is deemed to be the reason for dismissal. However, employers should also bear in mind that the motivation of someone who is not the decision-maker but who is involved in investigating the disciplinary charge may be attributed to the employer. Further, even if a manipulator’s actions are not attributed to the employer in determining the reason for dismissal, the dismissed employee may have a detriment claim against the manipulator, for which the employer is likely to be vicariously liable.
The Employment Appeal Tribunal has ruled that covert recording by an employee will not always be a breach of the implied duty of trust and confidence. It will normally amount to misconduct, but will not automatically be gross misconduct justifying dismissal. Relevant factors will include the purpose of the recording, which “may vary widely from the highly manipulative employee seeking to entrap the employer to the confused and vulnerable employee seeking to keep a record or guard against misrepresentation”. It might also be that an employee wishes to conceal a disability which makes it difficult for them to accurately recall conversations. Whether the employee has contravened an express instruction not to record or lied about doing so will also be relevant, as will the subject-matter of the recording. If highly confidential information or personal information relating to another employee is discussed, this is more likely to involve a breach than where the discussion relates to matters concerning the employee of which a note would normally be kept and shared. Finally, “any evidence of the attitude of the employer to such conduct” will be relevant, including whether and how the issue is addressed in any disciplinary policy.
The EAT also commented that it is good practice to discuss at the start of a meeting whether it would be desirable to record it, noting that sometimes recording will inhibit a frank exchange of views and that, for long meetings, a summary or note will be of more value.
Employers may wish to review their approach to this issue and ensure that disciplinary policies make clear whether recording carried out covertly or without express written consent amounts to gross misconduct. It would also be prudent to ensure managers state at the beginning of any investigatory, disciplinary or grievance hearing if recording is not permitted and ask the employee to confirm they are not doing so; where a meeting is adjourned for the panel’s private deliberations to continue, managers should check that the employee has not left any possessions in the room. (Phoenix House Ltd v Stockman)
Managers hearing internal appeals should be reminded of the importance of taking into account any new information or evidence that comes to light after an initial decision to dismiss but before the appeal hearing, particularly where that information relates to being disabled. This could mean adjourning to obtain medical evidence where appropriate.
In Baldeh v Churches Housing Association of Dudley and District Ltd, an employee dismissed for poor performance only disclosed that she suffered from depression, which affected her performance, at the appeal hearing. The EAT ruled that the tribunal had been wrong to reject her claim that the dismissal was disability discrimination simply because the employer had no actual or constructive knowledge of the disability at the time of the decision to dismiss, given it arguably did have such knowledge at the time of appeal and the appeal was an integral part of the dismissal.
The judgment also underlined that a claim of discriminatory dismissal because of “something arising in consequence of the disability” need only establish that the “something” had a material influence on the employer’s decision to dismiss and not that it was the sole or main reason. The case was remitted to be reheard.
Two recent English decisions highlight the particular challenges when managing legal professional privilege in the context of resolving employee issues. We consider these decisions and how the principles may apply in Hong Kong in relation to dominant purpose, waiver and iniquity and the lessons that they provide to employers in the context of employee investigations and disciplinary actions. Continue reading
The Court of Appeal has ruled that suspension pending a disciplinary investigation does not breach an employer’s implied duty of trust and confidence, provided the employer has ‘reasonable and proper cause’. An employer does not need to establish that it is ‘necessary’ to suspend and it will not be determinative whether the act of suspension has been described as a neutral act (indeed the Court considered it was neither helpful nor relevant to consider the question of whether or not suspension can be described as a neutral act). Whether there is reasonable and proper cause will be highly-fact specific; it may be easier to establish this where the employee works with young or vulnerable individuals and there is a serious allegation supported by witness evidence to investigate (as in this case). The wider context beyond the fact and manner of suspension, including the events preceding the suspension and the extent to which a suspension is a ‘knee-jerk’ reaction, will be relevant. (London Borough of Lambeth v Agoreyo)
The case highlights the importance of considering whether there is sufficient justification for suspension; relevant factors will include the seriousness of the alleged misconduct and whether the investigation might be prejudiced (eg by interference with witnesses or destruction of documents) if the employee remains at work. An employer should also consider whether other options, such as working from home, would be feasible and appropriate, and document this consideration. Suspension should be for as short a period as possible, the decision to suspend should be reviewed regularly, and suspension should be paid unless there is an express contractual right to suspend without pay. Although not determinative of whether suspension is justified on the facts, it is also prudent to make clear to the employee that suspension is ‘neutral’ and not considered a disciplinary action. Care should also be taken when communicating with staff and clients about the reason for the employee’s absence, including to ensure this does not betray any assumption of guilt prior to conclusion of the disciplinary process.
On 15 December 2018, Decree No. 148/2018/ND-CP (“Decree No. 148”) came into effect. Decree No. 148 introduced amendments to Decree No. 05/2015/ND-CP, the legislation designed to provide guidance on the implementation of the Labor Code. The key changes are explained below. Continue reading
In many industries, it is a requirement that certain individuals performing regulated activities are, and remain, fit and proper. For example, these requirements will apply to certain individuals who are subject to the oversight of financial services regulators such as the Hong Kong Monetary Authority, the Securities and Futures Commission (SFC) or the Insurance Authority. Assessing whether an individual is fit and proper however, is not always straightforward. Issues which, on their face, may not seem to be compliance risks could in fact be so when viewed through the lens of the fit and proper test.
Under PRC law, an employment contract can be terminated in three main ways, namely resignation by the employee, unilateral termination by the employer, or mutual separation. While resignation by the employee is generally straightforward, while other paths to termination must be manged carefully to mitigate risk. We recap the key points to consider with each approach to termination.