UK: Acas Code on disciplinary procedures may apply to more types of dismissal than employers expect

Employers would be well-advised to comply with the procedural steps set out in the Acas Code of Practice on Disciplinary and Grievance Procedures when dismissing, unless they can be confident that the tribunal will accept that the reason for dismissal is not within the ambit of the Code.  The Acas Code explicitly excludes dismissals on grounds of redundancy or the non-renewal of a fixed-term contract.  However, in Rentplus UK Ltd v Coulson the tribunal found that the employer’s purported reason of redundancy was a sham (given the decision had been made to dismiss the claimant over a year earlier, as part of an agreement with the person taking over as CEO), that the dismissal amounted to sex discrimination and that the award should be increased by 25% for breach of the Acas Code.

The employer’s argument on appeal, that this was not a “disciplinary situation” to which the Acas Code applied, was rejected.  The EAT considered that the tribunal must have concluded that the employer had taken against the claimant and decided to get rid of her because of dissatisfaction with her personally and/or how she was performing her role. It was inherently implausible that the tribunal concluded that the respondent wanted rid of the claimant because she was a woman, rather than believing that there were problems with her capability and/or conduct, that belief being tainted by sex discrimination. It was therefore implicit in the reasoning of the employment tribunal that the claimant was in a “disciplinary situation” to which a fair capability or disciplinary procedure should have applied.  The tribunal’s comment that this was not a “disguised capability dismissal” should be read as simply making the point that there was no issue with the claimant’s capability that could have resulted in a fair dismissal.

Further, the redundancy consultation meetings with the claimant had been a complete sham as the decision had been pre-determined, and nothing the employee could have said would have made a difference.  Going through the motions of compliance with the Acas Code, effectively in bad faith, equates to a total failure to comply with the Code and therefore the maximum 25% uplift to compensation awarded was appropriate.

There remains uncertainty as to whether “some other substantial reason” dismissals could fall within the ambit of the Code.  The EAT in this case made clear its (obiter) view that they could (for example, where the reason is a breakdown in working relationships caused by conduct or performance issues) and that it is substance rather than form that matters – an employer cannot sidestep the application of the Acas Code by dressing up a dismissal that results from such concerns as for some other reason. This conflicts with another EAT ruling in Phoenix House Ltd v Stockman (see here); a Court of Appeal judgment is desirable to clarify the issue.  In such cases it remains prudent to follow as much of the Code as is relevant, as this will assist in demonstrating a fair procedure in any event.

Anna Henderson
Anna Henderson
Professional Support Consultant, Employment, London

UK: dismissal for refusal to formally progress multiple grievances could be fair

Employers should tread carefully where an employee raises a grievance but is unwilling to progress it formally.  This can be understandable and not uncommon in relation to bullying or harassment allegations, and sensitivity is required in handling such cases.  However, in other contexts, it may well be unreasonable for an employee to raise numerous complaints and expect to leave them unresolved so they can be resurrected at whim.  Where a grievance has not been resolved informally, it may be reasonable for the employer to require the employee to cooperate in pursuing it formally or withdraw it, in fairness to the other persons involved; a refusal to do so could be misconduct.

In Hope v British Medical Association the Employment Appeal Tribunal upheld the tribunal’s decision that it was fair to dismiss an employee who brought numerous grievances which he refused to progress or withdraw.  The grievances concerned his omission from meetings with subsequent grievances raised about how his grievances were handled;  he refused to formally progress any of the grievances or withdraw them, and failed to comply with the employer’s instruction to attend a grievance hearing.  On the facts the EAT agreed that the employer was entitled to find that the grievances were vexatious and frivolous and his conduct constituted gross misconduct. There was no need to show that the conduct amounted to a repudiatory breach of contract, only that it was fair to treat it as amounting to sufficient reason to dismiss in all the circumstances.

Anna Henderson
Anna Henderson
Professional Support Consultant, Employment, London
+44 20 7466 2819

UK: EAT rules that connected disciplinary investigations do not need to be ‘sealed off’; dismissal for employee covert surveillance may be unfair

The EAT ruling in Northbay Pelagic Limited v Anderson makes clear that it will not always be fair for an employer to dismiss an employee who has set up covert surveillance at the workplace.  Here, the employee was a director who had reason to suspect that someone had entered his personal office and accessed his computer; he was concerned to protect his confidential information on the computer while he was suspended and so installed a covert camera.   The EAT held that, given the negligible risk that individuals other than those entering the personal office would be captured on camera, dismissal on this ground was not within the band of reasonable responses. The employer should have carried out a balancing exercise between the individual’s right to protect his confidential information and the (limited) impact on the privacy rights of other employees, before dismissing.  Employers could strengthen their hand in this situation by ensuring that relevant policies provide that covert surveillance by an employee is gross misconduct.

The case is more helpful for employers on the issue of connected disciplinary investigations.  The employer had engaged three HR consultants to investigate the connected conduct of the claimant and two other individuals;  in relation to one individual the first consultant would investigate; the second, chair the disciplinary; and the third, hear any appeal.  The individual chairing the claimant’s disciplinary took into account evidence she has obtained while investigating the case against one of the others and the tribunal thought this was a fatal procedural flaw.  The EAT disagreed: if an employer is conducting disciplinary investigations into multiple employees whose cases are related, there is no need for the investigation of the employees to be “sealed off” from one another. It would not have been reasonable to expect the employer to hire separate teams of HR consultants to investigate each set of allegations. It can be in the interests of accuracy and coherence that a statement from one witness can be used in several processes if it is relevant.

Anna Henderson
Anna Henderson
Professional Support Consultant, Employment, London
+44 20 7466 2819

UK: employers should comply with Acas Code when handling whistleblowing complaints

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.

Anna Henderson
Anna Henderson
Professional Support Consultant, Employment, London
+44 20 7466 2819

UK: dismissal for possibility that an employee had committed a serious criminal offence was unfair

The case of K v L highlights the care needed when considering dismissal of an employee charged with committing a serious criminal offence. There is no hard and fast rule that an employer must wait until criminal proceedings have concluded before instigating disciplinary proceedings, and disciplinary proceedings may remain appropriate even if the charges are dropped;  it will all depend on the facts (including the likely delay pending criminal proceedings and the feasibility of paid suspension – see earlier cases summarised here).  However, it is critical that the employer conducts its own investigation into the issues and is clear up front as to whether the disciplinary charge is misconduct and/or reputational risk.  Dismissal will only be within the band of reasonable responses for misconduct if the employer itself is satisfied on the balance of probabilities that the employee did commit the offence – inability to be certain of innocence will not be enough.  If dismissal is considered on the basis of risk to reputation, the employee should be sufficiently notified that that is part of the complaint against them so that they have the opportunity to present all necessary arguments and evidence in response to that.

In this case a teacher, who lived with his son, had been charged with possession of indecent images of children but not prosecuted.  He had admitted that a computer in his home was found to contain indecent images but denied that he was responsible for downloading them. The school found that there was insufficient evidence to conclude that the teacher was responsible for the images but dismissed him on the basis that allowing him to return would pose an unacceptable risk to children and would cause serious reputational damage to the school if he was subsequently found guilty of this kind of offence.

The EAT ruled that his dismissal was unfair: he had only been charged with misconduct and the employer had been unable to conclude that he was guilty on the balance of probabilities;  a possibility of guilt was insufficient.  The issue of reputational risk had not been put to the employee and therefore could not justify dismissal.  However, even had the charge been put, the school could not have reasonably dismissed on that basis as it had no information about the nature or seriousness of the images nor as to the reasons why no prosecution was brought, there was no reason to expect a change in the decision not to prosecute, and there was no existing or expected press interest.

Anna Henderson
Anna Henderson
Professional Support Consultant, Employment, London
+44 20 7466 2819

UK: starting disciplinary process before investigation complete was not unfair

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)

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK: employer unfair dismissal liability for line manager’s engineered reason hidden from decision-maker

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.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK: covert recording by employee may not be gross misconduct

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)

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK: employers must take into account knowledge of disability arising between dismissal and appeal

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.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

Hong Kong: Disciplinary Procedures & Privilege

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