Is Your Confidential Information at Risk? Legal Advice Is the Best Protection!

Confidential information is the very lifeblood of many businesses and, if it is removed without authority by untrustworthy employees, it can be very hard to retrieve. As one case showed, however, judges have a range of emergency powers that can be used to ensure that the trail does not go cold.

A food wholesaling company launched proceedings after two of its senior employees resigned. They were alleged to have taken up employment with a competitor, one of them before the expiry of his notice period. It was also claimed that they had taken a great deal of the company’s confidential customer and pricing information with them and that, prior to their departure, they had acted fraudulently in diverting secret profits into their own pockets.

The company sought a pre-trial order requiring the former employees to deliver up any confidential information in their possession on their doorsteps. Concerned that the information could be deleted or destroyed if the men got wind of the proceedings, thus defeating the objective of the order, the company unusually did not give them prior notice of the application.

In ruling on the matter, the High Court noted that it had necessarily heard only one side of the case and that to grant such an order without notice was exceptional. However, there was clear evidence that the former employees had wrongfully taken copies of confidential information that the company described as its crown jewels.

There was also clear evidence that both men had acted fraudulently prior to their resignations and were either competing or preparing to compete with the company in breach of restrictive covenants in their employment contracts. There was good evidence that the potential damage to the company were the information to fall into the hands of a competitor would be very serious.

The men were likely to still have digital copies of the confidential information in their possession and the company had established a sufficient possibility of destruction to justify the grant of a doorstep delivery-up order. The order would not require the men to allow access to their homes or to submit to a search of their premises. They would also only be required to hand over electronic data, rather than hard copy documents, and the company and its lawyers would not be entitled to see the information retrieved without a further court order.

Ill-Health Retirement, Pension Rights and Disability – Supreme Court Ruling

If an employee has to move to part-time work due to his or her disabilities, how does that affect the calculation of his or her pension rights on taking ill-health retirement? The Supreme Court considered that issue in a guideline discrimination case.

The employee concerned worked for a university for 13 years. He suffered from Tourette’s syndrome and other conditions that satisfied the definition of disability under Section 6 of the Equality Act 2010. As a result of his disability, he had to work part time for the final three years of his employment. When he took ill-health retirement at the age of 38, he was working half his full-time hours and was paid commensurately. On retirement, he started to receive his pension.

There was no dispute as to the correct calculation of his basic pension. However, he was also entitled to a pension enhancement, the amount of which was calculated on the basis of his final, part-time, salary as at the date of his retirement. He argued that that approach amounted to unfavourable treatment because of something arising in consequence of his disabilities, namely his inability to work full time. Although that argument initially succeeded before an Employment Tribunal, it fell on fallow ground before the Employment Appeal Tribunal and the Court of Appeal.

In dismissing his appeal against the latter ruling, the Supreme Court noted that there was little to be gained by seeking to distinguish the word ‘unfavourable’, in Section 15 of the Act, and concepts such as ‘disadvantage’ or ‘detriment’ found elsewhere in its provisions. The fundamental objection to the employee’s case was that there was nothing intrinsically unfavourable or disadvantageous about the award of the ill-health pension.

The only basis on which the man was entitled to such a pension was by reason of his disability. Had he been able to work full time, the consequence would have been not an enhanced entitlement but no immediate right to a pension at all. In those circumstances, the award could in no sense be viewed as unfavourable.

Gross Misconduct – A Forbidden Act May Not Be Enough to Justify Dismissal

When considering allegations of workplace gross misconduct, it is often not enough simply to establish that a forbidden act occurred, without going on to discern the reasons for it and whether those reasons are linked to a disability. A tribunal made that point in finding that a diabetic lorry driver was unfairly dismissed after he was caught on CCTV urinating in a goods yard.

lorryThe driver said that, as a result of his condition, he had been caught short and had tried to find a discreet part of the yard in which to urinate. He expressed regret but was dismissed after the CCTV footage revealed what he had done. The manager who investigated the matter conceded that he had concluded that the driver was guilty of the act in question, but had gone no further.

In upholding the driver’s unfair dismissal claim, an Employment Tribunal (ET) found that the investigation of the incident was neither impartial nor fair. The inadequacy of the manager’s inquiries had not been cured by the subsequent disciplinary process and the employer, a supermarket chain, had not held a genuine and reasonable belief that the driver was guilty of the misconduct alleged. His disability discrimination claim also succeeded on the basis that he had told his employer of his disability, a recognised symptom of which was an uncontrollable urge to urinate. The ET directed the driver’s reinstatement in his former role.

In challenging the ET’s decision, the employer argued that the CCTV footage clearly showed the driver urinating on pallets used for the delivery of customers’ shopping. The ET’s failure to find as much led to fatally flawed reasoning throughout its ruling and a perverse conclusion. The ET was also said to have been guilty of substituting its own views of the driver’s misconduct for those of the employer.

In dismissing the appeal, however, the Employment Appeal Tribunal rejected the employer’s plea that the evidence that the driver had urinated on the pallets was incontrovertible. The ET’s finding that the operative cause of the act of urination was his disability was not challenged and there was simply no basis for the perversity and substitution mindset arguments. The ET’s conclusion that trust and confidence between the employer and the driver was capable of being restored, thus enabling his reinstatement, was also unimpeachable.

Uber To Take Drivers’ Rights Test Case to the Supreme Court

taxisOnline taxi company Uber has failed to convince the Court of Appeal that drivers who make use of its app are self-employed contractors, rather than ‘workers’ within the meaning of the Employment Rights Act 1996. However, in a rare move, the company has been granted permission to appeal further to the Supreme Court.

Uber has always argued that it acts only as an intermediary between drivers and members of the public who use their services. The company provides booking and payment services through its app and its written contractual terms with drivers make clear that they are independent contractors who deal directly with passengers.

A group of drivers, however, argued successfully before an Employment Tribunal that they are workers, and thus entitled to holiday pay and to the protection of the National Minimum Wage Regulations 1999 (the NMWR). That preliminary decision was later upheld by the Employment Appeal Tribunal on the basis that drivers’ written contracts did not reflect the practical reality of their relationship with Uber and could thus be disregarded.

In dismissing Uber’s challenge to the latter decision by a majority, the Court of Appeal noted that the case concerned the rights of approximately 30,000 Uber drivers who operate in the London area. It found a number of features of Uber’s working arrangements that were inconsistent with drivers having a direct contractual relationship with passengers.

The Court also ruled that, for the purposes of the NMWR, Uber drivers are under a positive obligation to work whilst they have the company’s app switched on. Although they have the right to accept or decline any particular trip offered, Uber retains the ability to disconnect drivers from the app for a period if they turn down fares too frequently. Given the importance of the case, the Court granted Uber permission to appeal against its decision to the Supreme Court.

Substitution Rights of Delivery Drivers Preclude Them from ‘Worker’ Status

The High Court has ruled in a guideline case that a group of food and drink delivery drivers who can substitute others to perform their roles are not ‘workers’. The decision spelt defeat for a trade union which had sought recognition in order to represent the drivers for collective bargaining purposes.

The union argued that the drivers, all of whom performed motorcycle deliveries for the same company, were providing their services personally and thus fell within the definition of ‘worker’ contained within Section 296(1) of the Trade Union and Labour Relations (Consolidation) Act 1992.

In rejecting the union’s application for recognition in respect of the drivers, however, the Central Arbitration Committee (CAC) found that their ability to substitute others to perform services for the company in their place was fatal to the claim. The right of substitution was genuine, unfettered and operated in practice. In the circumstances, it could not be said that the drivers undertook personally to perform any work, or provide any services, to the company.

In dismissing the union’s challenge to that decision, the Court rejected arguments that the refusal of recognition amounted to a breach of Article 11 of the European Convention on Human Rights, which enshrines everyone’s right to freedom of assembly and to form or join a trade union.

Although it was accepted that the term ‘worker’ embraces some self-employed persons, the Court upheld the CAC’s conclusion that the power of substitution meant that the drivers were not in an employment relationship with the company. Neither domestic nor Strasbourg case law supported the proposition that the right collectively to bargain extends beyond such a relationship. Article 11 was therefore not engaged.

The Firm’s Annual Christmas Party

Christmas TreeThe annual Christmas party gives employers the opportunity to thank members of staff for their contribution over the past year and is a chance for everyone to relax and enjoy the holiday season. However, it is easy to forget that an employer owes its employees certain obligations, even outside work, when the event has been organised by the employer, and that employees’ conduct during it should comply with normal standards and should not breach workplace equal treatment and anti-harassment policies. An employer may be held vicariously liable for the actions of employees at such functions as they are likely to be considered as having occurred ‘in the course of employment’. To defend such a claim, it is important to be able to show that all reasonable steps have been taken to prevent such acts, which includes making staff aware of the appropriate policies and providing adequate training regarding conduct.

In order to prevent what should be a happy occasion from leading to recriminations or worse, an employer should take certain basic steps. Here are some of the more important ones: 

  • When planning any work event, thought should be given to whether it will coincide with the dates of religious festivals;
  • Carry out a risk assessment – this should include the venue and, in particular, the possible risks associated with serving alcohol. Making sure employees can get home safely is important, so consider hiring transport or providing taxis solely for this purpose if necessary. Ensure soft drinks are provided as an alternative to alcoholic drinks and that individual dietary requirements are catered for;
  • Ensure that, if employees’ partners are invited, there is no discrimination with regard to who is included. Ensure also that reasonable adjustments are made to allow any disabled employee or partner to attend and that any employees absent on maternity leave or because of long-term sickness are included;
  • Where possible, make sure that the arrangements accommodate the requirements of employees of different religions;
  • Ensure that employees understand the difference between ‘banter’ and behaviour that could be considered to infringe the dignity of any person present. You may wish to appoint supervisors to oversee the event, to whom staff can report problems. If such behaviour occurs, act quickly to prevent a re-occurrence. Take prompt action if a complaint is received;
  • Make sure that employees who are expected to attend work the day after the function understand that absence through over-indulgence is likely to be regarded as a disciplinary rather than a medical matter; and
  • Make sure employees are aware that any illegal acts will not be tolerated.

The biggest problems that are likely to arise are that inappropriate behaviour may occur, especially if alcohol flows too freely, and that there may be conduct which members of a particular religious persuasion find objectionable.

Your firm’s contract of employment will probably deal with most or all of these issues. However, it is sensible to have a separate policy on what is expected of employees at workplace social events and to remind employees of its contents in advance of any function.

In a recent vicarious liability case, in which a claim was brought by an employee who was punched in the face by a colleague and suffered serious brain injury some time after a group of employees had left the firm’s Christmas party and adjourned to a nearby hotel, the Court of Appeal ruled that the employer could be held liable for serious injuries inflicted by a senior member of staff on one of the company’s employees during an argument about work matters some hours after the planned Christmas event had finished.

For advice on all matters to do with employee behaviour issues and contracts of employment, contact us.

Criminal Exception to Disability Protection Analysed in Guideline Case

Mental or physical conditions that give rise to a tendency to commit various criminal acts are excluded from the protection that normally applies to disabilities under the Equality Act 2010. An instructive case on point concerned a council worker who walked out of a shop without paying for goods when he was suffering from post-traumatic stress disorder (PTSD).

Shopping streetThe man was apprehended outside the shop having failed to pay for various items. He said that he had not been dishonest in that, as a consequence of his PTSD, he suffered from forgetfulness and memory loss. He had simply wandered out of the shop without remembering to pay. Following an internal disciplinary process, however, he was dismissed for gross misconduct.

It was common ground that his PTSD would normally be regarded as a disability. In rejecting his disability discrimination claim, however, an Employment Tribunal (ET) found that his conduct revealed a tendency to steal. His condition was thus excluded from being a protected disability by Regulation 4(1)(b) of the Equality Act 2010 (Disability) Regulations 2010.

In challenging that decision before the Employment Appeal Tribunal (EAT), the man, who had previously served 17 years as a police officer and had no criminal record, insisted that he was not a shoplifter and that the isolated incident could not form a reasonable basis for a finding that he had a tendency to steal.

Dismissing his appeal, however, the EAT noted that he had been stopped by security staff outside the shop and, after police were called, he had accepted a penalty notice. He had paid a £90 fine as an alternative to prosecution and had signed a statement in which he made an unequivocal admission of theft. The ET was entitled to find on the evidence that he had been dishonest and that the employer had established that the exclusion applied.

Bus Driver Unfairly Sacked After Random Drug Test Wins Substantial Damages

When it comes to workplace disciplinary proceedings, slavish following of rules is no replacement for common sense. In a case where the latter was sadly lacking, a bus driver who was sacked after failing a random drug test succeeded in unfair and wrongful dismissal claims and was awarded substantial damages.

Bus2After his saliva tested positive for cocaine, the driver was adamant that he had never taken drugs other than those prescribed to him by a GP. He explained that a great many students had been on his bus on the day of the test and that cocaine may have got into his saliva via bank note contamination.

As a diabetic, he had to test his blood sugar regularly, causing sore fingertips which he licked continuously. He commissioned independent tests and analysis of his hair follicles revealed no traces of cocaine. He was, however, dismissed for gross misconduct and that decision was upheld following two internal appeals.

After lawyers launched proceedings on his behalf, an Employment Tribunal (ET) noted his 21-year unblemished career as a bus driver. There was no suggestion that he was unreliable or that his performance was impaired by drugs. He handled cash frequently, but there was no question of money going missing. There was nothing to indicate that any safety issues had ever arisen in respect of his driving.

In refusing to take into account the hair follicle test results, the employer had acted with a closed mind in a manner that was illogical and grossly unfair. The amount of cocaine found in the saliva sample was very small and a further test should have been arranged. The issue of possible cross-contamination was never satisfactorily resolved.

In the circumstances, the ET was not satisfied that the saliva test results were accurate. Common sense had been surprisingly lacking from the disciplinary process and the driver’s dismissal fell outside the band of reasonable responses open to the employer. He was awarded a total of £37,639 in compensation.

Employers – How Reasonable Are Your Disciplinary Processes?

Workplace disciplinary proceedings are always tense and it is vital to remember that their reasonableness is likely to be examined in detail by Employment Tribunals (ETs) after the event. In a case on point, a carpenter who was sacked after being accused of describing gay people as his pet hate succeeded in unfair and wrongful dismissal claims.

The man enjoyed an unblemished disciplinary record during his 14 years working for a social housing provider. After a tenant complained that he had made homophobic comments, however, he was summarily dismissed for gross misconduct. His internal appeal was rejected but, after he contacted specialist solicitors, they launched proceedings on his behalf before an ET.

In upholding his claims, the ET noted that the tenant’s identity had been kept from him during the disciplinary process and and that neither of the managers who dealt with the matter had met her. There had been no attempt to look for inconsistencies in her complaint and the managers’ acceptance of her word over that of the carpenter was unreasonable in the circumstances.

In the light of glowing character references, including from a gay friend, the ET found it highly unlikely that he would have made the comments alleged. The tenant had a motive for embellishing her account and it was probable that she had done so. She had not sought his dismissal and sacking him fell outside the band of reasonable responses open to the employer. His treatment also amounted to a repudiatory breach of his employment contact. The amount of his compensation has yet to be assessed but is bound to be substantial.

Civil Servant Prevails in ‘Pensionable Earnings’ Test Case

If an employee goes the extra mile and works outside normal office hours, does the additional income received form part of his or her pensionable earnings? The Court of Appeal analysed that issue in boosting the redundancy compensation and pension entitlements of a civil servant who regularly toiled at weekends.

The IT specialist worked for HM Court Service (HMCS) under a contract which at first required him to work 36.25 hours a week. The contract made no provision for overtime. The pressure of work was such, however, that he agreed to work extra hours at weekends. His contract was amended to reflect that arrangement and he was paid for the additional hours worked.

After he was laid off, HMCS calculated his redundancy compensation and his future pension entitlements on the basis of the 36.25 hours originally specified in his contract. The additional pay he earned at weekends was left out of account. After lawyers launched proceedings on his behalf, however, a judge upheld their arguments that, on a true interpretation of the Principal Civil Service Pension Scheme, the pay he earned at weekends qualified as pensionable earnings.

In dismissing a challenge to that ruling brought by the Ministry of Justice and the Cabinet Office, the Court rejected arguments that only remuneration that the man received for hours precisely specified in his contract qualified as pensionable earnings. The amended contract required him to work a reasonable number of hours at weekends and imposed a reciprocal obligation on HMCS to pay him for those hours. When the man worked at weekends, he was working in accordance with his obligatory contractual working hours and was not undertaking overtime.