October’s Employment Update covers:
1. Was calling an employee a “fat ginger pikey” harassment?
2. Morrisons and vicarious liability
3. Whistleblowing: Liability of individuals
4. Employment tribunal statistics
5. No Deal Brexit- employment law impact
6. “Gay Cake”
7. Parental Bereavement (Leave and Pay) Act 2018
Not on the facts of this case, held the Employment Appeal Tribunal (EAT) in Evans v Xactly.
The EAT had to consider whether an Employment Tribunal was correct in finding that Mr Evans, a former employee of IT company Xactly, had been dismissed due to poor performance rather than a number of claims including discrimination and victimisation on the grounds of disability and race.
Mr Evans has type 1 diabetes and an under active thyroid and has strong links with the traveller community. The Tribunal found that, on the face of it, the comment is a potentially discriminatory and a harassing comment to make. However, it assessed the context in which the remark was made and concluded that the office culture was one of good natured jibing and teasing among competitive sales people. At the time Evans did not complain about the comment. The Tribunal therefore found on the facts that the treatment did not meet the harassment definition in s26 of the Equality Act 2010.
The EAT considered the Tribunal was entitled to come to this conclusion, given that harassment claims are highly fact sensitive and context specific.
Her honour Judge Stacey stated “I accept that at first blush it may be surprising that calling a colleague what many people would consider an offensive term such as ‘fat ginger pikey’ at work does not amount to harassment, especially where the individual has links with the traveller community, but the Tribunal considered the facts extremely carefully and it is easy to see why they concluded that the claimant had not been harassed by this remark and it was unarguably a decision the Tribunal was entitled to come to.”
She added that a number of the sales team had come under pressure to improve their performance and during the period of Evans’ employment, three other colleagues were either dismissed or resigned on account of poor sales figures.
Is an employer vicariously liable for the misuse of its employees’ personal and confidential information by another employee’s criminal conduct intended to harm the employer?
Yes, held the Court of Appeal in WM Morrison Supermarkets Plc v Various Claimants.
Last year, a claim for compensation was brought by 5,518 of Morrisons’ employees for breach of the Data Protection Act 1998 (DPA), breach of confidence and misuse of private information. The claim arose from the actions of Andrew Skelton, a senior IT auditor who became disgruntled after receiving a disciplinary sanction from Morrisons, his employer. Mr Skelton deliberately uploaded the names, addresses, dates of birth, bank account details and salaries of almost 100,000 Morrisons employees onto a data sharing website and was later found guilty and convicted for 8 years for his actions. Morrisons spent £2 million to rectify the breach.
The claim against Morrisons was that it was both primarily and vicariously liable for the actions of Mr Skelton. The trial culminated in the High Court rejecting the claim of primary liability under the DPA, but accepting the claim of vicarious liability. Morrisons’ appeal to the Court of Appeal was dismissed by the appeal judges, who upheld the High Court’s decision that Morrisons was vicariously liable for the torts committed by Mr Skelton against the claimants.
What does this mean for employers? Vicarious liability is the legal principle that liability can be imposed on one person for the actions or crimes committed by another, even when the first person is not at fault. The most common example is when an employer is found to be vicariously liable for the actions of an employee, as was the case with Morrisons.
For an employer to be vicariously liable for the acts of its employees, the act in question must have been committed in the course of their employment. Morrisons argued that because Mr Skelton disclosed the data at home, on his personal computer and a significant amount of time after he first had access to that data (approximately 2 months), the act could not be deemed to have occurred in the course of his employment. Unfortunately for Morrisons the trial judge disagreed, finding that there was an unbroken sequence of events from when Mr Skelton received the data through to when he leaked it that connected his employment to the breach. The judge also found that, by entrusting him with the payroll data in the first place, it was clear that his task was to deal with that data and Morrisons took the risk when entrusting Mr Skelton with the data. The Court of Appeal agreed with the trial judge’s decision on this.
This finding of vicarious liability on the part of Morrisons, despite demonstrating that it had complied with data protection law, has potentially broad implications for companies and the actions of their employees. It opens companies up to the possibility that they will be held liable for an employee’s actions, even when that action is intended to harm the company and even where steps were taken to rectify the damage caused.
Morrisons’ view remains that it was entirely blameless and should not be held responsible for Mr Skelton’s criminal disclosure of data that was carried out as an act of vengeance against it, and
Morrisons therefore intends to appeal the decision to the Supreme Court. Watch this space….
Can an individual be liable for a whistleblowing dismissal, along with the employer, under the Employment Rights Act 1996?
Yes, in the recent case of Timis and another v. Osipov, the Court of Appeal confirmed that an individual employee, along with the employer, can be held liable for the detriment of dismissal arising from making a protected disclosure (commonly known as whistleblowing).
Mr Osipov was the CEO of International Petroleum Ltd (IP Ltd). During his time as CEO he made a number of disclosures related to corporate governance and compliance with Nigerien law. He was subject to detriment and then dismissed by two non-executive directors of IP Ltd, Mr Sage (a non-executive director with managerial functions) and Mr Timis (a non-executive director and the company’s largest individual shareholder). Mr Sage acted on instructions from Mr Timis when dismissing Mr Osipov.
Mr Osipov brought a claim to the Employment Tribunal alleging that he had been unfairly dismissed and subjected to detriment for having made protected disclosures. He succeeded with both claims and Mr Sage and Mr Timis were held jointly and severally liable for his losses amounting to over £1.7 million. IP Ltd and both directors appealed the decision to the Employment Appeal Tribunal (EAT). The directors’ appeal was based on the fact that they should not be liable for the losses flowing from the dismissal. They were unsuccessful and subsequently appealed the EAT decision to the Court of Appeal.
The Court of Appeal agreed with the previous decisions of the Tribunals and backed the original award made to Mr Osipov. In making the decision the Court considered whether an individual worker can be held liable for a detriment which takes the form of dismissal on the ground of making a protected disclosure despite the provisions of the Employment Rights Act 1996 (ERA), which excludes a detriment claim if the detriment “amounts to dismissal itself”.
The Court held that there is nothing in the wording of the ERA that “excludes from individual liability detriments amounting to termination of the working relationship”. In other words, there is no reason for fellow workers to be relieved of liability if they subject another worker to a detriment which results in a dismissal.
This decision confirms that individual employees can be liable for their actions towards whistleblowers. In practice this may result in a new trend, where the whistleblowing claims are brought against both the employer (unfair dismissal claim) and the individual who decided to dismiss the employee (detriment claim). In mitigating the risk of such claims, employers should provide adequate training to the managers and directors investigating and making decisions relating to protected disclosures and ensure that appropriate whistleblowing policies are in place and followed.
The latest quarterly statistics published by the Ministry of Justice for the period April to June 2018 show;
- there has been an increase of 165% in the number of single employment tribunal claims lodged compared to the same period in 2017 (the last quarter when fees were in force
- There has been an increase of 344% in the number of multiple claims lodged compared to the same period in 2017.
These are big numbers and employers should bare the increase in claims in mind when making dismissal decision.
The government has published a technical notice on workplace rights in the event of a no-deal Brexit. The notice states that there will be minimal change to UK legislation derived from EU law and existing employment rights would not be changed.
However, there may be changes in relation to employee rights on an employer’s insolvency and in respect of European Works Councils. In that regard, the notice recommends that:
- UK and EU employees working in an EU country should make themselves aware of the relevant implementing legislation in that country to confirm whether they will still be protected in the event of their employer’s insolvency under the national guarantee fund established in that country
- UK businesses with EWCs may need to review those agreements in light of there no longer being reciprocal arrangements between the UK and the EU.
On 13 September 2018 the Parental Bereavement (Leave and Pay) Act 2018 received Royal Assent and is expected to come into force in April 2020.
The Act will give employed bereaved parents the right to two weeks of time away from work if they suffer the loss of a child under the age of 18 or a still birth after 24 weeks of pregnancy.
Employed parents with 26 weeks employment will get statutory parental bereavement pay for the 2 weeks.
All the rest of details surrounding the Act will appear in the supporting Regulations which are not yet published. They will include details such as; the definition of “bereaved parents”, how and when the leave can be taken, the notice and evidence that will be required and details of how much remuneration will be payable.
Lee v Ashers Baking Company Ltd and Others “Gay Cake”
Is it directly discriminatory on the grounds of sexual orientation and political belief for a Christian baker to refuse to bake a cake containing a message supportive of gay marriage?
No, held the Supreme Court
Ashers Baking is a family-owned business. Its owners are religious Christians. Mr Lee asked them to bake a cake with a photo of Bert and Ernie from Sesame Street and the wording ‘Support Gay Marriage’. They declined to bake it due to their religious beliefs.
Mr Lee brought direct discrimination claim on the grounds of sexual orientation and political belief through the Northern Irish courts and succeeded at first instance and before the Northern Irish Court of Appeal. However the Supreme Court overruled those decisions.
The Supreme Court found that the bakers’ refusal to make the cake was not because of Mr Lee’s sexual orientation, they would have refused to make such a cake for any customer regardless of sexual orientation. It was therefore not direct discrimination in the ordinary sense.
The Supreme Court was also not satisfied that this was associative direct discrimination, i.e. because Mr Lee was likely to associate with the gay community. For associative discrimination to succeed there needed to be an association with particular persons and discrimination due to that association. That was absent in this case. The mere fact of the message had something to do with sexual orientation of some people was not sufficient to make out the claim.
Moving on to political belief, the Court relied heavily on the rights relating to religion and expression under Articles 9 and 10 of the European Convention on Human Rights. Those rights include an entitlement not to be forced to express a political opinion in which you do not believe. Infringement of those rights could not be justified by an obligation to supply a cake iced with a message with which the bakers profoundly disagreed.
If you would like further information on any of the above or advice on how they apply to your business then please contact Tom Evans, Associate, Employment & HR Team.