Frontline UK Employment Law Update Edition 2 2021 - Case updates

1. Dobbie v Felton t/a Feltons Solicitors UKEAT/0130/20

2. Allay (UK) Ltd v Gehlen UKEAT/0031/20/AT 

3. Northbay Pelagic Ltd v Anderson UKEATS/0029/18 

4. Mrs L Chalmers v Airpoint Ltd & Others: UKEATS/0031/19/SS 

1. Dobbie v Felton t/a Feltons Solicitors UKEAT/0130/20 (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) overturned an employment tribunal (“ET”)’s finding that two disclosures by a solicitor about alleged overcharging by the firm he worked at were not, in the solicitor's reasonable belief, made in the public interest and therefore were not protected under the whistleblowing legislation.

The Claimant worked for the Respondent, as a consultant. In two emails to the Respondent, he raised concerns that a client had been overcharged for a contentious matter, which in turn could have impacted upon the client's recovery of costs if its litigation was successful. He also argued that the firm had underrepresented the amount of his time spent working on the matter when invoicing the client. He went on to claim that these were protected disclosures and as a result of having made them, he had been subjected to various unlawful detriments, including the termination of his consultancy agreement.

Under the Employment Rights Act 1996, a disclosure of information amounts to a protected disclosure if (inter alia), in the reasonable belief of the worker making it, it is made in the public interest. In the case of Chesterton Global v Nurmohamed [2017] the Court of Appeal set out a detailed analysis of the test for determining whether the public interest test is met. In particular, it held that four relevant factors may assist:

  • the number of people whose interests the disclosure served;

  • the type of interests affected and the extent to which they are affected by the wrongdoing disclosed;

  • the type of wrongdoing disclosed; and

  • the identity of the alleged wrongdoer.

The ET found that the Claimant had disclosed information that, in his reasonable belief, tended to show a breach of a legal obligation in respect of overcharging the client, and that this was also possibly a regulatory breach. However, the ET went on to conclude that the Claimant had no reasonable belief that the disclosures were in the public interest. It found that the Claimant reasonably believed the disclosures were a private matter, related to how the client would be affected if it were successful in its litigation. The ET also found that the disclosures were not influential in the firm’s decision to terminate the Claimant’s consultancy agreement.

On appeal to the EAT, the Claimant argued that the ET had misapplied the public interest test and erred on the issue of causation. The EAT found that the ET had been incorrect in its analysis of whether the Claimant reasonably believed the disclosures were in the public interest, and that the analysis was not consistent with the four Chesterton criteria. The EAT found the ET had made no reference to the relevant authorities when determining causation either, and had not set out the test it was applying. Therefore the EAT allowed the appeal on both grounds and remitted the case to a fresh ET.

This case emphasises the difficulty of determining whether a disclosure meets the public interest test to qualify as a protected disclosure. It is crucial for employers to remember that the fact that the disclosure serves the interests of a narrow group of individuals, or is primarily motivated by the personal situation of the individual making the disclosure does not necessarily mean that it is not, in the reasonable belief of that person, in the public interest.

2. Allay (UK) Ltd v Gehlen UKEAT/0031/20/AT (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) upheld a tribunal's finding that an employer was not entitled to rely on “stale” equality and diversity training to show that it had taken all reasonable steps to prevent racial harassment by one employee to another. Accordingly, the employer was liable for the harassment.

The Claimant brought claims against the Respondent employer of race discrimination and for harassment by a fellow employee, Mr Pearson. The employment tribunal (“ET”) upheld the complaint of harassment, finding that Mr Pearson had made regular racist comments and, as Mr Pearson’s employer, the Respondent was liable for the harassment.

The Respondent appealed on the basis that the ET had failed to properly engage with the statutory defence under s 109(4) Equality Act 2010, which allows an employer to avoid liability for the discriminatory acts or omissions of its employees if it can show that it took all reasonable steps to prevent the harrassment.

The EAT held that the ET had been right to conclude that the Respondent’s equality and diversity training, which was delivered several years before the harassment in question, had become stale and no longer effective, and that there were further reasonable steps by way of refresher training that the Respondent should have taken. This was clearly demonstrated by the fact the Claimant’s colleagues had failed to properly react to the harassment or allegations of harassment.

The EAT Judge commented that the defence sets a high threshold for establishing that “all reasonable steps” have been taken. It not sufficient merely to ask whether there has been training; consideration has to be given to the nature of the training and the extent to which it was likely to be effective to prevent harassment (including how long the effect will it last). The Judge also emphasised that if there is a further step that should reasonably have been taken, the defence will still fail even if that step would not have prevented the harassment that occurred.

This case is an important reminder that simply having policies and training in place is not enough for employers to avoid liability for workplace discrimination. Employers need to regularly review the quality and effectiveness of their training and frequently refresh that training to ensure the relevant policies are fully understood and applied in practice.

3. Northbay Pelagic Ltd v Anderson UKEATS/0029/18 (LINK)

In this Employment Appeal Tribunal (“EAT”) case, the EAT held that the Respondent employer had unfairly dismissed the Claimant employee. The Respondent’s decision to dismiss the Claimant for gross misconduct for setting up a covert web-enabled camera in his office was not within the range of reasonable responses open to it.

The Claimant was a director and employee of the Respondent. Over time, the Claimant’s relationship with another director of the Respondent became strained and ultimately broke down, and this led the Claimant’s suspension in March 2016. During the Claimant’s period of suspension, and without the Respondent’s consent, he set up a web-enabled camera which allowed him to view his office remotely, as he suspected that another employee had entered his office and tried to access his computer.

The Respondent dismissed the Claimant for gross misconduct, relying on the setting-up of the secret camera as one of its grounds for dismissal. The Employment Tribunal (”ET”) found that the dismissal was unfair.

The EAT upheld the ET’s decision, finding that the Respondent’s decision to dismiss the Claimant fell outside the band of reasonable responses. It was held that in reaching its decision to dismiss the Claimant, the Respondent failed to carry out a ‘balancing act’ exercise to determine whether the right to privacy of anyone who potentially would have been caught on the camera outweighed the Claimant’s wish to protect the confidential information stored on this office computer. In this instance, as the possibility that individuals entering the room would have been picked up on camera was extremely remote, the Claimant’s wish to protect his confidential information prevailed.

The EAT also held that as the Claimant was not only an employee but also a director of the Respondent, his actions could be perceived as an attempt to protect the business and personal interests arising out of his position as a company director.

Whilst very fact-specific, this case is interesting as it demonstrates that when deciding whether to dismiss an employee for carrying out covert surveillance in the workplace, employers must carry out a balancing act to determine whether other factors, such as a desire to protect confidential information, would justify such actions, in the same way they would if they themselves were seeking to conduct workplace surveillance. The case demonstrates that the specific circumstances of an individual’s conduct will be highly relevant, and covert monitoring of itself may not amount to misconduct justifying dismissal.

4. Mrs L Chalmers v Airpoint Ltd & Others: UKEATS/0031/19/SS (LINK)

In this case, the Employment Appeal Tribunal in Scotland (“EATS”) rejected the Claimant employee’s complaint of victimisation on the basis that the grievance she had raised did not amount to a “protected act” under the Equality Act 2010 (“EQA”).

The Claimant raised a grievance regarding (inter alia) the Respondent employer’s decision to organise its Christmas party on a date she could not attend, contending that she felt excluded. She stated in the grievance that she considered the Respondent’s actions “may be discriminatory”. Her grievance was not upheld, and she subsequently brought proceedings in the Employment Tribunal (”ET”) for discrimination on the grounds of sex, and constructive dismissal. She also argued that the grievance was a “protected act” under the EQA and that she had been subjected to a detriment as a result. Under the EQA a “protected act” incudes “alleging (whether expressly or otherwise) that the Respondent…has contravened the EQA…”

The ET rejected the claims, finding that the Claimant had not alleged discrimination on the grounds of sex in her grievance. The Claimant’s statement in her grievance that the Respondent’s actions “may be discriminatory” in general was not a “protected act” under the EQA and her employer’s actions in dismissing the grievance did not amount to victimisation.

On appeal, the EATS upheld the ET’s decision. There was no reference to sex discrimination in the grievance and the word “may” signified doubt. The EATS held that as the Claimant was experienced in HR, if she had wanted to make an allegation of sex discrimination, she would have explicitly done so.

This case helpfully demonstrates that ambiguous allegations may not always be sufficient to amount to a “protected act” under the EQA. However, employers must always proceed with care when handling grievances or other complaints which include allegations of discrimination (whether ambiguous or clear). It is apparent from the EATS’ decision that the context in which the allegations are made is key: an HR professional may be expected to spell out the relevant allegation clearly, but an employee less well-versed in employment law may not be held to such a high standard.

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