This month, Associate Stephanie Creed investigates the legal and reputational issues surrounding the rise in staff monitoring, and gives advice for employers who are considering the implementation of new or revised staff monitoring techniques.

Our case updates discuss an EAT decision which confirms that a botched disciplinary process can entitle an employee to resign and claim constructive dismissal; a tribunal decision which explores the boundaries of the IR35 regime (which is due to be reformed next year); the upholding of a "bad leaver" provision which was engaged when an individual resigned; and an EAT decision which emphasises the importance of internal policies when considering the scope of reasonable adjustments under UK discrimination legislation.

Finally, our legal update details the recently announced increase to the Vento bands, which are used when assessing compensation for injury to feelings in discrimination cases.

Big Brother is (probably) watching: top tips and pitfalls for staff monitoring

By Stephanie Creed

The concept of employee monitoring is nothing new; Ford Motor Company's attempts at worker monitoring is a high-profile historical example. But what is new is the extent to which electronic methods of monitoring and surveillance are being used in the workplace, and this raises new complications and matters for employers to consider and take into account.

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Case Summary

By Alison Dixon and Sam Rayner

Botched and discriminatory disciplinary process led to constructive dismissal

The Governing Body of Tywyn Primary School v Aplin (EAT)

The EAT has confirmed that an openly gay headteacher was entitled to resign and consider himself constructively dismissed following a disciplinary investigation which involved egregious procedural flaws and suggested unconscious bias on the part of the investigating officer. In the absence of non-discriminatory reasons for such action, the Tribunal was entitled to draw an inference that sexual orientation had taken place.

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HMRC fails to recover tax and NI from presenter legitimately engaged through PSC

Albatel Ltd v HMRC (First Tier Tribunal)

The First-tier Tax Tribunal has held that the factual arrangements by which an individual delivered presenting services through her personal services company ("PSC") did not engage the UK's "intermediaries" legislation, otherwise known as IR35, which would have obliged that PSC to deduct and account to HMRC for employment taxes and national insurance notwithstanding her "label" as an independent consultant.

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"Bad leaver" provisions activated by an employee's voluntary resignation survive enforceability challenge

Nosworthy v Instictif Partners Ltd (Employment Appeal Tribunal)

The EAT has upheld a "bad leaver" provision in a company's Articles of Association which obliged an employee who voluntarily resigned to forfeit their loan notes and sell back their shares at minimal value. When challenged by the employee, it was determined that the bad leaver provision was neither: (i) unconscionable as a matter of law; nor (ii) an invalid penalty clause, on the basis that its enforcement did not depend on any breach of contract.

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Employers should follow internal policies when considering reasonable adjustments

Linsley v Commissioners for Her Majesty's Revenue and Customs (EAT)

The EAT has held that an employer which failed to allocate a dedicated parking space to a disabled employee in breach of a generally applicable policy had potentially failed in its duty to make reasonable adjustments under UK discrimination legislation, notwithstanding the policy's status as non-contractual or discretionary and the fact that the relevant decision maker appeared not to know of its existence. The issue of whether there was in fact a failure to make reasonable adjustments would be remitted to the same Employment Tribunal for re-assessment.

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Legal Updates

Annual increase to Vento bands (compensation awards for injury to feelings in discrimination cases)

On 25 March 2019, the Presidents of the Employment Tribunals in England and Wales and Scotland issued a joint Second Addendum to the Presidential Guidance (originally issued on 5 September 2017) on Employment Tribunal awards for "injury to feeling and psychiatric injury" in discrimination and whistleblowing claims.

From 6 April 2019,the so-called Vento bands have increased to the following:

• Lower band: £900 - £8,800.

• Middle band: £8,800 - £26,300

• Upper band: £26,300 - £44,000

Injury to feelings awards will be allocated a band based on the perceived severity of the case. Only the most exceptional cases will be capable of exceeding £44,000.