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Court of Appeal holds that the label given to a misconduct dismissal is immaterial so long as the employee knows what s/he is accused of

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The Court of Appeal has held that an employer’s use of the word ‘fraud’ as shorthand for alleged gross misconduct was an immaterial consideration as to whether the subsequent dismissal was fair. It was merely a label.

Ms Brito-Babapulle was employed as a consultant haematologist at Ealing Hospital and was contractually permitted to treat private patients. She was absent from work on grounds of ill-health between 13 March 2009 and 8 June 2009. The hospital believed that Ms Brito-Babapulle had continued to see private patients during that period despite it having notified her twice that she should not do so whilst off sick. The hospital commenced disciplinary proceedings on grounds of gross misconduct. A disciplinary panel found that Ms Brito-Babapulle had held private appointments whilst receiving sick pay from the NHS. The hospital concluded that this “constituted fraud which could be considered as gross misconduct” and Ms Brito-Babapulle was summarily dismissed.

Ms Brito-Babapulle brought a claim for unfair dismissal. She argued that the hospital had accused her of fraud and, therefore, her conduct needed to amount to fraud to justify her dimissal. Ms Brito-Babapulle further alleged a breach of the rule that an individual must know the case it must meet and whether there are allegations of dishonesty.

The Court of Appeal disagreed, holding that the nature of the allegations against Ms Brito-Babapulle was clear from the outset; she had been dismissed for conducting a private practice whilst on paid sick leave. Though the Court disagreed with the hospital’s use of the word ‘fraud’, and cautioned generally against the use of emotive language as a label for conduct, it held that it was just that – a label for conduct which had been clearly described. As such, whether or not Ms Brito-Babapulle was guilty of fraud was immaterial to whether or not she had been unfairly dismissed.

Brito-Babapulle v Ealing Hospital NHS Trust [2014] EWCA Civ 1626

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ECJ rules that effects of obesity may amount to disability

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The European Court of Justice has ruled that, whilst obesity is not of itself a ‘disability’, the effects of obesity on a worker’s life could be deemed a ‘disability’.

Mr Kaltoft was employed by the Municipality of Billund in Denmark as a childminder until his dismissal in November 2010. Mr Kaltoft had a BMI of 54, putting him in the category of ‘morbidly obese’. He claimed that his dismissal was by reason of his obesity and, on that basis, brought discrimination proceedings in Denmark. The Danish Court asked the ECJ: (i) whether there is a general prohibition in EU law against all forms of discrimination including obesity; and alternatively (ii) whether obesity could be classified as a ‘disability’.

The ECJ confirmed that there is no specific prohibition in EU law against discrimination on the grounds of obesity. However, obesity could amount to a ‘disability’ in certain circumstances. A ‘disability’, must be a long-term physical, psychological or mental impairment which can hinder the full and effective participation of a person in professional life in comparison to other employees. An obese person may fit this definition if, as a result of their obesity, they suffer from mobility issues or other obesity-related medical conditions which prevent them from participating in professional life.

The ECJ held that the reason for the obesity cannot be a taken into account when determining whether it amounts to a disability, as to define a disability by reference to how it originated would undermine the principle of equal treatment altogether.

FOA, acting on behalf of Karsten Kaltoft v Kommunernes Landsforening, acting on behalf of the Municipality of Billund C-354/13, 18 December 2014

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EAT finds that dismissal for making offensive, personal tweets is potentially fair

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The Employment Appeal Tribunal has held that offensive tweets made by an employee on his personal Twitter account and which did not relate to the employer could be grounds for dismissal for gross misconduct.

Game Retail Ltd is a video game retailer which uses Twitter and other social media for marketing and communication purposes. Mr Laws was employed by Game as a risk and loss prevention investigator with responsibility for over 100 stores nationwide. In 2012, Mr Laws set up a personal Twitter account which he used to follow the accounts of the stores he oversaw. Mr Laws also allowed 65 stores to follow his Twitter feed. Mr Laws’ tweets were publicly visible as he had not altered his privacy settings.

In July 2013, another manager raised concerns with Game as to the content of Mr Laws’ tweets. A number of tweets contained explicit language and many were alleged to be offensive and abusive. Following an investigation, Mr Laws was summarily dismissed for gross misconduct. Mr Laws brought a claim for unfair dismissal.

The EAT held that Mr Laws’ dismissal had been fair given that his tweets could not properly be considered to be private. It was relevant that Mr Laws had failed to restrict his privacy settings and had tweeted in the knowledge that 65 Game stores were following him. His tweets were visible to Game staff and also to customers. Game was entitled to conclude that the tweets may have caused offence; it was not necessary for it to find any evidence that offence had, in fact, been caused. The tweets did not need to relate to Game or to Mr Laws’ work or colleagues in order for them to justify his dismissal.

This decision follows numerous news stories relating to the impact of personal social media use on working relationships. It highlights the need for employers to consider their stance on their employees’ use of social media outside of work as well as during working hours. It is advisable for employers to make clear in their policies that misuse of even private social media accounts can amount to gross misconduct in some circumstances.

Game Retail Ltd v Laws UKEAT0188/14

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Deduction for repayment of training fees should be disregarded in calculating minimum wage where employee has voluntarily resgined

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The EAT has held that in circumstances where the employee had voluntarily resigned, an employer was entitled to deduct training fees from the employee’s final salary, even though this resulted in the employee receiving net pay less than the national minimum wage.

Miss Brade worked for Lorne Stewart plc and was sponsored by them to attend a training course during her employment. As a condition of her sponsorship, Miss Brade was required to sign an agreement stating that she must repay part of the cost of the course if she were to leave Lorne Stewart within two years of completing it. The agreement also entitled Lorne Stewart to deduct those costs from Miss Brade’s final pay in the event of her employment being terminated. Miss Brade resigned within the two-year period and Lorne Stewart accordingly deducted part of the fees for the course from her final wage. The result of the deduction was that it appeared that Miss Brade had been paid below the national minimum wage. HM Revenue and Customs issued a notice of underpayment to Lorne Stewart and Lorne Stewart appealed to the employment tribunal.

The EAT found that deductions could be made on grounds of conduct for which the worker is responsible, which includes but is not limited to misconduct, without infringing the National Minimum Wage legislation. As Miss Brade resigned voluntarily, Lorne Stewart was entitled to make the deduction, which should be discounted for the purposes of national minimum wage calculations.

The important point raised in this case was that the deduction could be made because it related to Miss Brade’s voluntary resignation (i.e. conduct for which she was responsible) and not because of the agreement entered into with Lorne Stewart. The EAT made clear that had Miss Brade been made redundant, she would have been entitled to receive the national minimum wage.

Commissioners for HM Revenue and Customs v Lorne Stewart plc UKEAT/0250/14

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UNISON’s second challenge to employment tribunal fees is rejected

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The High Court has rejected UNISON’s second challenge to the imposition of fees to issue claims in the employment tribunal. It found no evidence to support the claim that the fee regime has a prejudicial effect on protected groups (women in particular) or on workers generally.

UNISON initially sought judicial review of the Lord Chancellor’s fee regime in February 2014. This was dismissed on grounds that the challenge was premature and lacked evidence. However, in March 2014, the Ministry of Justice released statistics showing a 79% drop in employment tribunal claims. In light of this evidence, UNISON brought a fresh judicial challenge of the fee regime.

The challenge centred on two grounds. Firstly, UNISON submitted that the requirement to pay a fee made it ‘virtually impossible, or ‘excessively difficult’ to exercise EU employment rights in tribunals. Secondly, it was argued that that the requirement to pay higher fees for bringing certain claims (including discrimination claims) indirectly discriminates against protected groups, particularly women.

The High Court dismissed the application on both grounds. In relation to the first ground, the Court held that there was a lack of evidence on the reason for the drop in the number of claims. It found that the statistics show that more people are unwilling to bring tribunal claims, but not that they are unable to do so. On the second ground, the Court found that the proportion of men and women bringing claims broadly reflects the gender balance of the workforce in the UK (approximately 55% male and 45% female); therefore, there was no significant adverse impact on women. The Court found that, even if women are worse affected, the fee regime is justified because it: (i) transferred part of the costs of running the Employment Tribunal System to the users who benefit from it; (ii) discourages unmeritorious claims; and (iii) encourages alternative dispute resolution.

UNISON has announced its plans to appeal.

R (Unison) v Lord Chancellor and another (No.2) [2014] EWHC 4198 (Admin)

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Worker not entitled to holiday pay for untaken annual leave as he was not prevented from taking it?

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The Employment Appeal Tribunal has held that a salesman was not entitled to claim for untaken annual leave on termination where he claimed he had not taken the leave because the employer said it would not be paid. He had been paid wages whilst at work during those periods and he had shown no evidence that he was prevented from taking the holiday.

Mr King worked as a commission-only salesman for the Sash Window Workshop from June 1999. At no point was Mr King paid for holiday or sickness leave. The Company terminated Mr King’s contract on 6 October 2012, once he had turned 65. Mr King brought a claim for unpaid holiday pay from the start of his employment under the Working Time Regulations.

The EAT rejected Mr King’s claim for unpaid holiday on two grounds. Firstly, the Working Time Regulations specify that annual leave can only be carried over where the worker cannot take it for reasons beyond his control. The EAT saw no evidence that Mr King was prevented from taking his leave. Though it agreed that Mr King may have been more willing to take his annual leave if it were paid, it found that he was able to take it and indeed, Mr King did take his full leave entitlement in some years. No evidence was presented to show that the Company had ever refused Mr King’s requests for annual leave.

Secondly, the EAT found that Mr King’s claim was not one for unlawful deductions from his wages. Mr King had been at work and earning during the periods when his annual leave was not taken. As such, he had suffered no loss of pay and could not claim a series of deductions from his wages.

Sash Window Workshop Ltd and another v King UKEAT/0057/14

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Depression not a foreseeable consequence of employer’s decision to remove employee from his post

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The Court of Appeal has held that the Foreign and Commonwealth Office’s decision to withdraw a Commissioner from office amounted to breach of contract, but that the Commissioner’s subsequent development of clinical depression was not a foreseeable consequence of its decision. As such, it was not liable for losses the Commissioner suffered as a result.

In August 2007, Mr Yapp was appointed British High Commissioner in Belize by the FCO. The terms of appointment included the following contractual provisions: (i) FCO could withdraw Mr Yapp from his post where necessary for ‘operational reasons’; and (ii) Mr Yapp was entitled to fair treatment.

In June 2008 allegations of sexual misconduct and bullying were made against Mr Yapp. The FCO withdrew Mr Yapp from his post with immediate effect on grounds that his position had become ‘operationally untenable’ and that the allegations were harming diplomatic relations between Belize and the UK. Mr Yapp was given no notice of the allegations. An investigation was arranged and the FCO stated that, should the allegations be unfounded, it would try to find an alternative role for Mr Yapp.

A disciplinary hearing took place in August 2008. The hearing officer determined that the allegations of sexual misconduct were unfounded, but the allegations of bullying were substantiated. Mr Yapp was given a final written warning and his suspension was lifted in November 2008. However, Mr Yapp was then signed-off work with depression. No alternative positions were found for Mr Yapp and he remained on sick leave until his retirement in January 2011.

Mr Yapp brought claims for breach of contract and negligence against the FCO in respect of his withdrawal from office and the FCO’s conduct of the disciplinary process.

The FCO argued that its immediate withdrawal of Mr Yapp from his post was justified due to its wide discretion to make operational decisions and its need to act quickly in the circumstances. It also argued that, in any event, Mr Yapp’s development of clinical depression was unforeseeable and therefore it could not be held liable.

The Court of Appeal held that the FCO’s decision summarily to withdraw Mr Yapp before carrying out an investigation or giving him the opportunity to answer the allegations constituted a breach of contract. However, it held that Mr Yapp’s development of clinical depression was not reasonably foreseen as he had shown no previous signs of vulnerability to psychiatric injury. The Court noted that there may be situations where the employer’s conduct was so severe that even a robust person may be expected to develop psychiatric injury as a result, but this was not such a case.

Yapp v Foreign and Commonwealth Office [2014] EWCA Civ 1512

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Director’s duty of confidentiality did not include a duty to return confidential documents

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The High Court has held that a non-executive director was not obliged to return all documents he had received during the course of his appointment which related to the company.

Sir Paul Judge was appointed as a Non-Executive Director of Eurasian Natural Resources Corporation on 6 December 2007; he also held directorships in other companies. The terms of that appointment included confidentiality provisions precluding the disclosure of any information acquired during his appointment to third parties. On 25 April 2013, the SFO publicly announced its investigation into Eurasian relating to allegations of fraud, bribery and corruption. On 5 June 2013, Eurasian terminated Sir Paul’s directorship and requested that he deliver up all information he had received during the course of his directorship.

The SFO served Sir Paul with a notice requiring him to provide information relevant to its investigation; the notice bore a warning that failure to comply without reasonable excuse was a criminal offence. Sir Paul’s solicitors emailed the SFO asking what should be done with the documents in his possession which were being requested by Eurasian. The SFO confirmed that the documents should not be returned to Eurasian and added that to do so would be a criminal offence. Sir Paul’s solicitors agreed to ensure that no privileged information was sent to the SFO but Sir Paul declined to sign an undertaking to return to Eurasian all confidential information once the SFO’s notice was complied with.

Eurasian argued that, in addition to a duty of confidentiality, Sir Paul was subject to an implied duty to deliver up documents; it applied for an injunction to restrain breaches of those alleged duties.

The High Court considered that Sir Paul was under no contractual duty to deliver up documents legitimately received in the course of his appointment. In the absence of an express clause requiring it, non-executive directors as a matter of course, are not obliged to return such documentation. The Court took a view that the existence of such a duty would not make business sense, as it would require a considerable amount of work for the director to comply with, particularly where the director holds multiple appointments. It was also relevant that Sir Paul was directly obliged by the SFO not to provide documents to Eurasian. However, the Court held that it may choose to exercise its discretion to require delivery up in any event if there were evidence of misuse.

This decision can be contrasted with ordinary employees and executive directors where the expectation is much stricter both in terms of staff sending documents home, which may be gross misconduct.

Eurasian Natural Resources Corporation Ltd v Sir Paul Judge [2014] EWHC 3556

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