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The High Court has clarified the scope of an employer’s duty when giving a reference in respect of a former employee.

The law provides that an employer must exercise reasonable skill and care to provide a reference which is true, accurate and fair. If it fails to do so, then the former employee may have a claim against the ex-employer for negligent misstatement. The High Court has ruled on how far the employer’s duty extends.

This case concerned Mr Hincks, an independent financial advisor, who was employed by CIFS but had authority to conducted FCA-regulated activities as the appointed representative for Sense Network. Following Sense Network’s internal investigation into alleged breaches of its pre-approval processes, it terminated Mr Hincks’ authority on the basis that he had committed repeat breaches and had been “malicious” in doing so. Mr Hincks’ conduct meant that Sense Network had to offer over £12,000 in compensation to its clients. Mr Hincks later sought a reference from Sense Network. The reference provided referred to the allegations, the investigation, the compensation paid to clients, and Sense Network’s conclusion that he had “knowingly and deliberately circumvented” the pre-approval process.

Mr Hincks brought a claim for negligent misstatement, arguing that Sense Network’s reference had not been true and accurate. He said that the investigation had been an “inadequate sham”, and that it had been negligent of Sense Network to report its opinions arising from the investigation without having checked that it had been procedurally fair.

The High Court held that a reference-giver relying on the findings of a previous investigation is not required to review the procedural fairness of that investigation. Instead, the inquiry should be into whether the investigation had a proper and legitimate basis; if it did, reliance upon it was reasonable. A more stringent review may only be appropriate if there was some ‘red flag’ suggesting that something had been amiss with the investigation.

Many employers tend to give factual references, but for those who do not, this case helps to demonstrate what is included within the duty of care they are under. Additionally, where the employer is under regulatory duties to provide particular information to a prospective employer, then it must do so by reference to all information and documentation available to it.

Hincks v Sense Network Ltd [2018] EWHC 533 (QB)

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The EAT has made clear that context is key to the determination of whether conduct amounts to harassment.

Not only does conduct have to be unwanted and humiliating in order to qualify as harassment, but it also has to be related to a protected characteristic. Determining whether that is so cannot be done in the abstract. The EAT in this case held that the Employment Tribunal had been entitled to consider conversations had before the allegedly harassing remark and to reach the conclusion that it had not been related to religion.

The facts of the case illustrate the importance of context. Mr Bakkali was a Muslim and had discussed with a colleague, Mr Cotter, a journalist’s report portraying IS fighters in a positive light. Later that month, Mr Cotter asked Mr Bakkali if he was “still supporting” IS. The Tribunal was satisfied on the facts that the reason Mr Cotter made this remark was the discussion they had previously, not because Mr Bakkali was a Muslim.

The EAT stated that the test for harassment (that the conduct be ‘related to’ the protected characteristic) is broader than the ‘because of’ test in direct discrimination, which warrants a close look at context in order to understand the motivation behind it.

Bakkali v Greater Manchester Buses (South) Ltd (t/a Stage Coach Manchester) UKEAT/1076/17

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The Court of Appeal has set out what an employer does and does not need to know in order to be found to have discriminated against a disabled employee.

There are a number of types of disability discrimination, and the extent of knowledge required for an employer to have committed them varies. The Court of Appeal in this case explained what the requirements are in a claim concerning discrimination arising from disability.

The facts of this case help to illustrate how the test for discrimination arising from disability workers. Mr Grosset was a teacher and Head of English and a school in York; he suffered from cystic fibrosis which meant he had to hours of intense physical exercise each day in order to clear his lungs. The school was aware of this and agreed this amounted to a disability. Due to his disability, Mr Grosset struggled to deal with an increased workload at the school; in turn, this caused him stress which exacerbated his cystic fibrosis. During this stressful period, Mr Grosset showed the 18-rated horror film, Halloween, to a class of vulnerable 15- and 16-year-olds. When this was uncovered, Mr Grosset was suspended and eventually dismissed for gross misconduct. Medical evidence eventually presented at the Employment Tribunal showed that the error in judgment in showing the film had been caused by Mr Grosset’s disability.

The Court of Appeal held that the decision to discipline and dismiss Mr Grosset was unfavourable treatment on the basis of something arising from his disability – namely, the error in judgment in showing the film. This was so despite the fact that the council did not know at the time that the conduct arose as a consequence of his disability; whilst it is a defence to a discrimination arising from disability case for an employer to say it was unaware of the disability, there is no requirement for the employer to have been aware of the consequences of it.

The employer in this case had sought medical advice, but that advice did not make the connection between the conduct and the condition, so consulting a doctor will not necessarily absolve the employer of liability. The only other avenue open to an employer in defending such a claim is to show that the unfavourable treatment was a proportionate means of achieving a legitimate aim.

City of York Council v Grosset [2018] EWCA Civ 1105

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The Court of Appeal has considered the circumstances in which an employer will be held liable for acts of discrimination committed by their agents.

The Equality Act 2010 states that an act of discrimination committed by an agent will be treated as an act done by the principal, but the circumstances in which this rule will apply are not always clear. The Court of Appeal in this case has confirmed that union workplace officials are agents for this purpose, with the result that the union can be held responsible for acts of discrimination committed by its officials.

This case concerned Ms Nailard, a regional officer employed by Unite the Union. Part of Ms Nailard’s job was to liaise with elected union officials on site at Heathrow Airport; those included Mr Saini and Mr Coxhill, both of whom were employed by Heathrow Airports Limited, but carried out union-related duties full-time. Both Mr Saini and Mr Coxhill were later found to have subjected Ms Nailard to sexual harassment, and the Court of Appeal held that Unite was liable for it on the basis that they were agents of the union. The test is whether the discriminatory acts were done in the course of Mr Saini’s and Mr Coxhill’s performance of the functions Unite had authorised them to undertake. This was satisfied regardless of the fact that the subject of the harassment, Ms Nailard, was employed by Unite directly.

The employer’s liability in cases such as these is strict. An employer is able to avoid liability for acts of discrimination or harassment committed by its employees if it can show it took reasonable steps to prevent those acts from happening. However, this defence is not open to the employer when the perpetrator of the discriminatory acts is its agent. Therefore, the employer could potentially be fixed with liability no matter what steps it has taken and whether or not it knew about the conduct in question.

Unite the Union v Nailard [2018] EWCA Civ 1203

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The Supreme Court has confirmed that a contract can validly prohibit variations being made to it orally.

Whilst clauses requiring that amendments to a contract be made in writing are commonplace, there has previously been some uncertainty as to how effectively they work in practice. The Supreme Court has now made clear that such clauses (often referred to as ‘no oral modifications’ clauses) will be enforceable in order to give effect to the parties’ intentions at the time the contract was made.

The facts of the case themselves concern a commercial contract relating to a licence over property. Despite the contract containing a ‘no oral modifications’ clause, the licensee sought to argue that an oral agreement to revise the payment schedule had been effective. The Supreme Court unanimously held that the ‘no oral modifications’ clause in the contract could not be ignored, such that the agreed variation had not been effective. In including the clause in the contract, the parties had agreed that certain formalities would have to apply in order to modify the contract, and that agreement had a legitimate, commercial basis.

Whilst this case concerned the terms of a commercial contract, the principle in relation to ‘no oral modification’ clauses is likely also to apply to employment contracts. An employer who wants to control the form of the agreement with their employee can therefore do so in two ways: it can use an ‘entire agreement’ clause to override any oral agreements prior to the written contract being agreed, and can use the ‘no oral modifications’ clause to ensure that any variations once the contract has been finalised are effected in writing.

Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24

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The EAT has clarified the circumstances in which an employee can fairly be dismissed for gross misconduct.

Gross misconduct is defined as conduct which is so serious that it undermines the employer’s trust and confidence in the employee and entitles it to dismiss without further notice. Usually, this will be a single, clear act of serious misconduct. However, the EAT has held that this need not be the case, and gross misconduct can be comprised of a series of acts of misconduct which would not be sufficient reasons to dismiss if taken individually.

The employer’s decision to dismissal summarily was found to be fair on the facts of this case. The employer was an NHS Foundation Trust, and it had introduced new Department Rules and Responsibilities to the Trauma and Orthopaedics department. Having notified all staff that compliance with the new rules would be monitored, a subsequent investigation found non-compliance by 5 consultants in the department. Disciplinary action against three of the consultants resulted in a first written warning, a final written warning and a resignation respectively. In contrast, the Trust concluded that the allegations against the fourth consultant, Mr Mbubaegbu, were cumulatively serious enough to justify summary dismissal on grounds of gross misconduct. This is despite the fact that Mr Mbubaegbu had previously worked for the Trust for 15 years with an unblemished disciplinary record.

The EAT held that Mr Mbubaegbu had not been unfairly dismissed. It stated that it was not necessary for an employer to point to a single act and identify it as gross misconduct, as a series of acts can be serious enough to undermine the relationship of trust and confidence between the employer and employee.

This case emphasised that the right way to look at a gross misconduct dismissal is to consider whether the employee’s conduct had undermined the employer’s trust and confidence in them. The misconduct does not necessarily have to take a particular form for that to be so. Fundamentally, this does not change the inquiry expected of the employer in relation to misconduct; it remains necessary in every case for an employer to keep an open mind as to the appropriate level of sanction, whatever the nature of the allegations against the employer.

Mbubaegbu v Homerton University Hospital NHS Foundation Trust UKEAT/0218/17

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