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Proportionality and data subject access requests

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An employer must only conduct a proportionate search, and give a proportionate response, to data subject access requests it receives.

The Court of Appeal was faced with two cases concerning requests for further steps to be taken to comply with data subject access requests. In the first, Ittihadieh, the Claimant put in a DSAR to a right to manage company operating in respect of the building within which he owned a property. The Claimant expressed a concern that the members were “swapping, retaining and otherwise using personal information about him” and indicated that he intended to bring proceedings. The company disclosed 400 redacted documents, including one which referred to a separate file of documents which the company did not disclose.

In the second case, Deer, the Claimant had brought various claims against her former employer, Oxford University. She put in two wide-ranging DSARs; in response, the university disclosed some limited documentation but refused to provide information relating to the litigation. After the Claimant put in a further DSAR, the university eventually did disclose some more documents it had previously withheld. The Claimant, still dissatisfied with the extent of disclosure, applied for an order for further searches to be undertaken relating to 22 people within a specified date range. As the Court granted the order, the university reviewed a further 500,000 documents at a cost of £116,116. Having conducted this review, the university disclosed a further 33 documents.

The Court of Appeal refused to order either company to take further steps in relation to the DSARs. In Ittihadieh’s case, it was held that further searches would be “wholly disproportionate”, and in Deer’s case, that they would serve no useful purpose. It confirmed that data protection legislation was not intended to impose great burdens on data controllers and that a search can still be sufficient even if a controller has not searched high and low for personal data.

Employers faced with a DSAR from an existing or former employee therefore should not feel obliged to carry out an exhaustive search for personal data. If the person making the request then challenges that decision, employers should feel able to defend a little more bullishly against the suggestion that it should carry out overly lengthy or costly investigations.

Ittihadieh v 5-11 Cheyne Gardens RTM Company Ltd & others [2017] EWCA Civ 121

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At what point does a notice sent by post take effect?

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Unless there is an express contractual term stating otherwise, notice of termination of employment sent by post will take effect once the recipient has personally taken delivery of the letter.

Ms Haywood was employed by an NHS Trust. She was put at risk of redundancy at a consultation meeting, at which point she told the Trust she was due to go on holiday overseas. On 20 April 2011, the Trust sent 3 letters to Ms Haywood giving 12 weeks’ notice of her dismissal. The first was sent by recorded delivery; as Ms Haywood was not home, a slip was left at her house on 21 April. Ms Haywood’s father-in-law collected the letter from the sorting office on 26 April and left it at her house. Ms Haywood read the letter on 27 April, a few hours after her return from her holiday. The second letter was sent by standard post, and it is unclear what happened to it. The third was sent by email to Ms Haywood’s husband by email, which he read on 27 April.

The Trust would have to pay Ms Haywood a higher pension if she was dismissed after her 50th birthday; in order to avoid that, notice of termination must have been effective by 26 April 2011. The Trust argued that it had been.

The Court of Appeal noted that there was no express term in Ms Haywood’s employment contract specifying when notice sent by post would be effective. Where this is true, it held that notice will only take effect once the employee personally takes delivery of it. In Ms Haywood’s case, that meant that her notice was effective from 27 April 2011 (the date she read the hard copy letter; service to her husband’s email address was not valid given that she had not given permission for the Trust to communicate with her using it). The Trust was therefore obliged to pay a higher pension sum.

In light of this decision, employers may want to include in their contracts a provision stating when notices sent by post will be considered effective (2 days after the date of posting, for instance) in order to remove ambiguity.

Newcastle upon Tyne NHS Foundation Trust v Haywood [2017] EWCA Civ 153

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Wrongly advertising an apprenticeship is now an offence

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According to new legislation, it is now an offence for a training provider to use the word ‘apprenticeship’ to refer to an arrangement which is not a statutory apprenticeship.

The stated aim of the provision is to protect the quality of apprenticeships and to prevent lower quality schemes which do not meet the legal requirements from damaging the reputation of apprenticeships which do.

The offence is summary only, so the maximum penalty on conviction is a fine.

The Enterprise Act 2016 (Commencement No. 3) Regulations 2017 (SI 2017/346)

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Poor attitudes to organisational change can be gross misconduct

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An employee’s poor attitude towards organisational changes within their employer’s business could amount to gross misconduct.

Ms Adeshina was the Principal Pharmacist in Wandsworth Prison. Medical service provision at the prison was initially nurse-led, but a decision was taken to move towards a pharmacist-led approach. Ms Adeshina was resistant to this change. A letter was sent to her to institute a disciplinary investigation. Among the allegations in that letter was “failure as Head of Pharmacy Services at HMP Wandsworth to be cooperative and to support and lead the major service change in the Pharmacy Department which has resulted in a negative impact on the new treatment centre”.

The investigation report concluded that the allegations were founded. It described Ms Adeshina’s conduct by reference to 4 categories of gross misconduct set out in its disciplinary policy: bringing the Trust into “disrepute”; “serious insubordination”; “negligence”; and “verbal abuse”. Following a disciplinary hearing, Ms Adeshina was summarily dismissed for gross misconduct.

Ms Adeshina brought a number of claims in the Employment Tribunal. At the Court of Appeal, she argued that her conduct was not capable of amounting to gross misconduct, and could not have justified summary dismissal.

The Court of Appeal held that the employer was entitled to view Ms Adeshina’s conduct, in terms of her poor attitude to the changes to the structure of medical treatment at the prison, as amounting to gross misconduct. It found nothing wrong in the employer saying that Ms Adeshina’s conduct fell into a number of categories listed in its disciplinary policy. In any event, the Court held that a finding that Ms Adeshina had been “ostentatiously disengaged” or “expressing strongly disaffected views” could be evidence of gross misconduct by itself.

Employers can take some degree of reassurance from this case; not only does it confirm that a poor attitude to management decisions can found a dismissal in some circumstances, but it also shows that it is not critical to the fairness of a dismissal to give a consistent label to the misconduct alleged.

Adeshina v St George’s University Hospitals NHS Foundation Trust and others [2017] EWCA Civ 257

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Employers must now pay Immigration Skills Charge

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Employers must now pay an Immigration Skills Charge of up to £1,000 per year for each skilled migrant they employ.

New regulations mean that employers must pay a fee, called the Immigration Skills Charge, for every skilled migrant they sponsor under the Tier 2 (General) or Tier 2 (Intra Company Transfer) categories. The fee per migrant is £1,000 per year for larger companies and a reduced rate of £364 for smaller companies.

It is the employer’s responsibility to pay this fee, and failure to do so will mean that a certificate of sponsorship is invalid.

The Immigration Skills Charge Regulations 2017

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No need to prove reason for disadvantage in indirect discrimination

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In order to successfully establish indirect discrimination, claimants do not have to prove the reason why a practice puts their affected ethnicity, gender, etc. at a particular disadvantage.

The Supreme Court has considered two cases concerning indirect discrimination. The first, Essop, concerned the Home Office’s Core Skills Assessment test, which had to be completed successfully in order to progress past a certain level of seniority. The Claimants were a group of employees from black and minority ethnic backgrounds over the age of 35; on the basis of statistical evidence, they argued that they as a group were less likely to pass the test, and were therefore at a particular disadvantage.

The second, Naeem, concerned the Prison Service’s pay structure, which contained a scale based in large part on length of service. The Prison Service had only begun employing non-Christian chaplains in 2002 (prior to that, they had been engaged on a sessional basis). Mr Naeem, a Muslim chaplain who began his employment in 2004, argued that the length of service criterion therefore put Muslim chaplains at a particular disadvantage.

Considering these cases, the Supreme Court held that there is no need for Claimants to prove the reason why a particular practice puts a group at a particular disadvantage. It was therefore not a problem that the Claimants in Essop had not done so. What was instead necessary was to show that the disadvantage was caused by the practice (as opposed to something unconnected, such as not turning up for the test), and the statistics the Claimants had put forward in relation to test results for black and minority ethnic staff over the age of 35 were evidence of that. The “context factor” for the disadvantage could involve all sorts of things, including genetics (such as a height requirement), social norms, or traditional employment practices.

The Supreme Court also held that the “context factor”, which, in Naeem, was the shorter average length of service of Muslim chaplains, need not be related to the protected characteristic. By analogy, it reasoned that there is nothing peculiar to being a woman which explains why they usually take a larger share of caring responsibilities.

These clarifications are helpful to Claimants seeking to establish indirect discrimination. However, the Supreme Court also emphasised that an employer will still always have the opportunity to show that its practice was justified, and therefore not discriminatory. This was the outcome in Naeem, as it was legitimate and proportionate for the Prison Service to reward longer service with higher pay.

Essop and others v Home Office (UK Border Agency); Naeem v Secretary of State for Justice [2017] UKSC 27

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British Gas refused permission to appeal on holiday pay case

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British Gas has been refused permission to appeal to the Supreme Court over a decision that holiday pay must include results-based commission.

Mr Lock was employed by British Gas. Although he received a basic salary, 60% of his overall remuneration comprised commission on sales achieved. However, his holiday pay was calculated solely by reference to his basic pay, and was therefore considerably less than his usual pay. As a result of this, Mr Lock brought a claim against his employer.

The European Court of Justice, Employment Appeal Tribunal and Court of Appeal all ruled that statutory holiday payments must include a representative proportion of the results-based commission Mr Lock would normally receive.

The Supreme Court’s refusal means that it is now set in stone that employers must factor such pay elements into the 4 weeks’ statutory holiday; however, as the underlying right originates from European law, it is unclear at this stage whether there will be any revisions post-Brexit.

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Employer given £2 in damages for misuse of confidential information

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An employer who had sought £15 million in damages for misuse of its confidential information has been awarded only £2 for its former employees’ breaches of their confidentiality duties.

Marathon Asset Management LLP is an asset management firm and one of its founders, Mr Seddon, left to set up a competing business, taking with him a number of Marathon’s staff. Among those staff was Mr Bridgeman. Marathon brought a claim in the High Court against Mr Seddon and Mr Bridgeman alleging that they had taken its confidential information before they left the firm.

Mr Bridgeman admitted that he had copied a large number of Marathon’s confidential documents on to a USB stick before he left, and that he retained them for some time. He conceded that, in doing so, he was in breach of contract. Some of the documents Mr Bridgeman had downloaded to his USB stick were accessible to him because Mr Seddon had previously moved them to a shared drive.

All parties agreed that Mr Seddon had not used any confidential information. Mr Bridgeman had used a small number of documents, but that use had not caused Marathon any significant loss.

Marathon argued that it should be entitled to damages of £15 million, representing the value of the confidential information taken. Marathon assessed that this sum would have been a reasonable charge for releasing the ex-employees from their duties of confidentiality.

The High Court recognised that both Mr Seddon and Mr Bridgeman had been in breach of their duties of confidentiality and their contracts. However, those breaches had not caused Marathon any loss, and there was nothing to show that either Mr Seddon or Mr Bridgeman had made any gain. Therefore, the High Court held that there was no justification for anything more than nominal damages of £2. This equated to £1 per defendant.

This case illustrates that it is not the risk of loss which matters, but the actual loss suffered. An inability to quantify the amount of loss is not necessarily a problem, but being unable to show any loss at all most likely will be.

Marathon Asset Management LLP and another v Seddon and another [2017] EWHC 300 (Comm)

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5 top tips for employers following ‘gig economy’ cases

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The phrase ‘gig economy’ has entered common parlance since the Employment Tribunal cases involving Uber, City Sprint, Pimlico Plumbers and the upcoming case of Deliveroo. It is also unlikely to go away any time soon as Uber has been granted leave to appeal the decision that its drivers were workers. The appeal is scheduled for 27 and 28 September 2017.

Whilst the gig economy at present is relatively small, amounting to a mere 2% of the total recruitment market, it is expected to be worth up to £2 billion to the economy by 2020. Little wonder then that there is so much scrutiny on this issue.

Given the high profile recent cases and that determining a person’s employment status is not an easy exercise, employers can be forgiven for being somewhat alarmed. Whilst there is no one-stop test to determine employment status, the following 5 top tips can assist in addressing concerns employers may have:

1)  Evaluate the workforce

Look at the existing (and future) workforce – identify those on contracts of employment and those who you intend to retain on a contractor or self-employment basis. Ensuring the correct status of the latter will be the focus here.

2)  Look at the Contract

It seems obvious, but the starting point for all these cases is to look at the terms of the contract between the company and individual – does it state it is a contract of employment or does it refer to the individual as a contractor? What rights and obligations do each party have under the contract? On what basis is the individual being paid – a fixed amount, annually, per project? Is the length of the contract determined or is it for a fixed term or for a specific project? Are the facilities and equipment required to perform the tasks provided by the company or the individual?

Unfortunately from a company’s point of view, the issue does not stop here. Tribunals can and do also look behind the terms of the contract to see how the relationship operates in practice.

3)  Consider how the relationship operates in practice

If an individual asserts they are a worker, chances are they will claim that what happens in practice is different to the terms agreed under the contract and/or the intention of the parties when entering into the contract. In these circumstances, the Tribunal will look at various factors to determine the status of the individual, including, but not limited to:

• Mutuality of obligation: Is the company under an obligation to provide the individual with work? Is the individual under an obligation to accept work when it is given? A yes to both tends to indicate worker status.
• Personal service: Does the individual have to perform the tasks themselves or can they appoint someone else to do this on their behalf? Does the company have any say in who can perform these services on their behalf? Have substitutes ever been appointed in practice? No personal service and the freedom to appoint a substitute without the company’s involvement or approval may indicate self-employment status.
• Control: How much control is exerted by the company on how, what, when and where the tasks are provided? Is the individual expected to abide by the company’s standard of behaviour and dress? Generally, the more control exerted by the company, the more likely it is that the individual is a worker.
• Integration: To what extent is the individual integrated into the company’s business? Do they have a company email address? Are they in the company’s internal directories or on the website? Do they have a company business card? Do they perform substantially the same work as employees of the company? Individuals who are at arms length to the business, its operations and its staff are less likely to have worker status.
• Marketing services to the world at large: Is the individual free to provide services to other companies? Are there any restrictions on what they can do/who they can provide services to following termination of the contract with the company? An individual who can and does work elsewhere and can advertise and market their services to other companies is less likely to be found to be a worker.
• Taxation status: Although it is not determinative, if the individual is responsible for payment of their own tax and National Insurance Contributions and for registering for VAT, this indicates self-employment status.

4)  Hold a conversation

Having considered the checklist of factors above, reflect on whether any individuals may fall into this worker status category. Consider whether the company does in fact want the individual to be an employee to ensure exclusivity of their service.

Discussions with the individual should be held carefully – there is a risk in highlighting the possibility of worker status, and thus making known the entitlement to such rights as holiday pay, rest breaks, national minimum wage, not to be discriminated against or subject to a detriment for raising whistleblowing concerns and potentially auto-enrolment in to the company’s pension scheme. To negate this, undertake this as part of a review of the policies and procedures across the company as a whole.

5)  Consider amendments to contracts and business practices

If there are areas of the business where contractors are more integrated or have a large amount of control exerted over them, consider ways in which to put the relationship at an arm’s length in practice. Allow more flexibility in how, what, when and where the services are provided, reduce the regularity of the individual’s service, limit the services to a specific time period or project, negate the need to attend the company’s premises and reduce the interaction with the company’s staff. Consider amending the contract to reflect their independent status and reducing the obligations imposed on them.

Just a note of caution on this – Tribunals have heavily criticised employers for having overly elaborate contracts or for trying to conceal what happens in practice. Some companies have failed to take heed of this. It was reported in the Guardian on 6 April 2017 that Deliveroo has recently brought in fresh terms for the company to use when referring to the couriers – these individuals are neither workers nor staff, but ‘independent suppliers,’ they are not hired but are ‘on-boarded’, and their branded outfits are not uniforms but ‘equipment’ or ‘kit.’ As the Tribunal in the Uber case quoted, ‘the lady doth protest too much, methinks.’

If you or you company has any concerns over an individual’s employment status, do not hesitate to get in touch.

Samantha Prosser, Associate

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Government responds to pregnancy and maternity discrimination report

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The Government has responded to the Women and Equalities Committee’s report on pregnancy and maternity discrimination in the workplace.

The House of Commons Women and Equalities Committee released a report last year expressing concerns about the treatment of pregnant women and new mothers at work. The report stated that the number of new and expectant mothers who had been forced to leave their jobs had almost doubled since 2005. It stated that “the situation is likely to decline further unless it is tackled effectively now”, and called upon the Government to take urgent action.

The report set out a total of 21 recommendations for the Government to take forward. Among them were the following:

• extending the typical 3-month limitation date for bringing a Tribunal claim to 6 months for pregnancy-related discrimination cases;
• substantially reducing the Tribunal fees for pregnancy-related discrimination cases from the current total of £1,200 (which is the issue and hearing fees combined);
• giving women protection from redundancy for 6 months after returning from maternity leave; and
• assuring that protections for women would not be diminished due to the UK’s vote to leave the EU.

The Government has since released its response to the report. At the outset it states that the Government takes the issue of pregnancy and maternity discrimination very seriously and that it is committed to tackling the problem. It also provided responses to the WEC’s specific recommendations as follows:

• in relation to the limitation date, the Government did not see sufficient evidence to show that the 3-month time frame was acting as a barrier to women looking to bring tribunal claims. It noted that the Tribunal has the discretion to accept discrimination claims submitted after the limitation date where it is just and equitable to do so. However, it agreed to keep the matter under review.
• in the Government’s separate review of the fee regime, it stated that the evidence suggests that the drop in pregnancy and maternity discrimination claims is lower than for other forms of discrimination. It therefore could not see the case for singling out this kind of claim for special fees treatment.
• the Government agreed that the proportion of mothers being made redundant (which research suggests is 6%) is unacceptable. It therefore committed to consider means for ensuring that sufficient protection is afforded to pregnant women and new mothers.
• the Government assured that leaving the EU will not lead to a reduction in employment rights, and pointed to the fact that UK maternity rights already go further than the minimum prescribed by EU law.

Although the Government in its response has rejected a number of the WEC’s recommendations, it did agree to look further into mothers’ protections against redundancy, so further updates are expected in future.

Government response to the House of Commons Women and Equalities Committee report on pregnancy and maternity discrimination

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Refusal to permit a 5-week holiday was not religious discrimination

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The refusal of a Catholic employee’s 5-week holiday to attend religious festivals was not indirect religious discrimination.

Mr Gareddu was a practicing Roman Catholic originating from Sardinia. He worked as an engineer for the London Underground. Mr Gareddu was contractually entitled to 38 days’ holiday per year inclusive of bank holidays, and in the past he had been permitted to take 5-week long holidays in summer to return to Sardinia.

A new manager was allocated to Mr Gareddu from March 2013. The new manager told Mr Gareddu that he would not be permitted to take 5 consecutive weeks’ annual leave again in the following year, and that a limit of 15 consecutive days would apply in future. Though Mr Gareddu’s 2014 break was permitted to go ahead because it was pre-booked, his request for 5 weeks’ leave in 2015 was rejected.

Mr Gareddu challenged that refusal on the basis that it was indirectly discriminatory on the basis of his religion. He argued that he utilised the 5-week holiday to attend 17 or 18 ancient Roman Catholic festivals in Sardinia held in and around August each year, and that London Underground’s 3-week limit therefore put him at a particular disadvantage compared to those without the same religious beliefs.

The Employment Appeal Tribunal rejected Mr Gareddu’s argument and agreed with the Employment Tribunal’s decision that he had not been discriminated against. Evidence elicited at trial showed that Mr Gareddu had not attended any festivals whilst in Sardinia in 2014 due to injury, and in 2013 had only attended 9 of the 17 or 18 festivals he stated were important to his beliefs. The EAT accepted that it was not a problem for Mr Gareddu to have mixed motivations for taking the 5-week holiday, so the benefit of seeing his family did not defeat his claim; however, the notion that he was required to attend the full regimen of festivals each year did not appear to be a genuine reason for his holidays.

In this case, had the need to attend the festivals been found to be a genuine reason for the need to take an extended holiday, the disadvantage to Mr Gareddu may have been made out. However, it may then have been possible for London Underground to assert that their decision was justified as a proportionate means of achieving a legitimate aim.

Gareddu v London Underground Ltd UKEAT/0086/16

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Whistleblowers must identify the legal obligation alleged to be breached

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A whistleblower making disclosures about potential wrongdoing must express a reasonable belief that an identifiable legal obligation has been breached or will be breached. It is not enough just to say something is wrong.

Ms Korshunova was a sales executive for Eiger, a broking business. Eiger would use Bloomberg Chat to liaise with traders, and Ms Korshunova found that Mr Ashton (the managing director) had been using her profile to speak to clients without identifying himself. Ms Korshunova said that it was wrong for Mr Ashton to impersonate her and asked IT to change her password (which Mr Ashton had said would be gross misconduct).

Some weeks later, three of Ms Korshunova’s accounts were transferred to junior brokers. After two trading errors and an argument with Mr Ashton, Ms Korshunova was invited to a disciplinary hearing for ‘failure to follow instructions and poor performance’. Ms Korshunova was dismissed following a disciplinary hearing which she declined to attend. The reason given for dismissal was that she had failed to carry out the reasonable instructions of a superior (in the form of misusing Eiger’s equipment by changing her password and turning off her computer) and had quoted the incorrect prices to customers.

Following an unsuccessful internal appeal, Ms Korshunova brought Employment Tribunal claims alleging whistleblowing detriment in the removal of her accounts and automatically unfair dismissal on the grounds of making protected disclosures.

The Employment Appeal Tribunal found that the detrimental treatment actually came as a result of Ms Korshunova’s insubordination. Whilst it was accepted that Ms Korshunova genuinely believed that Mr Ashton must have breached some legal obligation in impersonating her on Bloomberg Chat, she could not say what the obligation was. There needed to be some form of identifiable legal obligation in order to establish whether the belief was a reasonable one.

This case shows that a whistleblower must do more than express a belief that the employer’s actions are wrong. A protected disclosure needs to actually set out something identifiable, whether legislation, regulatory rules or industry guidance, that the employer is in breach of.

Eiger Securities LLP v Korshunova UKEAT/0149/16

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