UK HR Two Minute Monthly - September 2021

Bryan Cave Leighton Paisner
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Legal professional privilege, litigation advice privilege, iniquitous principle, unfair dismissal, right to appeal, unlawful protection from wages claim, income protection payments

EAT concludes that an email sent prior to a disciplinary hearing, indicating the employer’s intention to dismiss an employee in any circumstances, did not fall within the “iniquity” exception to litigation privilege.

Confidential communications between a party to an employment tribunal and its legal advisers are protected pursuant to the doctrine of legal professional privilege. However, the “iniquity principle” means that legal professional privilege will be lost where a document or communication is created for the purpose of furthering criminal or fraudulent activity.

In Abbeyfield (Maidenhead) Society v Hart Mr Hart was dismissed for gross misconduct. He subsequently submitted a Data Subject Access Request (“DSAR”) and presented several claims at the employment tribunal, including a wrongful and unfair dismissal claim. During the tribunal proceedings Abbeyfield identified a number of communications between Abbeyfield and third party HR consultants which it said were inadmissible by reason of litigation privilege. The tribunal agreed with Abbeyfield’s position, save in respect of one communication from the appeal officer which stated that Mr Hart would not be returning in any circumstances. In light of the view expressed by the appeal officer, and noting the email was dated two months before the decision to dismiss was taken, the tribunal concluded that it would be iniquitous to allow Abbeyfield to defend the unfair dismissal claim.

Abbeyfield appealed this decision and the EAT upheld the appeal. The EAT did not consider the email amounted to iniquitous conduct and found that the tribunal had erred by not considering the nature of the email. It found that Abbeyfield had not sought advice on how to act unlawfully, neither did the HR consultants give such advice. The EAT also observed the finding made by the Court of Appeal in Curless v Shell International, namely that the iniquity principle does not apply where a communication/document contains “mundane legal advice” as opposed to advice to act in an underhand or iniquitous way. The email in question was not therefore “iniquitous” and was protected by litigation privilege.

Mr Hart also cross-appealed the tribunal’s decision stating it had erred in finding that the DSAR emails were privileged. He argued that Abbeyfield had waived privilege when it voluntarily provided them to him. The EAT allowed his appeal but remitted the matter back to the tribunal for reconsideration.

Why this matters?

The EAT’s decision demonstrates that there is a high bar when trying to prove the application of the iniquitous  exception to litigation privilege, bearing in mind the email in question seemed to indicate that Abbeyfield had made the decision to dismiss two months before the dismissal meeting. The circumstances in which it will apply are likely to be rare. However, employers and their external advisers should nonetheless be mindful of what is set out in written communications in order to ensure a claimant cannot argue that the decision to dismiss was pre-determined.

Abbeyfield (Maidenhead) Society v Hart

If an employer refuses to hear an appeal, can the decision to dismiss still be fair?

Yes, (in certain circumstances) found the EAT.

In G Moore v Phoenix Product Development Limited the Claimant presented a claim for unfair dismissal following the termination of his employment on the grounds of “some other substantial reason” (“SOSR”). The Claimant was the inventor of a water-efficient toilet and a founder and CEO of the Respondent which manufactured and marketed the toilet. The Claimant was replaced by a new CEO in 2017 and, whilst he remained an employee and director of the Respondent and agreed to make things work with the new CEO, he had difficulty accepting that he was no longer in charge and that the Respondent was no longer “his” company. Following a series of incidents the Respondent’s Board lost trust and confidence in the Claimant and were of the view that the Claimant’s conduct was contrary to the best interests of the company. Given the irretrievable breakdown in the relationship, it was decided the Claimant should be dismissed.

No right of appeal was offered and whilst the Claimant made submissions in respect of his dismissal, his complaints were treated as a grievance rather than an appeal and in any event were not upheld.

The tribunal rejected the Claimant’s claim. It acknowledged the lack of an appeal was a serious omission in any unfair dismissal case. However, it also noted that the ACAS guidance is phrased in such a way so as to give a Claimant a right to appeal but does not give a respondent a corresponding duty to inform the Claimant of the right. In light of the circumstances, namely the Claimant’s conduct, the size of the Respondent’s organisation, and the fact that the relationship had broken down, the tribunal considered the appeal would have been futile. Furthermore, given the Claimant didn’t appeal his grievance despite being informed of his right to do so, the tribunal was of the view that he was unlikely to appeal his dismissal. The dismissal was therefore found to be fair in the circumstances.

The Claimant appealed to the EAT on a number of grounds but his appeal was not upheld. The EAT agreed that the absence of an appeal in itself did not render the dismissal unfair. Whilst it held that an appeal will normally be part of a fair procedure, it acknowledged that will not invariably be so as the Employment Rights Acts requires the tribunal to take into consideration all the circumstances when deciding whether an employer acted reasonably or unreasonably.

Why this matters?

Whilst this case found that a failure to offer a right to appeal did not in itself render the dismissal unfair, it did highlight that this decision was taken because of the facts of this case. The EAT observed that, had the Claimant appealed and the Respondent refused to hear it because it thought it was futile, then it may have decided differently. We would therefore recommend employers still give employees an opportunity to appeal a dismissal and take appropriate steps to hear such an appeal if submitted in order to minimise the risk of unfair dismissal claims.

G Moore v Phoenix Product Development Limited

EAT finds that an employer was liable to pay income protection payments (“IPP”) set out in an offer letter and summary of benefits prior to a TUPE transfer, despite the fact that the entirety of the payments were not covered by the employer’s insurance.

In Amdocs Systems Group Ltd v Langton Mr Langton received an offer letter and summary of benefits when he commenced employment with his previous employer in 2003. These documents set out his entitlement to IPP, which included an “escalator” of 5% per annum which would apply after the first 52 weeks. In 2006 Mr Langton’s employment transferred under TUPE to Amdocs and he was informed that his IPP entitlement would not be affected by the transfer. When Mr Langton began a period of long-term sickness absence in 2009 he received IPP but was told that the escalator had not been and would not be applied. Mr Langton therefore presented a claim for unlawful deduction of wages. The employment tribunal found that he was contractually entitled to have the escalator applied in the calculation of IPP.

Amdocs appealed the decision but the appeal was not upheld. Essentially, AmDocs said that Mr Langton’s entitlement to payments was limited and governed by the IPP insurance policy, not by AmDocs’ contractual documentation. The EAT  considered  previous authorities in respect of IPP and similar benefits and noted that the documentation provided in those cases told the employees the benefit existed and the circumstances in which it would be provided, which in turn, conveyed a contractual commitment. In particular, if the benefit was covered by/subject to an insurance policy, this needed to be made very clear to the employee. The EAT  found that, regardless of the limitations and terms of insurance cover, Mr Langton’s contract of employment, together with the offer letter and summary of benefits, were contractually binding and the language in respect of the IPP was one of entitlement (including the escalator). The EAT did not accept that the operation of the IPP scheme was governed by the terms of the group insurance policies and the policies had the effect of limiting Mr Langton’s entitlement. In this regard, it said that if reliance is to be placed on a term in an insurance policy which seeks to limit what has been expressly stated elsewhere, further steps need to be taken to bring those policy terms to the attention of the employee, which did not happen. The EAT also found that as Mr Langton’s previous employer had made the commitment in respect of the IPP benefit (including the escalator), Amdocs was bound to honour it regardless of whether it was backed by insurance cover.

Why this matters?

This case reminds employers why it is important to consider carefully the drafting of contractual IPP and similar provisions and ensure that the contractual documents set out that any liability will be subject to and limited to the amounts received from the insurer. It also serves as a useful reminder to employers to check carefully the level and precise wording of IPP protection on a TUPE transfer. In particular, if the benefit is provided by and subject to terms of an insurance policy, this should be made very clear to the employee to avoid a direct liability on the part of the employer.

Amdocs Systems Group Ltd v Langton

Round up of other developments

Inquiry launched into menopause in the workplace: the House of Commons has launched an inquiry into workplace issues in respect of menopause. The inquiry is set to examine whether existing discrimination legislation adequately protects women who suffer adverse consequences in the workplace as a result of menopausal symptoms. The inquiry will draw up recommendations in an attempt to address gender inequality in the workplace.

Older workers and disabled workers may retire later if they can work from home: figures from the Office of National Statistics show that in June and July 2020, workers aged 50 and over who worked remotely during the covid-19 pandemic were more than twice as likely to say they planned to retire later in comparison to those who did not work from home during the pandemic.

[View source.]

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