ABG Employment Newsletter – February 2016

Monitoring of personal messages on work-related internet messaging account did not breach right to privacy

The European Court of Human Rights (ECHR) has handed down a decision on the right to privacy under Article 8 of the ECHR, in the context of a private sector employer’s monitoring of an employee’s work-related Yahoo Messenger account. The employee was dismissed for personal internet use at work, contrary to the employer’s internal rules. As part of its investigation the employer accessed intimate messages sent by the employee to his fiancee and his brother. These messages were printed by the employer and used in the disciplinary proceedings as well as in the employee’s subsequent court challenge. The Romanian courts upheld the employee’s dismissal, and the ECHR held that the monitoring of his internet usage and the use of the Yahoo messages in disciplinary proceedings was a proportionate interference in his Article 8 rights.

The case received a great deal of media coverage, some of it giving the misleading impression that the decision gives employers a green light to snoop on employees’ personal emails. However, the decision does not overrule previous ECHR case law on the reasonable expectation of privacy and the need for any interference in privacy to be proportionate. Nor does it override existing UK legislation, including the Data Protection Act 1998 and the Regulation of Investigatory Powers Act 2000, which place important limitations on employers’ power to monitor their employees’ private communications using company facilities

Injury to feelings compensation payment taxable as termination payment

The Upper Tribunal (Tax & Chancery Chamber), upholding the decision of the First-tier Tribunal, has held that a settlement payment for injury to feelings made in connection with a termination of employment was taxable as a termination payment under section 401 of the Income Tax (Earnings and Pensions) Act 2003. The payment was made to settle all the taxpayer’s claims against the employer including claims for age discrimination arising during the redundancy selection process.

The Upper Tribunal’s decision confirms that the tax treatment of compensation for discrimination depends on whether the discrimination is connected with the termination. Here, the alleged discrimination arose from the termination itself and accordingly the compensation was taxable. Compensation for discrimination that occurs before termination is not connected with the termination and therefore is not taxable. This apparent anomaly arises from the wide scope of section 401.

EAT rules on correct approach to comparators in an age discrimination claim

The Employment Appeal Tribunal (EAT) has addressed the question of comparators in a direct age discrimination case. An employee aged over 50 who was denied the opportunity to apply for voluntary redundancy during a reorganisation was able to compare his treatment with two employees under 50 who applied successfully for voluntary redundancy. The EAT ruled that the fact that employees over 50 were entitled to early retirement benefits under the pension scheme (making their severance costs much higher than for employees aged under 50) was not a “relevant circumstance” which could render the comparison invalid. Since the extra cost was a direct result of the employee’s age, it was prima facie direct discrimination for the employer to have taken it into account. The EAT remitted the case to the tribunal to determine whether the employer’s actions were objectively justified.

Court of Appeal holds disciplinary sanctions under sickness absence policies are subject to the reasonable adjustments duty

The Court of Appeal has dismissed a claim that an employer failed to make reasonable adjustments by not extending the point at which disciplinary action could be taken under its attendance management policy and by failing to disregard periods of sickness absence. It held that, on the evidence, the tribunal had been entitled to conclude that neither of these steps were reasonable for the employer to take.

However, the Court overturned the conclusion of both the Employment Tribunal and the Employment Appeal Tribunal (EAT) that an absence management policy, under which all employees, both disabled and non-disabled, were treated equally, was not capable of placing a disabled employee at a substantial disadvantage and that therefore the duty to make reasonable adjustments was not engaged. The Court of Appeal emphasised that the duty to make reasonable adjustments goes beyond equal treatment and requires employers to take positive steps.

The Court of Appeal’s judgment helpfully resolves the confusion surrounding reasonable adjustments and absence management policies and makes it clear that an employer should have regard to the duty to make reasonable adjustments when issuing disciplinary warnings for sickness absence.

Exercise of contractual discretion in bonus awards

The High Court has given summary judgment against a financial trader’s claims for breach of contract in relation to his employer’s exercise of its discretion to award him an annual bonus. The employee argued that, in awarding him a significantly smaller bonus than two of his colleagues, his employer breached an express contractual term to treat him consistently with his “peers” and the implied term to act in good faith and rationally. The High Court held that the employer had sound reasons for awarding the two colleagues a guaranteed bonus on a formula basis as opposed to a discretionary bonus like the claimant and breached neither its express nor implied obligations.

Negative verbal reference resulting in withdrawal of job offer was discrimination arising from disability

The Employment Appeal Tribunal (EAT) has held that an Employment Tribunal erred in its approach to burden of proof when it found that a claimant had failed to establish a prima facie case of discrimination arising from disability. When a disabled person’s job offer was withdrawn, following a negative verbal reference from their former employer, the Tribunal should not have focused on whether there were neutral reasons why the manager providing the reference had formed a negative view of the individual. Rather, the Tribunal should have considered whether sickness absences, which arose out of disability, played a part in that negative assessment. In this case, it was clear that they could have done, so a prima facie case was made out. Further, this was one of the rare cases where it was possible to conclude that unlawful discrimination had taken place.

Instruction not to speak native language at work was not race discrimination

The Employment Appeal Tribunal (EAT) has upheld an Employment Tribunal’s decision that an instruction to an employee not to speak Russian at work was not direct race discrimination or race harassment. The employer has a reasonable explanation for its actions which was unrelated to the employee’s nationality or national origins. Taken in the context of the employer’s activities in carrying out animal testing and the security requirements arising from this, it was reasonable for it to ask the employee, who had been acting suspiciously, to refrain from speaking in her native language in order that conversations in the workplace were capable of being understood by its English-speaking managers.

Employer failed to make reasonable adjustments when requiring disabled employee to attend competitive interview (ET)

An Employment Tribunal has upheld a claim for failure to make reasonable adjustments, brought by a disabled NHS employee who failed to achieve the required score in a competitive interview for an internal post. The employee, whose existing position was at risk of redundancy, indicated that he wanted to proceed with the interview, despite having been signed off sick while he was receiving cancer treatment. The Tribunal found that while it was necessary to have some form of assessment, the employer should have carried this out on the basis of existing data about his performance, including appraisals from previous posts. However, it was not necessary to lower the pass mark to accommodate the employee’s impaired performance at interview.

The failure to appoint the employee to the role also amounted to discrimination arising from his disability. He was unsuccessful because of his poor performance at interview, which had been adversely affected by his condition. Rejecting a justification argument, the Tribunal doubted whether there could be a legitimate aim of selecting the best candidate for the job, in a context where a disabled candidate can lawfully be given more favourable treatment than a non-disabled candidate. A more appropriate aim may be to appoint a person who could perform to the required

The comments in this note are of a general nature only. Full advice should be sought on any specific problems or issues.


Christopher Gigg  [email protected]  +44 (0)115 934 3308

Kathryn Meir [email protected]  +44 (0)115 9343310