OGR Stock Denton LLP employment solicitor says that recent Supreme Court decision will give employers “some comfort”

Hayley Trovato, a Senior Associate Solicitor at OGR Stock Denton LLP, has said that a recent Supreme Court decision concerning the use of non-competition restrictive covenants in employment contracts will give employers “some comfort”.

The landmark case [Tillman v Egon Zehnder Ltd] concerned the ability of employers to prevent former employees from taking up work with competitors, potentially taking with them vital commercial knowledge, market insight and know-how.

Hayley Trovato said: “Employers can, to some extent, take some comfort from the long-awaited decision of the Supreme Court this week in Tillman v Egon Zehnder Ltd.

“In unanimously allowing the appeal, the Supreme Court ruled that the offending words in the non-competition restrictive covenant could be removed from the clause without damaging the rest of the covenant, making it enforceable, even though it was accepted that the employer had drafted this restriction in very broad and therefore unreasonable terms.  As a result, the injunction was restored.

“It has been over 100 years since the Supreme Court has looked at the rules on restrictive covenants and while this is good news for those employers looking to enforce restrictive covenants, a cautious approach is still recommended.

“Employers should ensure that restrictive covenants are drafted responsibly and no wider than reasonably necessary to protect a legitimate business interest.

“Although the Supreme Court allowed the employer to enforce the other parts of its non-competition clause, there was a suggestion that unreasonable drafting by employers could result in costs orders being made against them.

“This case should act as a stark reminder to employers of the need to review their restrictive covenants regularly in order to ensure their enforceability.”

If you would like us to review these for you please contact either Susan Bernstein or Hayley Trovato.

 

Employers must record Working Time

It should be noted that the Court of Justice of the European Union (CJEU) held in a case referred to it from Spain – Federacion de Servicos de Comisiones Obreras (CCOO) v Deutsche Bank SAE that employers must keep records of hours worked to fulfil their obligations under the European Working Time Directive. The court decided that if there was no such requirement, it would be impossible to determine objectively and reliably either the number of hours worked or when the work was done so as to benefit from the limitation on weekly working time and minimum daily and weekly rest periods provided by the Directive. 

The Working Time Regulations 1998 do not currently require employers to keep records of hours worked and the Government will have to amend the Regulations if EU law remains in force in the UK – a matter, for which at the time of writing this update, we need a crystal ball!

Was it unlawful disability discrimination to refuse employment because of a perception of a risk of future inability to work in a particular role?

Yes, held the Court of Appeal in Chief Constable of Norfolk v Coffey.

It has generally been understood that the Equality Act 2010 (the Act) protects individuals, who do not have a protected characteristic, where the alleged discriminator thinks that they do. However, in the case of disability discrimination, a tribunal might first have to determine whether an employer perceived a physical or mental impairment to have a sufficiently substantial and long term adverse effect on the individual’s ability to carry out normal day-to-day activities so as to satisfy the statutory definition of ‘disability’.

Facts:  Mrs Coffey was a police officer in the Wiltshire Constabulary.  She suffered from some hearing loss but it had never caused her any problems in doing her job and since she was able to do her normal day-to-day activities, it did not constitute a disability within the meaning of the Act.  In 2013 she applied for a transfer to the Norfolk Constabulary but it was refused because, as a result of a medical test, the Acting Chief Inspector for Norfolk (Chief Inspector) rejected Mrs Coffey’s application on the basis that her hearing did not meet the national standards. Mrs Coffey brought a disability discrimination claim, arguing that she had been discriminated against because the Chief Inspector perceived her to have a disability and that the decision to reject her application was direct disability discrimination. Her claim succeeded in the employment tribunal which found that the Chief Inspector had perceived Mrs Coffey to have an actual or potential disability which could progress to the extent that she would need to be placed on restricted duties and this amounted to direct discrimination. The Constabulary appealed to the Employment Appeal Tribunal but the appeal was dismissed.  The Constabulary then appealed to the Court of Appeal.

Held: The Constabulary argued that the requirements of the role of a front-line police officer were exceptional and could not be said to be ‘normal day-to-day activities’.  However, the Court held that while it was accepted that the work of front-line officers was in many respects unique, often challenging and sometimes dangerous, the activities for which good hearing was relevant were nevertheless normal day-to-day activities for the purpose of the Act. It followed that the Chief Inspector’s belief that Mrs Coffey’s hearing loss would, currently or in the future, render her unable to perform the duties of a front-line police officer was a perception that it would have an effect on her ability to carry out normal day-to-day activities.  It also followed that any such effect would be substantial and adverse, at least if, as the Chief Inspector appeared to have assumed, it would lead to Mrs Coffey being taken off front-line duties.

Having decided that the Chief Inspector believed that Mrs Coffey’s impairment might at some time in the future result in her being unable to perform the role of front-line police officer, the remaining question was whether to refuse employment because of such a perception of a risk of future inability to work as a front-line officer fell within the terms of the Act.  This required consideration of whether Mrs Coffey had a progressive condition as defined by the Act.  The Court found, on the evidence, that she did and as such she should be treated as disabled within the meaning of the Act. It went on to hold that the Chief Inspector had  directly discriminated against Mrs Coffey because the Chief Inspector had acted on the basis of a stereotypical assumption about the effects of what the Chief Inspector perceived to be Mrs Coffey’s (actual or future) hearing loss.

Comment: This is the first case to directly address perceived discrimination under the Act so it is helpful that the Court of Appeal has confirmed that claims based on a perception of disability are permissible.

Is there an implied term in an employment contract that an employer will not dismiss an employee on the ground of capability during a time when they are entitled to the payment of disability income under a long-term disability plan?

Yes, on the facts, held the Employment Appeal Tribunal in Awan v ICTS.

Facts: Mr Awan was a longstanding employee of American Airlines in its security department.  His contract of employment entitled him to permanent health benefits – a long-term disability plan in respect of which American Airlines had an insurance policy with Legal & General to cover payments made under the plan.   In October 2012, Mr Awan was certified as unfit to work because of depression and went on sick leave. In December 2012, American Airlines outsourced its security department to ICTS.  Accordingly, Mr Awan’s employment transferred to ICTS under TUPE as did the employer’s obligations under the long-term disability plan but not the insurance policy with Legal & General.

Mr Awan remained off sick until he was dismissed on 28 November 2014 on account of there being no perceived likelihood of him returning to work and an inability to agree any adjustments that might facilitate it.  By this time, he had been in receipt of payments under the long-term disability plan.  Mr Awan claimed ICTS’ decision to dismiss him while he was still entitled to long-term disability benefits was unfair and was also an act of unlawful discrimination arising from his disability.  The employment tribunal found that ICTS had acted reasonably in dismissing Mr Awan on the basis that he was permanently incapable of carrying out his role and that his dismissal was not discriminatory as it could be objectively justified in the circumstances.  Mr Awan appealed on the basis that there was an implied term in his contract of employment preventing dismissal for incapability whilst he was receiving benefits under the plan.

Held: The Employment Appeal Tribunal held that, on a proper construction of the contract of employment, it was contrary to the functioning of the long-term disability plan to permit ICTS to exercise its express contractual right to terminate on notice since this would deny Mr Awan the very benefits which the plan envisaged would be paid.  It held that a term could be implied into Mr Awan’s contract to provide that once an employee becomes entitled to payment of disability income due under the long-term disability plan, the employer will not dismiss him on the grounds of his continuing incapacity to work.  Accordingly, the dismissal was in breach of contract (wrongful dismissal).  As to unfair dismissal, dismissal in breach of contract is not necessarily unfair but the contractual position was held to be “very relevant indeed” as part of the circumstances against which the reasonableness of the employer’s actions were to be judged and the questions of whether the dismissal was fair and was not discriminatory were remitted to a fresh tribunal for consideration.

Comment:  Employers could consider whether to ensure that the contract of employment limits the duty to pay the employee under any such plan to the extent that the insurer indemnifies such payments.  In addition, it is a clear warning to transferees under TUPE to seek appropriate indemnities from the transferor.

Is it discriminatory not to pay male employees enhanced shared parental pay of an amount equivalent to the enhanced maternity pay which an employer has made available to its female employees?

No, held the Court of Appeal in two recent separate cases – Ali v Capita Customer Management and Hextall v Chief Constable of Leicestershire Police. When the Shared Parental Leave Scheme was introduced in 2015 there was much debate about whether employers who paid enhanced maternity pay would be obliged to match those benefits for anyone taking shared parental leave (SPL). There is no statutory requirement for them to do so but the question decided in these two cases by the Court of Appeal was whether an employer who offered enhanced maternity pay would discriminate against its male employees if it failed similarly to enhance shared parental pay.

The Ali case centres round ‘direct sex discrimination’ which occurs where, because of sex, A treats B less favourably than A treats or would treat others.

The Hextall case centres round ‘indirect sex discrimination’ which is concerned with  policies or other rules and practices that appear neutral in that they apply to everyone regardless of sex but have the effect of disadvantaging employees of one sex unless the employer can show that they are justified.

Facts:   a) Mr Ali  – Mr Ali was entitled to two weeks’ paternity leave at full pay and then up to 26 weeks’ additional paternity leave, for which he would receive statutory shared parental pay (ShPP).  His female colleagues were entitled to enhanced maternity pay comprising 14 weeks’ full pay followed by 25 weeks’ statutory maternity pay.  An employment tribunal held that Mr Ali had been directly discriminated against on the grounds of his sex but when Mr Ali’s employer, Capita, appealed to the Employment Appeal Tribunal, it upheld Capita’s appeal. It held that there was no direct discrimination because the purpose of the Statutory Parental Leave Scheme is different from maternity leave in that the primary purpose of maternity leave is the health and wellbeing of the mother whereas parental leave focuses on the care of the child.  Accordingly, a father taking shared parental leave is not in a comparable situation to a mother taking maternity leave. 

b) Mr Hextall – Mr Hextall took 14 weeks of shared parental leave and was paid ShPP.  His employer, Leicestershire Police, had a policy paying 18 weeks’ maternity leave at full pay.  An employment tribunal dismissed Mr Hextall’s claims of direct and indirect discrimination on the grounds of his sex.  Mr Hextall appealed the decision that he had not been indirectly discriminated against but his appeal was dismissed by the EAT. It was held (among other things) that the correct pool for comparison could only consist of employees on shared parental leave and any disadvantage to Mr Hextall would have been justified as a proportionate means of achieving the legitimate aim of the special treatment of mothers in connection with pregnancy or childbirth.

Both Mr Ali and Mr Hextall appealed to the Court of Appeal. 

Held:   a) Mr Ali – The correct comparator in Mr Ali’s direct discrimination claim was a female on shared parental leave (not a female on statutory maternity leave).  That comparator would be paid the same as Mr Ali and therefore his direct discrimination claim failed. The Court explained that the predominant purpose of statutory maternity leave was for the safety and health of pregnant employees or employees, who had recently given birth or were breastfeeding unlike shared parental leave, the predominant purpose of which was childcare.

b) Mr Hextall – Mr Hextall was precluded from bringing an indirect sex discrimination claim because it was not the provision, criterion or practice (PCP) of paying only the statutory rate of pay for those taking a period of statutory parental leave that caused a particular disadvantage to men in his position compared with women.  Mr Hextall’s actual case was that men were disadvantaged not by the PCP but by the fact that only a birth mother was entitled to statutory and contractual maternity pay.  Since the correct pool of individuals for comparison purposes must contain persons whose circumstances are the same or not materially different from the claimant’s, women on maternity leave, who are materially different from men and women on shared parental leave, should be excluded from the pool.

Comment: These decisions of the Court of Appeal will be welcomed by employers with enhanced maternity pay policies.  However, the take up rate of shared parental leave by fathers has been very low since its introduction and the reason for this could well be because the rate of pay the father would receive would be much less than that received by the mother.  It should be noted that both Mr Ali and Mr Hextall are seeking permission to appeal to the Supreme Court.

Workplace surveillance: what you need to know

No one wants to feel that they are not trusted or that they are being watched. While the relationship between an employer and employee is intended to be one based upon mutual trust and confidence, the digitisation of the workplace has brought a whole host of new ways for employers to monitor their employees.

Why Monitor? 

In many workplaces monitoring employees is standard practice. Reasons for monitoring can vary greatly.  There are situations where companies monitor their employees to protect them. For example, if work is being carried out in a dangerous environment it is vital to ensure that safe working practices are being followed. In some areas of work, employers may have a legal or regulatory need to carry out some monitoring.  In the majority of cases, employers simply want to ensure that their employees are getting on with the job they are paying them to do.

Types of monitoring

There are a number of ways that monitoring can take place in the workplace such as via recording on CCTV cameras, checking an employee’s emails, checking phone logs, recording phone calls or checking websites employees have visited.

The legal framework

There is no one data privacy law in the UK, which specifically governs monitoring of employees. There is no express permission given anywhere allowing monitoring nor is there anything preventing it. Along with the development of the various ways in which monitoring can take place the legal framework which governs its use has also had to develop.

  • Article 8 of the European Convention on Human Rights provides for the right to respect for family life.
  • Electronic forms of workplace surveillance involve the processing of personal data are regulated by the General Data Protection Regulation (GDPR).  This sets out the principles with which the data controllers must comply when processing personal data and which are relevant and any monitoring undertaken by an employer.
  • The Investigatory Powers Act 2016 and Regulations 2018 governs the interception of electronic communication during transmission.
  • There is also the duty of trust and confidence that is implied into an employee’s contract, this is important as employer’s monitoring may constitute a breach of this duty, depending on the circumstances. 

Whatever your reasons for monitoring employees you must be clear that they are proportionate. Once you have taken the decision to monitor your employees then it is essential that you make them aware that this is taking place.

Policies and Procedures

Before embarking on any monitoring you must ensure that you have appropriate policies and procedures in place. This type of information is normally included in an email or electronic communications policy, either within an employee handbook or as part of the employees contract of employment.  This policy should be given to employees at the start of their employment and employees should be asked to state that they have read the policy and accept its terms. Your policies and procedures need to be clear in telling employees if they are being monitored and what counts as a reasonable amount of personal email, telephone calls and time spent on the internet.  If personal telephone calls or emails are not allowed then this should be made clear. If there are certain websites that are not allowed to be accessed, this should also be stated. 

In addition, the GDPR requires employers to carry out an impact assessment in order to identify any negative effects the monitoring may have on employees. You should also consider whether there are any other options to monitoring that are less invasive and that the monitoring is justified.

Employment Practices Code

Part 3 of the Information Commissioner’s Employment Practices Code contains guidance on monitoring at work.  It makes clear that employees should be able to understand when they can be monitored on the basis of information given to them by the employer. Although failure to comply with the codes recommendations is not unlawful, parts of the code can be taken into account in the event of enforcement action being considered. The principles of Employment Practices Code are that employees should be made aware of the circumstances in which the monitoring may take place, the nature of the monitoring and how any information obtained through monitoring will be used. They should also be informed of what safeguards are in place; simply telling them verbally is unlikely to be sufficient. The code states that employees need have a clear understanding of:

  • the information that is likely to be obtained
  • why it is being obtained
  • how it will be used
  • who, if anyone, the information will be disclosed to

Be clear

Even  where you can justify monitoring employees’ activities, it is always advisable to try and strike a balance between a legitimate need to run your business and respect for your employees’ private information and activities. It is often the case where employers allow their employees some freedom to use the phone, internet and email for occasional personal use If a half way approach is taken to allowing access to the internet then the rules of this approach should be clearly set out in the company policy in order to avoid any problems.

In Scarlett and another v Gloucester City Council ET/1401395/12 two employees were dismissed for using the internet for personal reasons during work hours. The employment tribunal held the dismissal to be unfair on the basis that there was an informal custom that employees could make personal use of the internet outside of core hours. The employees had not tried to disguise their internet use from their managers and the firms ICT policy allowed personal use if employees adhered to other requirements of the policy relating to internet misuse. 

CCTV Monitoring

If there is CCTV monitoring then you must be sure that the employees are aware of this and they are given the reasons for the monitoring. This can be done quite easily by displaying signs to say where the locations of the cameras are.  Any signs need to be clear, visible and readable and contain details of the person in charge of the surveillance and who to contact about the scheme including information such as their website address, telephone number or email address.  Where possible the CCTV monitoring should be targeted at the areas of particular risk and only in areas where expectations of privacy are low.  If covert monitoring is being considered then this should only be authorised in circumstances where there are grounds to suspect a criminal activity is taking place. It is only in rare circumstances that covert monitoring can be justified.

In City and County of Swansea v Gayle UKEAT/0501/12  covert surveillance was put in place to monitor an employee who regularly took time off during working hours to play squash. When it was confirmed, the employee was dismissed.  During the unfair dismissal hearing, the tribunal found that the employer had breached Article 8 by putting the employee under covert surveillance. Following an appeal to the EAT they found that the surveillance was proportionate on the basis that the employer was entitled to know where the employee was during paid hours and the employee should not expect such things to be private

Conclusion

While you do have the right to monitor many activities at work, the data protection law is clear about the rules and circumstances in which monitoring can be carried out.  Be transparent with your employees about the reasons for monitoring and the benefits it can bring while also identifying any negative affects the monitoring may have by carrying out an impact assessment. If employees are aware of the intention to monitor from the outset then this overcomes any expectations of privacy on their part.  Be sensitive to the fact that employees may understandably feel concerned about monitoring so try and strike a fair balance between an employee’s expectation to privacy and your own commercial interests.

North London employment lawyer gives her five top tips for dealing with smartphones in the workplace

A North London-based employment lawyer has given her five top tips for dealing with the use of smartphones in the workplace.

Hayley Trovato, a Senior Associate Solicitor at Finchley-based OGR Stock Denton LLP, commented after the Prospect union said that an increasingly wide range of employers are asking employees to hand over their smartphones before starting work.

“Given the ubiquity of smartphones in modern life and their near-addictive properties, it is little wonder they are becoming a source of conflict between employers and employees.

“However, good practice can mitigate the chances of conflict arising. Having a clear policy on the use of mobile phones in the workplace means that situations such as this can be avoided easily. If employees know what to expect from the outset, then there can be no surprises, reducing areas where problems could arise,” said Hayley.

She added: “As with all policies, there need to be communicated clearly to employees, so they know they exist. They should also be applied fairly and consistently.”

Hayley suggested five top tips for employers dealing with smartphones in the workplace, noting that the applicability of each will vary according to the nature of the work an organisation is engaged in:

  1. Set clear boundaries as to if and when smartphone use is permitted. This could either be a total ban on employees having their smartphones on them at all or just limiting their use to break and lunchtimes. This decision with often depend on the nature of the work. If you do have a total ban on employees having their phones, then you should offer a safe place for employees to store them, such as a locker and ensure that the employee can be contacted by family members on another number in the event of an emergency.
  2. It may sound obvious but if an employee needs to take a personal call, then they should leave the room and do this in a separate area. Taking the occasional call may be necessary and as urgent situation often arise, but having employees catching up with their friends on their phone during work time is not acceptable.
  3. If you do let employees have their phones on them, then stress that phones should be on silent, vibrate or switched off. This will minimise the disruption of having a variety of noisy ringtones blaring out throughout the office.
  4. In some jobs, being on a mobile phone can pose a health and safety risk – such as while driving or operating machinery. For those jobs where employees are dealing directly with customers, being on a mobile phone is not good customer service.
  5. Be clear about employees spending time going on to the internet via their phone. The occasional email may be acceptable and sometimes necessary but prolonged periods spent on Instagram or doing online shopping is not.