No, in almost all circumstances, held the Court of Appeal in North West Anglia NHS Foundation Trust v Gregg. 

Where employees are suspected of having committed misconduct, such as theft, fraud, assault or substance abuse, complications can arise where there is a criminal investigation into the behaviour which is also the subject of an internal disciplinary investigation.  Most employers will not wish to wait for the outcome of criminal proceedings before conducting the disciplinary hearing, particularly if the employee has been suspended on full pay, as this will usually take several months.

FACTS:  Dr Gregg was employed as a consultant anaesthetist by North West Anglia NHS Foundation Trust (the Trust). In 2016 the Trust became concerned about the deaths of a number of patients under Dr Gregg’s care and launched an investigation while suspending him on full pay.  At the same time, the Trust notified the police and the General Medical Council. In May 2017, the Interim Orders Tribunal (part of the General Medical Council) imposed an interim suspension order on Dr Gregg and, in light of this, the Trust suspended his salary.

Dr Gregg’s lawyer advised him not to participate in a disciplinary hearing as he would risk prejudicing himself in the criminal investigation. The Trust refused to adjourn the hearing but then Dr Gregg successfully obtained an interim injunction in the High Court, preventing the Trust from continuing with its investigation until the police investigation was complete.  The High Court also found that the Trust was in breach of contract for not continuing to pay Dr Gregg his salary during the interim suspension.

The Trust appealed to the Court of Appeal.

HELD: The Court of Appeal overturned the High Court injunction, holding that employers do not have to postpone disciplinary proceedings to wait for the outcome of criminal investigations.  However, the Court upheld the High Court’s decision that Dr Gregg should have been paid his salary during his interim suspension.

The Court found that the Trust had not been entitled to withhold Dr Gregg’s pay during his period of interim suspension because:

1. the interim suspension was for the purpose of preserving the position until more was known about the allegations, rather than as a sanction.
2. the express terms of Dr Gregg’s contract of employment did not permit the deduction of pay during an interim suspension, nor was there any evidence that this had become an implied term of the contract by custom and practice.
3. Dr Gregg had remained ready, willing and able to work even though the decision of the Interim Orders Tribunal had removed his registration to do so.

The Court ruled that where the contract did not address the issue of pay deduction during suspension, the default position should be that an interim suspension should not attract the deduction of pay.  Exceptional circumstances, such as a complete or part admission of guilt, might justify such a deduction, but did not arise in this particular case.

With regard to pursuing an internal disciplinary process in parallel with an investigation by the police, the Court established the following principles:

1. An employer does not usually need to wait for the conclusion of any criminal proceedings before commencing or continuing internal disciplinary proceedings or dismissing an employee.
2. The court will usually only intervene if the employee can show that the continuation of the disciplinary proceedings gives rise to a real danger of a miscarriage of justice in the criminal proceedings if the court does not intervene.

In this case, the Court held that there was no evidence that the Trust’s actions in progressing the disciplinary process without waiting for the outcome of the police investigation would have had any effect on the criminal investigation or give rise to a real danger of a miscarriage of justice.

The Court also held that it would not have been wrong for the Trust, having started to investigate alleged misconduct, to ‘side-step’ the conduct disciplinary process by considering dismissal on the basis of Dr Gregg losing his registration to practice.  His contract allowed for alternative grounds for dismissal and starting one process did not prevent the Trust from relying on another.

Comment:  It is rare for an employee to obtain injunctive relief in the course of disciplinary proceedings.  Such cases are usually confined to the public sector where contractual disciplinary procedures and potentially career-ending allegations are more common.

However, this decision makes clear that an employer does not usually have to wait for the outcome of a criminal investigation before proceeding with an internal disciplinary process.  It should be noted that the standard of proof for the courts where a crime is alleged is ‘ beyond reasonable doubt’  whereas the question for the employer in carrying out a disciplinary procedure is whether it had a genuine belief, on reasonable grounds, that the employee conducted themselves in the manner alleged.

With regard to suspension this decision confirms that, without a contractual right to do so, it is unlikely that an employer will be able to stop an employee’s pay during a period of suspension and is consistent with the Acas Code of Practice on Disciplinary and Grievance Procedures which states that ‘suspension should not be considered a disciplinary action’.

No, held the Court of Appeal in Harpur Trust v Brazel.

Workers in Great Britain, including part-time workers have a right to a minimum of 5.6 weeks’ paid annual leave under the Working Time Regulations 1998 (WTR).  How this applies to a worker with no normal working hours can be difficult to establish.  A common approach is to say that the worker accrues holiday entitlement at the rate of 12.07% of hours worked, based on the fact that the standard working year is 46.4 weeks (that is, 52 weeks less the statutory 5.6 weeks holiday entitlement) and 5.6 weeks is 12.07% of 46.4 weeks.

FACTS:  Mrs Brazel was a part-time music teacher engaged under a permanent zero-hours contract.  She worked variable hours, typically giving between 20 and 30 half-hour lessons a week.  The school year varied between 32 and 35 weeks. Mrs Brazel was therefore a part-time worker in two senses, firstly that she did not work a full working week and, secondly, that during the school holidays, she did not work at all.  It is the second type of part-time working with which this case is concerned.

Mrs Brazel’s contract stated that she was entitled to 5.6 weeks paid annual leave in line with the WTR and that she was required to take this during school holidays.  As the school holidays were far longer than 5.6 weeks, no particular weeks were designated as statutory holiday but by agreement the Trust made three annual payments in respect of holiday. Following Acas guidance, the Trust calculated Mrs Brazel’s earnings at the end of each term and paid her one third of 12.07% of that figure.

Mrs Brazel argued that this resulted in her being underpaid.  She argued that the ‘week’s pay’ calculation set out in section 224 of the Employment Rights Act 1996 (ERA) for workers without normal working hours, which would involve taking her average earnings over the 12 weeks immediately before holiday were taken, would result in holiday pay of around 17.5 % of her earnings for the term. She brought claims in the employment tribunal for unlawful deductions from wages for the difference as well as a claim asserting less favourable treatment on grounds of part-time status. The employment tribunal dismissed her claims.  It held that a principle of pro-rating should apply and that the statutory scheme should be read for part-time workers, who worked fewer than 46.4 weeks per year, so that payment was capped at 12.07% of annualised hours. Mrs Brazel appealed to the Employment Appeal Tribunal (EAT) in relation to the correct calculation of holiday pay only. The EAT upheld her appeal, finding that the tribunal had erred in capping her holiday pay at 12.07% of annual earnings. The EAT held that there was no requirement in the WTR to pro rate holiday for part-time employees to ensure that full-time employees were not treated less favourably and the tribunal should have applied the straightforward calculation prescribed by section 224 of the ERA.  The Trust appealed to the Court of Appeal.

HELD:  Lord Justice Underhill, giving the Court of Appeal’s judgement, noted that the issue was whether Mrs Brazel’s holiday entitlement should be reduced to reflect the fact that she was a ‘part-year’ worker, a phrase used by him to describe someone who did not work throughout the year.  He accepted that EU law requires only that workers accrue entitlement to paid annual leave in proportion to the time that they work but he concluded that it was not mandatory to adopt this approach and more particularly, there was no requirement in EU law to pro-rate the leave entitlement of part-year workers to that of full-year workers. He acknowledged  that at first sight not applying the pro-rata principle could lead to anomalous results if part-time workers worked a few weeks a year but still had 5.6 weeks’ holiday a year. However, he was not persuaded that this was unprincipled or obviously unfair.  It was important that Mrs Brazel was on a permanent contract and it was not unreasonable to treat that as a sufficient basis for fixing the amount of holiday entitlement, irrespective of the number of hours, days or weeks that she might have to perform under the contract; the actual days from which she would be relieved, and the amount of her holiday pay would reflect her actual working pattern. Given the wide spectrum of working arrangements, be it part-time, part-year or casual, there is an obvious attraction to having the same entitlement for all permanent employees.

Lord Justice Underhill accepted that this approach would lead to odd results in extreme cases such as the cricket coach or exam invigilator, whose services are required for only a few weeks a year.  However, general rules sometimes produce anomalies and it would be unusual for those who work for only a few weeks a year to be on a permanent contract as opposed to being engaged on a free-lance basis.

On a natural construction of the WTR, there is no provision for pro-rating and an employer should simply carry out a straightforward exercise of identifying a week’s pay in accordance with the provisions of section 224 of the ERA where there are no normal working hours and multiplying that figure by 5.6.

Comment:  Although Lord Justice Underhill made clear in this judgement that the ruling only applies to holiday entitlement and pay for those on permanent contracts, it could potentially lead the way for casual workers not employed on a permanent contract to argue that their holiday pay should also not be subject to the 12.07% cap. It should also be noted that Lord Justice Underhill emphasised that the case was about ‘part-year’ workers and not part-time workers, who work part of a week, and so the conclusions are inapplicable to part-time but full-year workers.  Where there are part-year workers on a permanent contract, be it in respect of anything from offshore oil rigs to education, the approach in this case should be followed.

No, held the Employment Appeal Tribunal in Raj v Capita Business Services Limited 

FACTS:   Mr Raj was employed by Capita Business Services Limited (CBS) as a customer service agent.  When he was dismissed, with under a year’s continuous service, he brought claims of sexual harassment under the Equality Act 2010, alleging that on several occasions, while he sat at his desk his manager, who was female, stood behind him and gave him a shoulder, neck and back massage.  He claimed that this was:

• unwanted conduct ‘related to sex’, a protected characteristic, which is prohibited conduct under the Equality Act where the conduct has the purpose or effect of –
• violating B’s dignity, or
• creating an intimidating, hostile, degrading, humiliating or offensive environment for B; and
• unwanted conduct ‘of a sexual nature’, which is prohibited conduct under the Equality Act where both –
• A engages in unwanted conduct of a sexual nature, and
• the conduct has the purpose or effect of either violating B’s dignity, or creating an  intimidating, hostile, degrading, humiliating or offensive environment for B.

HELD:  The employment tribunal rejected the harassment claims. Although it found that the conduct was unwanted, and that it had the effect of creating an intimidating, hostile, degrading, humiliating or offensive environment for Mr Raj, it concluded that the conduct was not related to sex, nor of a sexual nature. Although Mr Raj’s manager had tried to argue that she had done no more than tap Mr Raj’s shoulders on one occasion, the employment tribunal found that the evidence established that there was contact of a massage type lasting two or three minutes, which was long enough to make Mr Raj feel uncomfortable.  However, there was little evidence that the purpose behind it was a link to Mr Raj’s sex. Instead, the tribunal concluded that the purpose of the manager’s conduct was ‘misguided encouragement’ accompanied by words of praise to an underperforming employee. The tribunal took into account the fact that the contact was with a gender neutral part of the body, it had taken place in an open- plan office and the manager had not behaved in a comparable way to any other employee, male or female.  Although the conduct was unwise and uncomfortable, it was not harassment as prohibited under the Equality Act.  Mr Raj appealed to the Employment Appeal Tribunal but the employment tribunal’s decision was upheld. 

Comment: It is easy to assume in the age of #MeToo that any unwanted physical contact between a manager and a junior employee would amount to sexual harassment.  However, this decision highlights:

• how each case turns on its own facts. For example, the outcome may have been different  if the manager had been male and the junior employee had been female; and

• how important it is for a claimant to satisfy all aspects of the legal definition to succeed in a claim for sexual harassment. 

That said, it is clear that the decision does not encourage or condone any physical contact in the workplace and employers should ensure that their anti-harassment policy and training explains  this so as to avoid any potential misunderstandings.

In this issue of OGR Stock Denton Employment Law Update we consider  a question we are often asked by our clients, whether employees are permitted to make covert recordings at work, say in a disciplinary or grievance meeting.

Making a covert recording in an age where almost everyone owns a smartphone is a very straightforward and accessible thing to achieve and means that employees are now able to make secret recordings of meetings with very little effort whereas in the past  to achieve this would have taken considerable organisation on the employee’s part. This issue was considered by the Employment Appeal Tribunal (EAT) in the recent case of Phoenix House v Stockman.

It may be helpful if we first consider the facts of this case.

THE FACTS

The Claimant, Mrs Stockman worked as a financial accountant for Phoenix House, a charity. She complained she was unfairly treated during a restructuring process, and while in a meeting with the head of HR she covertly recorded the meeting.  Mrs Stockman was successful in her claim of unfair dismissal against the Respondent. She had been dismissed due to an irretrievable breakdown of relationships, which was not connected to the covert recordings. The tribunal held that this decision was unreasonable and the process that was followed to reach the decision was unfair. It was only during this tribunal claim that it was revealed that Mrs Stockman had covertly recorded the meeting. The Employment Tribunal (ET) found that Mrs Stockman did not make the recordings for entrapment purposes but rather because she was flustered at the time and reduced the compensatory award by 10% to reflect her conduct.

The Respondent appealed the ET’s decision, arguing that had it known about the recording it would have dismissed Mrs Stockman for gross misconduct and that her compensation should therefore be reduced to nil. They argued that Mrs Stockman’s conduct of covertly recording the meeting was a breach of the implied term of mutual trust and confidence.

THE EAT’S DECISION.

The EAT dismissed the appeal. They held that the ET had been entitled to find that Mrs Stockman had not recorded the meeting with the intention of entrapment. She had recorded a single meeting because she was concerned about her own position rather than with the intention of obtaining confidential information of the business. The EAT also provided helpful guidance on some of the relevant factors to consider when determining whether or not a covert recording could be justified. These factors are as follows:

1. The purpose

The purpose of the recording was relevant, the EAT stated that as Mrs Stockman was not using the covert recording to deceive her employer it could not be gross misconduct; they said

“The purpose of the recording will be relevant; and in our experience the purpose may vary widely from the highly manipulative employee seeking to entrap to the confused and vulnerable employee seeking to keep a record and guard against misrepresentation.”

It is therefore important to consider the reasons why an employee may want to record the meeting. Do they simply want to protect their position and have a clear and accurate record of the meeting or are there any other, more complex, reasons that may make you suspicious.  

2. Knowledge

An employee’s knowledge that their actions may constitute misconduct or gross misconduct is always a relevant factor. In this case the EAT observed that employers rarely list covert recording as an example of gross misconduct in their disciplinary policies, although they added that this may now change. The EAT did state that it “considered it good employment practice for an employee or an employer to say if there is any intention to record a meeting save in the most pressing of circumstances – and it will generally amount to misconduct not to do so.”

As always, each case will turn on its own facts. You must look at each situation individually. Is this a case where a naïve and inexperienced employee just wants to make a record of their meeting for their own purposes, and doesn’t really have an understanding about what they are doing? Alternatively is this more a case of an employee who has been specifically told that a recording must not be made and then lied about it?

3. Content

What is being recorded is also relevant.  If this was a meeting to discuss highly confidential business of the employer or personal information or information about other people compared with a meeting of which a record would normally be kept anyway.

PRACTICAL POINTS

So what does all the above mean to you in practical terms? Here are some practical steps you can take.

• At the start of any meeting, whether it is under a disciplinary or a grievance procedure, make it clear that recordings are prohibited and ask that employees turn off mobile phones at the beginning of the meetings. Make it clear that if despite this warning, they still make a covert recording, then this may be regarded as gross misconduct.
• If an employee does record a meeting without informing you, then as set out above, this will generally amount to misconduct. However, it will not necessarily amount to gross misconduct – that will require consideration of all the facts of the particular circumstances.
• If you are in a situation where you want the meeting recorded then it remains good practice to communicate this from the outset. Although both sides should consider how desirable it is for meetings to be recorded sometimes it can often change the way people behave, it can make people feel inhibited and can sometime prevent a honest exchange of views from taking places.
• You may want to revisit your disciplinary policies specifically to include covert recording in the list of examples of gross misconduct.
• It is also important to note that even if covert recording amounts to gross misconduct, the contents may still be disclosable as evidence in an Employment Tribunal. Therefore when conducting disciplinary and grievance hearings it is important to behave in a way that would be happy for a tribunal to hear. In Punjab National Bank ( International ) Ltd and others v Gosain the EAT determined covert recordings were admissible evidence at the final hearing, and this included comments made while the claimant was out of the rooms and the private deliberations of the panel were secretly recorded. In general, tribunals do not like using recordings as evidence but will use them in circumstances where the parties have a dispute as to what was said and a recording can determine this issue conclusively.

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!