We expect you will be looking forward to a well-earned break over the forthcoming Christmas period. Perhaps you will be the recipient of wonderful Christmas gifts from your grateful employees. Far be it from us to put a damper on your enjoyment but just make sure that any gifts you receive from or give to anyone else do not constitute a bribe. We make no apology in this edition for expanding on a particular part of the forthcoming Bribery Act. Thrilling it may not be, but coming this way it certainly is.
Finally, the importance of complying with Data Protection Rules has been seen in a recent case: see below. This would seem to be the ideal opportunity to tell you that we have now launched a service offering advice on Intellectual Property and Information Technology issues, including how to be compliant with data protection legislation. Do contact us for further details of our service.
Meanwhile we wish you all a happy Christmas and an even more prosperous New Year.
If you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email email@example.com
The Employment Law Team
Some Recent Changes and Cases in Employment Law
1. LIABILITY OF EMPLOYER FOR REFERENCE
There are not many reported cases on how ex-employers can be liable as a result of giving a reference for a former employee, and ironically one such case is a recent one against a firm of solicitors. The firm gave a poor reference to an ex-employee because she had successfully pursued a discrimination claim against the firm. The reference commented on the discrimination claim, the employee’s “poor relationship” with the firm’s partners and added that she was “inflexible” in her opinions. The employee had received a job offer but when the new employer received the reference it withdrew the offer. The Employment Tribunal found that both the new and the ex-employer had unlawfully discriminated against the employee. On appeal the EAT (Employment Appeals Tribunal) held that the new employer’s withdrawal of the offer was not only foreseeable but a “direct and natural consequence” of the information supplied in the reference. The ex-employer was liable for the employee’s future lost earnings (which had been caused by the withdrawal of the job offer). [Bullimore v Pothecary Witham Weld Solicitors & Anor (2010)]
2. PSYCHICS AND RELIGION/BELIEF
This was another case on the meaning of “religion or belief” under the Employment Equality (Religion and Belief) Regulations 2003. The Claimant was a psychic who believed not only in life after death but also that the dead could be contacted and was a member of the Spiritualist Church. The Employment Judge applied the guidance from an earlier case which is whether such belief had sufficient cogency, seriousness, cohesion and importance, and was worthy of respect in a democratic society. The Judge, on considering points such as the Spiritualist Church having been founded in 1853 and having a significant membership in Britain, ruled that spiritualism was held to qualify as a religion. This decision was upheld by the EAT. [Great Manchester Police Authority v Power 2010 EAT].
3. EFFECTIVE DATE OF TERMINATION : DISMISSAL BY LETTER
When is dismissal effective? In this case, the employer sent a letter of dismissal to the (suspended) employer on 29th November which was delivered to her on the 30th. However, she had gone away and did not return until 3rd December. Even then, she did not actually receive and read it until 4th December when her boyfriend’s son found it in his homework(!). By the time she had been through an internal appeal she did not lodge her claim for unfair dismissal until 2nd March the following year, therefore the dates of 29th and 30th November were out of time (as claims have to be presented within three months of the termination date) but 4th December was within time. The Tribunal, EAT and the Court of Appeal allowed her to proceed with her claim, which decision has now been upheld by the Supreme Court.
The case confirmed the principle about termination, namely:
· The effective date of termination (EDT) is when the employee receives and reads the letter of termination; or
· At least when he or she has had a reasonable opportunity to do so
So what is a “reasonable opportunity”? The Supreme Court said that the test is to be applied subjectively to the claimant, in his or her particular circumstances. It also pointed out that an employer who wants to be certain that his employee is aware of the dismissal should avoid any doubt by telling them face-to-face that he or she has been dismissed. (Gisda Cyf v Barratt)
4. LOCAL AUTHORITY FINED FOR DATA PROTECTION BREACHES
Hertfordshire County Council is one of two bodies recently fined by the Information Commissioner for breaches of the Data Protection Act. The Council’s fine was £100,000. The errors at the Council occurred when employees in the childcare litigation unit accidentally sent two faxes to the wrong recipients on two separate occasions. The faxes contained sensitive material concerning a child sex abuse case. The first misdirected fax was meant for a barrister’s chambers but was sent instead to a member of the public. The second was intended for a county court but was mistakenly sent to a barrister’s chambers unconnected with the case. The other company that was fined, Sheffield-based A4e, was guilty of a breach when an employee took home a work’s computer containing personal information relating to 24,000 people who had used community legal advice centres. It was stolen from the employee’s house and an unsuccessful attempt to access the data was made shortly afterwards. Personal details recorded on the system included full names, dates of birth, income level, information about alleged criminal activity etc. Both bodies reported the breaches to the Information Commissioner’s office as soon as they were discovered. The Commissioner ruled that A4e did not take reasonable steps to avoid the loss of the data but said the incident was “less shocking” than the Council’s security breaches. A4e was fined £60,000. The case emphasises the importance of employers making sure that their data is properly protected.
What’s in the pipeline
1. THE BRIBERY ACT 2010
This is now due to come into force in April 2011. The Bribery Act is considered by many to be one of the strictest pieces of anti-corruption legislation in the world which is intended to aid the prosecution of corruption committed overseas by UK incorporated organisations or those doing business in the UK. It sets out four offences, namely:
· Offering, promising or giving a bribe (defined as a “financial or other advantage”)
· Requesting, agreeing to receive or accepting a bribe
· Bribing a foreign public official
· A new strict liability “corporate” offence that applies where an organisation (being a company or other corporate body including a partnership) fails to prevent bribery by a person “associated” with it
It is this last offence that is expected to have significant implications for employers. The only defence available for an organisation charged with this offence is to show that it had “adequate procedures” in place that were designed to prevent bribery. It is therefore essential that employers are proactive in their efforts and ensure that “adequate procedures” to prevent bribery by those performing services for or on their behalf have been implemented. “Associated” persons is defined as persons who perform services for or on behalf of the organisation in question and who are intending to obtain or retain business or an advantage in the conduct of business for the organisation. It includes (but is not limited to) employees, agents and subsidiaries.
Employers should consider the following:
“Adequate procedures”: the Ministry of Justice is currently consulting on guidance for companies on this, with a view to publishing the final guidance in early 2011. However, this may leave little time to prepare and implement “adequate procedures” before the Bribery Act comes into force. It is therefore suggested that employers should already be reviewing their bribery-related policies and procedures to establish what is in place and then check them against the final guidance.
Procedures that organisations might consider implementing to deal with the risk of bribery:
(a) Whistle-blowing: put effective whistle-blowing policies and procedures in place to allow employees and workers to report wrongdoing and, in return, offer them adequate protection from reprisals.
(b) The express terms of an employee’s contract are one of several factors a Court will take into account when deciding whether or not they had an obligation to report wrongdoing. Therefore, employers should consider including specific reference in employment contracts to an obligation to report bribery and also to the procedure for doing so which should be set out in the organisation’s whistle-blowing policy. An express term requiring employees to report bribery should refer also to reporting their own wrongdoing.
New Hires: it may be appropriate for some organisations during the vetting process to include specific enquiries about whether they have ever been disciplined for or suspected of bribery.
Discipline and dismissals: one way in which organisations could demonstrate their commitment to an anti-bribery culture is by the way in which they discipline employees who are involved in bribery. Employers should consider for example:
· Confirming in employment contracts that employees will not pay bribes
· Citing bribery as an example of gross misconduct in staff handbooks and disciplinary and dismissal policies
· Advising senior management that they should seen to support disciplinary action against employees and others involved in bribery to show that the organisation has a “zero tolerance” approach to bribery
Remuneration and commission: these arrangements may also come under scrutiny in the context of the Bribery Act if, for example, they could be interpreted as incentivising bribery. Organisations should, therefore, review their remuneration and commission arrangements to minimise the risk of such an interpretation e.g. by cross-referring to anti-bribery policies and procedures.
This is a complex subject and employers are advised to obtain specific advice on it.
The Employer Traps and Other Tips
1. EQUAL OPPORTUNITIES POLICY
Since the Equality Act 2010 came into force at the beginning of October, it is prudent to review your equal opportunities policies and other policies that deal with discrimination to reflect the new “protected characteristics” that the Equality Act brings into being.
2. DISMISSAL OF AN EMPLOYEE
As seen earlier in this Update, if you are dismissing an employee, then be absolutely certain that they receive notification of their dismissal. If you are doing things properly then you should be having a hearing in which they are actually dismissed and, therefore, told at the time, following which you should follow it up with a letter confirming the dismissal and telling them about their right to appeal.