Employment Law Review – November 2019
Welcome to our November Employment Law Update.
In this month’s bulletin, we outline some important cases regarding harassment, legal advice privilege and conducting disciplinary investigations. We also discuss the recent publication of the Government’s response to the consultation on non-disclosure agreements.
- Does unwanted massaging of the shoulders, neck and back amount to sexual harassment under discrimination law?
- Is an employer liable for third-party racial harassment against its employees?
- Legal advice privilege: is an overhead conversation about legal advice protected?
- Should an investigator in a disciplinary process provide their opinion on whether the allegations against the accused employee are well-founded?
- The use of non-disclosure agreements in discrimination cases: Government publishes its response.
Does unwanted massaging of the shoulders, neck and back amount to sexual harassment under discrimination law?
This question arose in the case of Raj v Capita Business Services Ltd & Another and the answer is no – not necessarily.
Mr Raj (the Claimant) was an employee of Capita Business Services Ltd (“CBS”) and was dismissed under a probation process following a number of meetings in which his performance was discussed. Following his dismissal, Mr Raj made various claims in the Employment Tribunal (“ET”), one of his claims being that his Team Leader, Ms Ward, sexually harassed him by massaging his shoulders, neck and back in their open plan office. Mr Raj brought this claim against CBS and Ms Ward.
Section 26 of the Equality Act 2010 (“the Act”) provides that a person (“A”) harasses another (“B”) if A engages in unwanted conduct of a sexual nature or related to B’s sex, and that conduct has the purpose or effect of violating B’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for B. In deciding whether the conduct has this effect, the ET must take into account the perception of B, the other circumstances of the case and whether it is reasonable for the conduct to have that effect.
In this case, the ET decided that Ms Ward’s conduct was unwanted and that it had the effect of creating an intimidating, hostile, degrading, humiliating or offensive environment for Mr Raj. However, the conduct was found not to be of a sexual nature or related to Mr Raj’s sex, and the claim therefore failed.
In reaching its decision, the ET pointed out that the massaging took place on a ‘gender neutral’ part of the body and, although the conduct was ‘unwise and uncomfortable’, the essential criteria set out in Section 26 of the Act was not met. The fact that Mr Raj had complained of back pain was also considered. The decision here was that the conduct amounted to ‘misguided encouragement’, which did not go far enough to amount to sexual harassment, despite the conduct taking place on a few occasions.
It should be noted that the ET was not saying that every situation involving massaging of the shoulders, neck and back will fall short of the sexual harassment criteria – each case must be decided taking its full circumstances into account.
Mr Raj appealed the decision in the Employment Appeal Tribunal (“EAT”) but his appeal was dismissed.
This decision must be treated with caution. Whilst the conduct did not amount to discrimination in the form of sexual harassment in this case, it may in slightly different circumstances lead to a different result. The crucial point to take away is that the tribunals will look very carefully at each essential ingredient in sexual harassment cases before arriving at a conclusion. Although Mr Raj lost this case, the claim would not have been added to proceedings had the conduct not occurred. Therefore, to avoid this kind of dispute, our advice to employers is to have clear sexual harassment policies in place that spell out what is and is not regarded as acceptable conduct within the workplace.
Is an employer liable for third-party racial harassment against its employees?
Not where the employer’s conduct or inaction is unrelated to the Claimant’s race, held the EAT in Bessong v Pennine Care NHS Foundation Trust.
Mr Bessong (the Claimant) was a mental health nurse who was seriously assaulted and racially abused by a patient. Following the assault, the Trust made an incident report but the report made no mention of the racial element of the assault.
Mr Bessong subsequently brought claims of direct and indirect race discrimination and racial harassment.
The ET held that the Trust had failed to take adequate steps to ensure that all staff reported each and every incident of racial abuse by patients on an incident reporting form. A perception had therefore formed among many black staff that reporting every single racist incident was ‘pointless’.
In view of this finding, the ET upheld Mr Bessong’s indirect discrimination claim in respect of the Trust’s failure to have a system for comprehensively reporting incidents of racial abuse. However, the direct discrimination and harassment claims were dismissed.
In terms of the Mr Bessong’s harassment claim, for the purposes of section 26(1)(a) of the Equality Act 2010 (“the Act”), the ET needed to be satisfied that the Trust engaged in unwanted conduct related to Mr Bessong’s race. The ET found that the Trust’s failure to create a culture in which all racist incidents were formally reported contributed to an environment in which racial abuse from patients was more likely to occur and this amounted to unwanted conduct.
However, the ET was not satisfied that the Trust’s unwanted conduct “related to” Mr Bessong’s race, which is a requirement for harassment under the Act. In forming this conclusion, the ET considered the case of Unite v Nailard, in which the Court of Appeal held that an employer will only be liable under section 26 of the Act where the employee can show that the protected characteristic (e.g. race) was the “ground of” (or reason for) the employer’s failure to protect them against the harassment by the third party. This would not be established by showing that the employer had failed to protect them from unlawful discrimination; rather, the focus was on the grounds for the employer’s action, not the third party’s harassment.
Mr Bessong appealed to the EAT and the appeal was dismissed. His appeal was based on an argument that Article 2(3) of the Race Directive (2000/43/EC) requires Member States to outlaw third-party harassment where the harassment was foreseeable and preventable, without a requirement that the employer’s failures were themselves ‘related to’ race.
The EAT dismissed the appeal and held that if the intention had been to impose strict liability on employers then it would be expected that some explicit reference to such an aim would have been included within the Directive.
A Government consultation ran between 11 July to 2 October 2019 on whether new third-party harassment provisions should be introduced and if so, when should an employer be liable.
The removal of the third-party harassment provisions in 2013 was controversial at the time and the recent consultation, coupled with the high profile #MeToo movement, may mean that this is an area where we see future legislative development.
Legal advice privilege: is an overhead conversation about legal advice protected?
Whilst in the recent case of Curless v Shell International Limited the answer to this question was “yes”, the case also demonstrates the importance of not discussing confidential information in public.
Legal advice privilege is important for both solicitors and clients to ensure communications that have come into existence for the purpose of giving or receiving legal advice are kept confidential. In Curless v Shell International Limited the Court of Appeal considered whether a conversation that was overheard in the Old Bank of England public house about legal advice (which concerned making an employee who was complaining of discrimination redundant) could be relied on by the Claimant.
Mr Curless (the Claimant) was Shell’s former senior legal Counsel. He was employed by Shell from 1990. He suffered from type 2 diabetes and breathing problems. From 2011 there were ongoing performance concerns about Mr Curless’ work. Mr Curless lodged a claim against Shell in the ET and raised an internal grievance complaining of disability discrimination.
In February 2016 Shell commenced a group-wide redundancy programme. Mr Curless’ employment was subsequently terminated by reason of redundancy in January 2017. Mr Curless lodged a second ET claim in March 2017 alleging further disability discrimination, victimisation and unfair dismissal. Mr Curless alleged that Shell relied on the re-organisation as a pretext to terminate his employment by reason of redundancy.
In two paragraphs of the claim form Mr Curless referred to:
- A conversation that he overheard in the Old Bank of England pub on Fleet St between two people, who he believed to have been lawyers from London law firm Lewis Silkin. In this conversation the lawyers mentioned a senior lawyer at Shell who had started an ET claim and had said this individual’s “days are numbered” because his claim would be handled firmly and the respondent planned to use a redundancy exercise to terminate his employment; and
- An email marked “Legally Privileged and Confidential” that he became aware of (from an anonymous source) between Shell’s senior lawyers to confirm the company could use the planned re-organisation of the legal department to terminate Mr Curless’ employment. Mr Curless alleged that this indicated the redundancy process was a ‘sham’.
Mr Curless contended that: (i) the above did not attract privilege, and that (ii) privilege does not apply where there is ‘iniquity’, i.e. the communications are a sham or dishonest, which Shell disputed as being the case.
The Court of Appeal held privilege did apply in these circumstances. The Court of Appeal considered that the email advice was between lawyers and was the type of advice given, “day in, day out” in cases where an employer wishes to consider for redundancy an employee who is regarded by the employer as underperforming. The advice had not been given in an “underhand or iniquitous way”. Further, the conversation in the Old Bank of England public house could not be relied on to aid the interpretation of the disputed email. There was no evidence that the lawyers having the conversation had seen the disputed email.
Despite the outcome of this case, we would not advise discussing confidential information of this nature in public under any circumstances as it always carries a degree of risk and will not always attract privilege as it did here.
This case also serves as a reminder to:
- Ensure emails are marked confidential and or privileged as appropriate;
- Think about the content of your emails and who might see them;
- Think about who needs to see the email – the wider the distribution the less control you have over the information contained in it.
Should an investigator in a disciplinary process provide their opinion on whether the allegations against the accused employee are well-founded?
No, held the EAT in Dronsfield v The University of Reading.
The case of Dronsfield v The University of Reading is particularly interesting as it provides a clear reminder to a common issue that employers face when dealing with a disciplinary process, and the importance of distinguishing between the roles of the Investigator and the Disciplining Officer.
Dr Dronsfield (the Claimant) was employed by the University of Reading as a professor. He admitted to having a sexual relationship with one of his students. The University’s policies stated that employees could be dismissed for gross misconduct if their conduct was of an “immoral, scandalous or disgraceful nature incompatible with the duties of the office or employment”.
Two investigators were appointed to conduct an investigation into the allegations, one of who concluded in a draft of the investigation report that, amongst other things, there was no evidence that the employee’s conduct had been immoral, scandalous or disgraceful. These comments were subsequently removed from the final version of the report following legal advice received by the University.
Dr Dronsfield was disciplined and dismissed for gross misconduct. He subsequently brought a claim for unfair dismissal, claiming that his dismissal was unfair on the basis that material comments by the investigators were left out of the final version of the investigation report.
The ET found that Dr Dronsfield’s dismissal was not unfair. Hearing Dr Dronsfield’s appeal, the EAT agreed with this decision.
The EAT highlighted that investigation reports should not set out evaluative conclusions on whether the allegations against the employee are well-founded or not, as that determination should only be made by the disciplining officer. Therefore, the removal from the final report of the comments by the investigator on their opinion of whether the employee was guilty was not unreasonable and/or unfair. Further, there was no suggestion that any evidential material had been withheld from the investigation report and therefore not put before the disciplinary panel.
We know from the ACAS Code of Practice on Disciplinary and Grievance Procedures and various other guidelines that, where there is an allegation of misconduct or poor performance against an employee, a reasonable investigation must be conducted before the matter proceeds to a disciplinary hearing.
So what should an investigator be doing as part of the investigation process?
The ACAS guidelines state that the role of an investigator is:
“to be fair and objective so that they can establish the essential facts of the matter and reach a conclusion on what did or did not happen. An investigator should do this by looking for evidence that supports the allegation and evidence that contradicts it. In potential disciplinary matters, it is not an investigator’s role to prove the guilt of any party but to investigate if there is a case to answer.”
However, we often see that the role of the investigator becomes blurred with that of the disciplining officer, and the investigator can ‘overstep’ the boundaries of their role by not only ‘fact-finding’ to establish a prima facie case, but also making determinations on the allegations at hand. Therefore, it would be prudent for employers to assist their investigators by clearly explaining to them their role and remit; they should ask them to make findings of fact only, on which they should base their recommendations as to whether to proceed to a disciplinary hearing (rather than giving any evaluative opinions on the ultimate decision to be made by the disciplining officer).
The use of non-disclosure agreements in discrimination cases: Government publishes its response.
Government agrees that the use of confidentiality clauses to silence victims of discrimination is unacceptable but argues that they still have a legitimate place in the employment context.
In June 2019, the Women and Equalities Committee (“WEC”) published its report on the use of non-disclosure agreements in discrimination cases. The full report can be accessed here.
The WEC launched its inquiry amid growing concerns amongst trade unions and other employee groups that serious allegations of sexual harassment and other discriminatory behaviour were being swept under the carpet through the use of settlement payments and confidentiality clauses that prevent employees from speaking out about their alleged experience.
In its report, the WEC proposed various changes to help tackle the misuse of confidentiality clauses in this way. These include:
- Preventing agreements from being made that suppress the legitimate discussion of allegations of discrimination and harassment;
- Requiring employers to investigate discrimination and harassment complaints regardless of whether a settlement has been reached;
- Extending tribunal time limits for certain discrimination claims; and
- Enabling tribunals to award punitive damages and introducing a presumption that the employer will pay the employee’s costs in the event of a successful sexual harassment claim.
The Government’s formal response to the WEC’s report was published on 29th October 2019. The full response can be accessed here.
In its response, the Government agrees that confidentiality clauses “have been used to hide workplace harassment or intimidate victims into silence”. It goes on to state that the use of confidentiality clauses in this way “fails to tackle repeat offenders and perpetuates an unacceptable workplace culture”.
However, whilst the Government’s response is scathing of agreements that aim to silence victims of harassment and discrimination, it also recognises that confidentiality clauses can play a useful role in both employment contracts and settlement agreements. For example, in employment contracts confidentiality clauses can help employers protect their commercially sensitive information, whilst in settlement agreements they allow both sides of a dispute to move on with a clean break.
In response to the WEC’s proposals for change going forward, the Government has pledged to legislate so that confidentiality clauses cannot be used to prevent employees from making any kind of disclosure to the police, regulated health and care or legal professionals. It has also pledged other proposals for reform, some of which include:
- Requiring the wording of confidentiality clauses to be clear and specific;
- Ensuring that when entering into settlement agreements, individuals receive advice not only on the nature of the confidentially requirement but also on the limitations of confidentiality clauses; and
- Looking at whether the law on sexual harassment in the workplace is operating effectively, as part of a focus on preventing sexual harassment and discrimination issues in the first instance.
Confidentiality clauses in settlement agreements can play a vital role, not only from an employer’s risk perspective, but also for the benefit of employees by allowing them to settle their claims and move on with their lives.
Whilst it is important that employers take all claims of harassment and discrimination seriously, if the permitted scope of confidential clauses becomes too limited, this could have the unintended consequence of increasing the number of tribunal claims by making settlement agreements less attractive. Any changes that are brought in as a response to the WEC’s report will therefore need to be weighed up against these sometimes conflicting interests.
In the meantime, it is important that when drafting settlement agreements, confidentiality clauses (and indeed all other clauses) are drafted clearly so that the parties are fully aware of their rights and obligations. Furthermore, settlement agreements should not restrict employees from making a protected disclosure within the meaning of section 43 Employment Rights Act 1996, nor should they seek to prevent employees from reporting of a suspected criminal offence to the police.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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