Phoenix House Ltd v Stockman UKEAT/0284/17 (No.2)
Bilsbrough v Berry Marketing Services
The case of A Ltd v Z considered whether an employer had constructive knowledge of an employee’s disability.
The company, A Ltd, was in the business of bringing together key contractors and trade associations in the construction industry. It employed around 15 permanent employees. The Claimant, Z, was employed as a part-time finance co-ordinator between 15 February 2016 and 8 April 2017.
Z suffered mental and psychiatric impairments, including stress, depression, low mood and schizophrenia. However, Z never disclosed these impairments to A Ltd.
Prior to commencing employment with A Ltd, Z attributed a 30.5 days period of absence with her previous employer to knee surgery, back and neck injuries relating to a car accident and minor physical disorders. Shortly after Z’s employment commenced, a form was completed whereby Z confirmed she had neither a physical or mental impairment that could have a substantial and long-term adverse effect on her ability to carry out normal day-to-day activities.
During her employment with A Ltd, Z had 85 days of unscheduled absence, of which 52 were recorded as sick leave. She attributed the sickness absences to physical ailments and suppressed any mention to mental health conditions.
Z was signed off work in February 2017 for low mood. Z explained she felt depressed and this was due to problems with her son. She was hospitalised in March 2017 for psychiatric care but did not tell A Ltd. She returned to work in April 2017 but, due to her absences and poor time keeping, A Ltd did not feel they could rely on her anymore and she was dismissed.
Z brought a claim for discrimination arising from disability.
The Employment Tribunal accepted A Ltd had not known that Z was suffering from any mental illness or impairment. However, it had known that Z had difficulties in her personal and family circumstances which had caused her distress. However, as A Ltd was in receipt of medical certificates between February and March 2017 showing a deterioration in Z’s mental health, A Ltd should have enquired into Z’s health. As such, the tribunal held A Ltd had constructive knowledge of Z’s disability.
The matter was appealed to the Employment Appeal Tribunal which held that A Ltd could not reasonably have known of Z’s disability. Had A Ltd tried to obtain further information about her mental state then Z would have suppressed this, would have insisted she was able to work normally and would not have agreed to an occupational health referral or other medical examination. Therefore, even if A Ltd could reasonably have been expected to do more to find out about Z’s health, it could not reasonably have been expected to know of Z’s disability. As such, the claim for disability discrimination was dismissed.
In Phoenix House Ltd v Stockman UKEAT/0284/17 (No.2), the EAT considered whether a claimant’s compensation should have been reduced on account of the fact that the claimant had covertly recorded a meeting with HR.
Mrs Stockman was employed as a financial accountant for Phoenix House. Following a restructure, in which her post was removed, she applied for a number of internal positions and successfully obtained one at a more junior level. She complained of unfair treatment during a restructuring process and, while talking to HR, she covertly recorded the meeting. This fact was only disclosed during her successful unfair dismissal claim. When considering the covert recording, the tribunal held that Mrs Stockman did not make it for entrapment purposes, but only because she felt flustered at the time, and reduced the compensatory award by 10% to reflect her conduct. Phoenix House appealed against the award of compensation, arguing that it should have been further reduced to reflect Mrs Stockman’s pre-dismissal conduct in making the recording, as to have done so was misconduct.
The appeal was dismissed, the EAT finding that the tribunal had correctly approached the matter of reducing her award.
The interest in this decision lies not in the outcome as such, but rather in what the EAT had to say about the covert recording issue. Phoenix House argued that Mrs Stockman’s conduct in making the covert recording meant she had breached the implied term of trust and confidence, i.e. conduct which so undermines trust and confidence that the employer (or here, the employee) should no longer be required to keep the employee in employment (or the employee should no longer consider herself bound by his or her contract of employment).
The EAT recognised the ease with which meetings can now be covertly recorded and that, in its collective experience, it is not uncommon to find an employee has recorded a meeting without saying so. Such recordings are not necessarily undertaken to entrap or gain a dishonest advantage said the EAT. A recording may have been done to keep a record or protect the employee from any risk of being misrepresented when faced with an accusation or an investigation, or to enable the employee to obtain advice from a union or elsewhere.
While the EAT has confirmed that it will generally amount to misconduct for an employee not to inform the employer that a recording is being made, it will not necessarily amount to gross misconduct. A tribunal is not bound to find that such a covert recording necessarily undermines trust and confidence – it depends very much on the facts of the situation. However, 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’.
The factors to be considered when assessing whether a covert recording breaches the trust and confidence term include:
- the purpose of the recording: is this a manipulative employee trying to entrap the employer or a confused and vulnerable employee who wants to keep a record and guard against misrepresentation?
- the blameworthiness of the employee: is this an employee who’s been specifically told that a recording must not be made and then lied about it, or an inexperienced or distressed employee who has scarcely thought about what he or she is doing?
- what has been recorded: is it a meeting where a record would normally be kept and shared, or one where highly confidential or personal information relating to the employer or another employee is discussed?
In this case, the tribunal had found that Mrs Stockman had not recorded the meeting to entrap her employer, there was no confidential information involved and other people were not discussed. There had been no breach of the implied term of trust and confidence and its approach to reducing her award on this basis was sound.
In Bilsbrough v Berry Marketing Services, a tribunal has found that an employee who researched ‘how to blow the whistle’ can rely on the same legal protections as actual whistleblowers.
Client service executive, James Bilsbrough, claimed he was subjected to a detriment and unfair dismissal after he discovered an alleged data security breach at the company he worked for, Berry Marketing Services.
Mr Bilsbrough came across an alleged data security breach and promptly reported it to a technical director rather than his line manager who was not on site at the time. Bilsbrough was reprimanded by his line manager for not approaching her directly and telling him to “engage his brain next time”. The company’s whistlebowing policy stated that issues should be raised with line managers unless they were believed to be involved in the wrongdoing. In these circumstances, a director should be informed.
Angered by this, Bilsbrough told another colleague that he would ‘take the company down’ with the information he had. He then used Google to research data protection principles and how to make a disclosure to the Information Commissioner. Bilsbrough found another job, resigned and then withdrew his resignation which was accepted by his line manager. However, his line manager heard about his threat to take the company down, suspended and later dismissed him following a disciplinary meeting.
The tribunal found that Bilsbrough was suspended for considering how to blow the whistle and that this was not justified.
The judgment said: ‘In a case such as this, if an employee does not know how to make a disclosure to a regulator, he or she will have no option but to research how to do so.’ It added: ‘If an employee is behaving responsibly in preparing to make a disclosure…then the dismissal of such a person or subjecting them to a detriment because of that research would be an interference with that employee’s right to freedom of expression.’
The tribunal did not find that Bilsbrough was unfairly dismissed, however. It stated that he was dismissed ‘because he had threatened to take the company down’ and ‘that threat was separate to researching how to make a disclosure.’
This case does not set a precedent for other similar cases. However, it potentially closes a loophole which meant that a whistleblower only had protection against detriment/dismissal once they had made a public interest disclosure. This extension of protection will hopefully mean more people feel able to highlight wrongdoing in the workplace without fear of sanction from an employer.
