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Employment E-Bulletin - July 2013

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Changes to the Whistleblowing Regime in force

The whistleblowing regime in the Public Interest Disclosure Act (“PIDA”) has long protected workers and employees who suffer a detriment or are dismissed for raising concerns about alleged wrongdoing by their employers or others. That protection has expanded since changes came into force on 25th June 2013.

PIDA relates to disclosures that tend to show that one of the following has occurred, is occurring or is likely to occur:

  • A criminal offence;
  • Breach of any legal obligation;
  • Miscarriage of justice;
  • Danger to the health and safety of any individual;
  • Damage to the environment; or
  • The deliberate concealing of information about any of the above.

Previously, a disclosure of wrongdoing had to be made “in good faith” for a worker to have protection under PIDA. Now, the requirement of good faith has been removed and the protections apply whenever a worker makes a disclosure of information in one of the above categories which “in their reasonable belief” is made in the public interest.

This means that a worker need not disclose allegations in good faith to gain protection from suffering a detriment or being dismissed as a result. The disclosure need not actually be in the public interest as long as the worker “reasonably believes” that it is. The result of this change could be that workers are more likely than before to succeed in a whistleblowing claim. On the upside for employers, if a disclosure is not made in good faith, this should reduce by up to 25% the amount of any award made by the Employment Tribunal. But that reduction would only take effect after the claimant’s claim had already succeeded, rather than enabling the employer to avoid a finding of unfair dismissal.

As such, a claimant could still win even where the disclosure was made in bad faith, with an ulterior motive. It will all now turn on whether the worker believed that the disclosure was “in the public interest” and what “public interest” means in this context.

Employers should consider updating their whistleblowing policies and procedures in light of the new regime.

New Employment Tribunal Rules from 29th July 2013

Major change is coming to the Employment Tribunals. After 9 years of the current regime fundamental change is coming into force in relation to claims that are filed on or after 29th July 2013.

The new Employment Tribunal rules (“Rules”) are much briefer and drafted in “plain English” in the hope of simplifying proceedings and engendering a more flexible approach. However, that very flexibility also means that we have little clarity over how certain matters will be dealt with by the Employment Tribunals. As such, it will be necessary to seek to anticipate a number of possible results or eventualities.

For example, claims will now be subject to a paper sift by the Employment Tribunal to try to weed out those without merit at an early stage. As a consequence, when responding to a claim, employers will be best advised to anticipate the sift process and raise arguments on which the claim could be struck out at that stage. Back-tracking from there, employers are perhaps more likely to find that claimants anticipate such a strategy and that claims become more complicated and include pre-emptive arguments as to why they should not be struck out at the sift stage.

As such, the apparent simplification of the Rules could actually lead to increased complexity and length of the initial ET1 Claim and ET3 Response documents. The importance of properly and fully prepared Responses cannot be underestimated in this new regime.

This leads us neatly on to the issue of costs. The new Rules also introduce fees for the time in Employment Tribunals. Fees will be payable by claimants upon issue of their claim, and again before a final hearing can take place. Fees will also be payable for applications made by either party along the way.

Accordingly, claimants will not be able to commence proceedings without paying the fee. The level of the fee will depend upon the type of claim brought. For simpler claims it will be £160 and for more complicated claims, including notably unfair dismissal, £250. The Hearing fee will be either £230 or £950 depending on the type of case. If a claimant is on Job Seekers Allowance or their monthly income is below a given amount, they will be able to avoid liability for the fees. However, assuming the claimant does have to pay the fee, this is likely to apply their mind somewhat as to the merits of their claim. The aim is to avoid “have a go” claims being submitted in the first place.

From the employer’s perspective, it is likely that the Employment Tribunals will award the fees as well as compensation if the claimant eventually succeeds. You can also expect claimants to seek the fee on top of any settlement sum discussed, or to have to negotiate hard on this point.

Given the median award for unfair dismissal claims of £4,560 (2011/2012), some claimants may view the issue and hearing fees as a gamble that is not worth taking. At the same time, employers may view the likelihood of an additional sting in respect of the fees as a good reason to seek early settlement.

This is merely a small snapshot of the rule changes coming in on 29th July. The likelihood of satellite litigation around the procedural and “extraneous” issues is high.

Coupled with the prohibition on pre-termination negotiations being disclosed in unfair dismissal cases, and the renaming of compromise agreements as “settlement agreements” (both in force from 29th July as well), a wholesale reconsideration of strategy is necessary from the moment you consider taking action towards dismissal.

Covert Surveillance can be acceptable

In a recent case, the Employment Appeal Tribunal held that in certain circumstances covert surveillance can be admissible to support an employer’s decision to dismiss an employee. In City & County of Swansea –v- Gayle, the Employment Tribunal had found that Mr Gayle was unfairly dismissed after his employer covertly filmed him at a sports centre when he was supposed to be at work. The EAT overturned that decision and found that Mr Gayle had been fairly dismissed. It was relevant that the surveillance was carried out in a public place. It was also made clear that a fraudster should not expect privacy.

A note of caution though: this decision does not give carte-blanche to carry out covert surveillance in every disciplinary investigation. It will not always be reasonable to do so. The main point in this case seems to have been that where an employee is being paid to work, they can have no reasonable expectation of being able to keep private from their employer what they are actually up to at the time.

On a related note, the ease of recording meetings using smart phones seems to be increasing the regularity with which this happens. It is perhaps worth checking with the employee who places their smart phone on the table during a disciplinary hearing whether they are in fact recording it. Full notes should obviously be taken, but you are entitled to know if the employee wishes to record the meeting itself. If you do not wish the employee to make a recording, emphasise that you are taking full notes and that that should be sufficient for a record. You can also reassure the employee that they will be given a chance to read through the notes and make any amendments or objections to the content if they wish.

Illegal working: consultation on tougher sanctions

Employers have since 1997 been required to check that all new employees have the right to work in the UK, by obtaining copies of certain ID documents before the employees starts work.

For British employees, the usual requirement is for a copy of their British Passport. A number of other documents are acceptable depending on the employee’s circumstances. For non-EEA nationals, an immigration status that permits them to work in the UK will be required, such as entry clearance with a Certificate of Sponsorship issued by a licensed sponsor under the immigration Points Based System.

A consultation is running until 20th August 2013 on a number of proposed changes to the administrative procedures employers have to follow in order to comply, including:

  • fewer types of acceptable documents, removing older/more easily forged documents, ultimately using biometric residence permits for non-EEA nationals; and
  • replacing the current annual follow up checks for non-EEA nationals with checks at the end of leave to remain in the UK.

It is also proposed to introduce a tougher civil penalty scheme to enforce the rules, including:

  • increasing the maximum penalty to £20,000 per illegal worker (from £10,000);
  • introducing measures to recover penalties from company directors or partners of LLPs if the employer business itself fails to pay; and
  • simplifying the calculation of penalties and how they are enforced through the Courts.

For details of the current regime, please see our Illegal Working Fact Card.

We shall update you on the new requirements once they are finalised. The changes are expected to be implemented in early 2014.

If you require any advice or assistance with any matters of this nature do feel free to contact one of the team.

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