Frontline UK Employment Law Update Edition 20 2023 - Case Updates

1. FKJ v RVT and others (11 January 2023)

2. Mr G Meaker v Cyxtera Technology UK Ltd (21 February 2023)

3. Benyatov v Credit Suisse (Securities) Europe Limited (17 February 2023)

4. Glover v Lacoste UK Ltd (2 February 2023) 

1. FKJ v RVT and others (11 January 2023)(LINK)

In this case, the English High Court has refused to strike out a misuse of private information (“MPI”) claim issued by an employee against their former employer, after the employer produced 18,000 of the employee’s WhatsApp messages (of which only 20 messages were deemed relevant and therefore disclosable as evidence in Employment Tribunal (“ET”) proceedings).

The Claimant employee was dismissed for misconduct after falsifying timesheets and brought claims before the ET for (principally) sex discrimination, unfair dismissal and wrongful dismissal. The Claimant was unsuccessful in her claims as the Defendant employer could show, using the Claimant’s own WhatsApp messages, a “direct conflict” of evidence undermining her credibility.

Whilst unsuccessful in her ET claim, the Claimant then initiated a MPI claim in relation to the Defendant’s possession of her 18,000 WhatsApp private messages, which covered her time both as an employee and after her dismissal. The Claimant claimed that the Defendant had hacked into her WhatsApp to obtain the messages. The Defendant disputed this, saying that some had been found downloaded onto the Claimant’s company laptop and the remainder had been provided by an “anonymous source”. The Defendant argued that the MPI claim should be struck out as having no reasonable prospect of success.

The High Court refused to do so, indicating that the MPI claim is likely to be successful if it proceeds to a full hearing as the Defendant’ actions were “a very serious breach of her [the employee’s] private information”, especially given the public nature of the ET proceedings.

Pertinently, the Defendant failed to explain how the Claimant “could not have had a reasonable expectation of privacy or confidence in relation to material saved or downloaded to her work laptop” especially where the messages were apparently “intercepted by the writer of the anonymous letters…” [11]. The Defendant also failed to provide an explanation or authority “for the proposition that private information downloaded to a work laptop (a very common scenario) thereby loses its private character.” [11]. The Court further questioned the justification for the retention of all the messages when only “some 40 or so of the messages…were in fact deployed in the Employment Tribunal claim and only about half of those 40 were strictly probative of an issue (and therefore disclosable)” [11].

Whilst the English civil courts and Employment Tribunals tend to admit relevant evidence even where there is a question over whether it has been lawfully obtained, this case serves as a helpful reminder that there may yet be legal consequences for parties who seek to rely on evidence obtained unlawfully. The Court drew a clear distinction between company information and private information (regardless of whether the information is shared on a work laptop during working hours), and stated that if the information is clearly private an employer owes a duty to return the private information to the employee. Employers should therefore be wary of relying upon an employee’s private information in a dispute even if it disproves allegations being made by the employee, and carefully weigh up the risks of doing so before proceeding.

2. Mr G Meaker v Cyxtera Technology UK Ltd (21 February 2023) (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) upheld an Employment Tribunal (“ET”) decision that the Claimant’s effective date of termination (the “EDT”) was the date set out in a “without prejudice” letter confirming agreement of a “mutual” termination, despite the Claimant rejecting the settlement proposal in the letter. Whether a document or communication amounts to a dismissal is a matter for objective determination by the ET within the context of the circumstances known the parties at the time, but at a minimum it must be clear and unambiguous. Furthermore, even if a letter is marked as ‘without prejudice’, the ET can separate out the letter into “open” sections – such as the parts dealing with the EDT – and “without prejudice” sections – dealing with settlement (although this is not encouraged).

The Claimant could no longer work in his role due to injuries which were likely to be permanent. Settlement conversations occurred between him and the Respondent and on 5 February 2020 he received a “without prejudice” letter stating it had been agreed there would be mutual termination of employment, and that his employment would terminate on 7 February 2020. The letter contained details of a settlement agreement which the Claimant rejected. On 14 February 2020, the Claimant received payments in lieu of notice and for untaken holiday. He then brought an unfair dismissal claim. The Respondent argued, as a preliminary issue, that his claim was out of time as it had not been brought within three months from the EDT (allowing for ACAS early conciliation period). The Respondent argued that the EDT was 7 February 2020; the Claimant argued that the letter of 5 February 2020 was not a termination letter, and that even it was, it was a breach of contract which he had not accepted. He argued that there was no termination until 14 February 202o, when the payment in lieu of notice was made to him and this meant that his claim was brought in time.

The ET and EAT confirmed that, in a case of a summary dismissal, the EDT is the date of the dismissal, even if there is a breach of contract. There is case law confirming that a dismissal in repudiatory breach of contract does not automatically bring the contract to an end, and that the innocent party can either accept the breach (thereby bringing the contract to an end) or affirm the contract (in which case the dismissal is not effective). However, that case law was concerned with the common law position. The EDT, used to determine whether an employee has the right to bring an unfair dismissal claim, and whether such a claim has been brought in time, is a statutory construct. The relevant case law on the statutory position confirms that in a case of summary dismissal in breach of contract, the EDT is the date of the summary dismissal rather than any later date on which the employee chooses to accept the breach.

The EAT also concluded that the ET had been entitled to find that the “without prejudice” heading on the letter did not impact the effectiveness of the letter as a dismissal notice. The letter was an effective termination letter since it was sufficiently clear and unambiguous. This was despite it being labelled “without prejudice” because the letter could be separated into separate sections. Whilst it is preferable for “without prejudice” and open communications to be entirely separate, it is possible for a communication to contain both open and “without prejudice” content. As such, the claim was out of time and could not proceed.

This case provides a useful reminder that for statutory purposes, the EDT may not be the same as the date on which the employment contract comes to an end, in cases of summary dismissal in breach of contract. To avoid disputes of the kind that arose in this case, employers should always ensure that notices of termination of employment are clear and unambiguous, clearly stating the EDT, and any communications relating to the potential settlement of disputes arising from termination should be separated into a “without prejudice” letter.

3. Benyatov v Credit Suisse (Securities) Europe Limited (17 February 2023) (LINK)

The Court of Appeal (“CA”) has dismissed an appeal from a former employee of Credit Suisse who sought to recover £66m in loss of earnings following work he carried out in Romania for the bank which resulted in a criminal conviction. The employer did not have an implied contractual duty to indemnify the Claimant employee against loss of earnings arising from the performance of his duties, nor any duty of care to not expose him to the risks of criminal conviction, in the circumstances of the case.

During the Claimant’s employment with the Defendant he undertook a project in Romania. Romania was not a “high risk” country and the project was not high risk. However, he was arrested and ultimately convicted of criminal wrongdoing in connection with the project. The Defendant provided significant financial and legal support to the Claimant in connection with the criminal proceedings, including appeals and an application to the European Court of Human Rights, but ultimately the Claimant (having been made redundant by the Defendant for reasons unrelated to the criminal proceedings) was unable to work in the financial services sector as a result of the conviction. He issued High Court proceedings against the Defendant, arguing that the Defendant had breached a duty of care not to expose him to the risk of criminal prosecution in the performance of his duties and a duty to take reasonable care to protect him from the resulting financial losses (the negligence claim). In the alternative, he argued that the Defendant had breached an implied contractual duty to indemnify him against loss of the kind he had suffered (the indemnity claim).

Firstly, in relation to the indemnity claim, the CA held that, the trial judge had been correct to find that there was no implied indemnity of the kind argued for by the Claimant. Whilst it might be necessary to imply an indemnity for losses arising from high risk work, such an indemnity should not extend to cover all losses of any kind suffered by an employee as a result of doing their job, irrespective of any fault on the part of the employer. The Claimant contended that the Defendant should be liable to compensate him for loss of earnings even though the loss had been caused by someone else and the Defendant had no fault, on the basis the “relevant harm was done “in consequence of “them doing their job””. This was rejected by the CA as it would mean an employer would be liable in an “extraordinarily wide range of circumstances.”.

Secondly, in relation to the negligence claim, the CA held that the trial judge had correctly taken the correct approach to deciding whether a duty of care should be recognised in a novel situation. This approach considers the three “Caparo factors”, namely that (i) the loss claimed must have been reasonably foreseeable, (ii) there must be a sufficient proximity between the party alleged to owe the duty of care and the party to whom it is alleged to be owed, and (iii) the situation should be one in which it is fair, just and reasonable for a duty of care to be imposed.

The CA held that on the facts of the case, the Defendant could not have assumed responsibility for a conviction that had not been reasonably foreseeable. The Defendant did not know and could not reasonably have been expected to know that there was a risk to the Claimant of criminal conviction in Romania, and so the loss suffered was not reasonably foreseeable. Accordingly, the Defendant was not liable to compensate him.

The facts of this case were perhaps unusual, and the financial stakes very high, but the CA’s decision helpfully confirms that it will be a rare case in which an employer is liable for financial loss incurred by an employee in connection with the performance of their duties. However, where the work an employee is required to do is high-risk in some way, and this is known to the employer – or the employer ought reasonably to know – it is possible that a term may be implied into the employment contract that the employer will indemnify for financial loss suffered as a result of the performance of that work.

4. Glover v Lacoste UK Ltd (2 February 2023) (LINK)

In this indirect sex discrimination case, the Employment Appeal Tribunal (“EAT”) held that the Respondent employer’s requirement for fully flexible shift working was a provision, criterion or practice (“PCP”) that applied to the Claimant employee even though she did not return to work under the relevant arrangement and even though the requirement was ultimately reversed.
The Claimant worked at one of the Respondent’s stores five days a week based on a rota provided every four weeks. She went on maternity leave in March 2020, and prior to returning made a flexible working request to work three days per week. The Respondent denied the request both initially and on appeal, but on appeal offered an alternative – of working four days a week on a fully flexible basis (i.e., any day of the week) (the “offer”). No further right of appeal was offered. The Claimant was not required to work during this time because the store remained closed due to covid and she was on furlough.

The Claimant asked for the original request to be reconsidered, as the requirement to work any day of the week would not be possible taking into account her childcare commitments. The Claimant stated that if the Respondent did not agree, she would need to consider resigning and claiming constructive dismissal. In response, the Respondent agreed to the Claimant’s original request. Notwithstanding this the Claimant then presented a claim for indirect sex discrimination, arguing that the Respondent’s previous requirement of fully flexible shift work was a PCP which put female employees at a disadvantage when compared to male employees, due to an inability to arrange adequate childcare (on the basis that women still have the primary responsibility for childcare), that she had been placed at that disadvantage, and this PCP could not be justified as a proportionate means of achieving a legitimate aim.

The EAT held that upon its final determination of the flexible working request, the Respondent had applied the PCP in question. This was the case even though the Claimant had never worked under that arrangement, and even though the Respondent later changed it mind. As a result, the Respondent’s “U-turn” was too late to avoid a potential claim. The EAT also held that the Claimant had clearly suffered a disadvantage as a result of the PCP. Despite not working under the offending arrangement, her flexible working request had been rejected twice and she had been left with no option but to consider resigning.

This case illustrates the need for employers to ensure that they carefully consider all flexible working requests and ensure that the decisions they make are robust and free from discrimination. Changing the decision at some later date does not extinguish the risk of a potential discrimination claim arising.