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                                                                                   March 2011

1.          Harassment: Effect on Employee

The Employment Appeal Tribunal in Thomas Sanderson Blinds Ltd v English considered what test the
Tribunals should apply when determining what constitutes harassment by reference to the effect the
alleged harassment had on the complainant.

The Facts

The Claimant, Mr English, brought a claim against his employer, claiming he had been subjected to
harassment because of his colleague's homophobic banter which was aimed at him. Despite Mr English
not being homosexual, his colleagues teased him and called him a “faggot” because he had attended
boarding school and lived in Brighton.

Regular readers of our Notepad may recognise the facts of this case, and indeed, we did report the Court
of Appeal's earlier decision on a different aspect of the case in our January 2009 Notepad. The issue being
determined by the Court of Appeal, at that stage, was whether someone who was not gay could still be a
victim of harassment on grounds of sexual orientation. The Court of Appeal ruled that a person need not
actually be homosexual in order to be protected against homophobic abuse.

The Law

The Employment Equality (Sexual Orientation) Regulations define harassment as “unwanted conduct on
grounds of sexual orientation which has the purpose or effect of violating a person’s dignity or creating an
intimidating, hostile, degrading, humiliating or offensive environment for them.”

The Tribunal

Whilst the Tribunal agreed Mr English had been subjected to “distasteful, demeaning and degrading
expression”, he himself had written articles and made comments which were equally distasteful and which
were “riddled with sexist and ageist innuendo.” Mr English remained on friendly terms with his colleagues
throughout the making of such comments.

The Tribunal was not, therefore, prepared to accept that the comments had the “effect” of creating an
intimidating, hostile, degrading, humiliating or offensive environment for Mr English.
Mr English appealed.

The Employment Appeal Tribunal

The Employment Appeal Tribunal agreed with the Tribunal’s decision and that it was correct to take into
the consideration the context of the environment in which an employee works when considering what the
actual effect certain conduct had on the employee in question.

It is difficult to see why employees who work in offensive environments and continually experience
behaviour which could constitute harassment might not be afforded as much protection as employees
who do not work in such environments. However, it is important to note the Tribunal also took into
account Mr English’s own conduct and it is likely that, in light of his own evidence at the Tribunal and
taking into account his own conduct, he failed to convince the Tribunal he had suffered as a result of the
homophobic banter.




Laytons – Employment Notepad March 2011                                                                   1
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2.          Team Moves: Constructive Dismissal and Forward Contracts

The Court of Appeal recently handed down its decision in the high-profile case of Tullett Prebon plc and
others v BGC Brokers LP and others.

Tullett Prebon and BGC are both large inter-dealers brokers. BGC attempted to recruit desks of dealers
from its rival Tullett by offering the brokers “forward contracts” with large sign-on bonuses and which
included an obligation for the brokers to join BGC as soon as they were free to do so i.e. when their
contracts with Tullett had expired, or they had been dismissed or constructively dismissed.

BGC was able to persuade 13 brokers to enter into forward contracts and then simply waited for these
brokers to be free to join it.

Upon finding out that BGC were essentially raiding Tullett for brokers by appointing “recruiting sergeants”
whose role it was to recruit more junior members of the team, Tullett sought to change its brokers' minds
and encourage them to stay. By doing so, Tullett was effectively asking its brokers to breach the terms of
the forward contracts which they had entered into with BGC.

In March 2009, the brokers in question resigned and claimed they have been constructively dismissed on
the basis that Tullett's actions breached the mutual trust and confidence.

Tullett applied to the High Court for an injunction preventing its brokers from leaving and joining BGC.

The High Court agreed with Tullet’s claims of a conspiracy, breach of contract and inducing the breach of
contract on BGC’s part. The High Court enforced the brokers' garden leave and restrictive covenants and
prohibited BGC from recruiting any of Tullett’s employees for a period of 1 year. The High Court
dismissed the claims that the employees had been constructively dismissed and that Tullett had induced
brokers to breach their forward contracts.

BGC appealed against the High Court's decision. It appealed on numerous grounds, only a few of which
were permitted. In particular, the Court of Appeal considered what the proper test was for determining
whether there had been a repudiatory breach which could be relied upon for the purpose of constructive
unfair dismissal and BGC’s counterclaim that Tullett had induced the brokers into breaching their forward
contracts.

Constructive Dismissal

The Court of Appeal held that in order to determine whether there had been a repudiatory breach of
contract by an employer, the courts should consider what, when taking an objective view, the alleged
contract breaker's intention was.

The Court of Appeal decided that Tullett’s actions, upon finding out it was the victim of a recruitment raid,
had (objectively) intended to strengthen its relationship with its brokers by letting them know how keen
they were for them to stay.

Inducing Breach of Forward Contracts

The Court of Appeal held that, whilst the forward contracts did contain a mutual obligation of trust and
confidence, the manner in which BGC had recruited the brokers negated that mutual obligation unless the
brokers had commenced working for BGC.




Laytons – Employment Notepad March 2011                                                                    2
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Implications for Employers

The decision seems to demonstrate that courts are, in situations of unlawful poaching and far-fetched
claims of constructive unfair dismissal, willing to grant appropriate injunctive relief.

3. Anti-Fox Hunting: The Latest Religion?

The Employment Equality (Religion or Belief) Regulations protect individuals from being discriminated
against on grounds of religion or philosophical belief.

The courts have often had to consider what constitutes a philosophical belief. The presently agreed
approach is that a philosophical belief must have “sufficient cogency, seriousness, cohesion and
importance and be worthy of respect in a democratic society".

In our November 2009 Notepad we confirmed the EAT had upheld the Tribunal’s decision that an
individual’s belief in man-made climate change and the moral duty to prevent catastrophic climate change
(i.e. reduce carbon emissions) was capable of being a philosophical belief for the purposes of the
Employment Equality (Religion or Belief) Regulations 2003 (Grainger plc and others v Nicholson).

Just recently, the Tribunal in Hashman v Milton Park (Dorset) Ltd t/a Orchard Park, has held that a belief
in the sanctity of life, and strong anti-fox hunting and anti-hare coursing views were also capable of being
a philosophical belief. The Tribunal, having reached this decision, will now consider the Claimant’s claims
that he was dismissed and directly discriminated against because of his strong views about fox hunting.


4.          Employee who sent offensive e-mail from home computer was dismissed fairly

In Gosden v Lifeline Project Ltd, the Employment Tribunal held that a prison worker, who was dismissed
because he forwarded a racially offensive email to a colleague from his home computer, had been
dismissed fairly.

The Facts

The Claimant, Mr Gosden, was employed by Lifeline Project Limited (“Lifeline”), a charity which assigns
employees to HM Prison Service “ HMPS ” to work with drug users. Mr Gosden was initially assigned to
work at Moorland Prison. However, in 2007, following a formal warning for his behaviour, Mr Gosden was
re-assigned to work at Lindholme Prison.

In 2008, Mr Gosden forwarded an email, outside his working hours, from his personal computer to the
home computer of one of his former colleagues at Moorland, Mr Yates. The email was entitled “The
British are ahead of us - it is your duty to pass this on!”.

The email contained pictures of nude women and made derogatory comments about Islamic males which
implied they were a terrorist threat.

Mr Yates subsequently forwarded the email to one of his colleagues at Moorland and it therefore entered
the HM Prison computer system.

HMPS conducted its own investigation and concluded the racist and offensive nature of the email was in
breach of its diversity and professional standards policy and he was suspended from his duties.

Mr Gosden’s employer, Lifeline, took the view that his actions constituted gross misconduct, namely
damage to reputation and breach of their equal opportunities policy, and that he should be dismissed
accordingly.

Following his dismissal on 10 April 2009 and subsequent appeal, Mr Gosden brought claims of unfair
dismissal in the Employment Tribunal. In addition, he claimed the procedure followed was unfair.



Laytons – Employment Notepad March 2011                                                                   3
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The Employment Tribunal

The Employment Tribunal held Mr Gosden’s dismissal was fair on the basis that:

     o    The reason for his dismissal was gross misconduct and that dismissing him was within the range
          of reasonable responses available to Lifeline because having such an email forwarded to one of its
          largest clients might damage its reputation;

     o    In terms of procedure, the dismissal was fair because there was no evidence to suggest any
          procedural unfairness had occurred. The Tribunal did not consider the investigating officer having
          made recommendations to be untoward and was not an indication that the decision was biased.

In addition, the Employment Tribunal also considered the possible implications under the Human Rights
Act. In particular, the right to a private life and whether it was reasonable for an employer to dismiss an
employee for conduct which occurred outside the workplace. However, in this case, the email sent was
clearly not meant to be private. The email was headed “It is your duty to pass this on” so Mr Gosden was
aware Mr Yates was likely to pass it on, and indeed had no control over whom Mr Yates forwarded it to.

Comments

Clearly the issue of what employees do and say outside of working hours via the use of email and other
social media is becoming increasingly topical and a growing concern for employers. The above case
should not be seen as a opportunity for employers to dismiss and discipline as a result of information it
finds out about an employee outside of the workplace. In this case, the Tribunal focused heavily on the
employers' reputation which may have been compromised.

That said, the decision is somewhat alarming for employees who see no harm in forwarding silly or joke
emails as long as they do so outside of work hours or to colleagues who they know will not be offended
by the content.


5.          Validity of a final warning may be revisited even if it is not appealed

In Davies v Sandwell Metropolitan Borough Council, the Employment Appeal Tribunal considered whether
the Tribunal was wrong not to take into account the circumstances surrounding a final warning when
determining the fairness of a dismissal.

The Facts

Miss Davies was employed as a teacher by Sandwell Metropolitan Borough Council (“the Council”). In
September 2004 she was issued with a verbal warning. Miss Davies was later issued with a final written
warning in February 2005.

Miss Davies appealed against the final written warning on the basis she claimed to have documentary
evidence which would have undermined the allegations against her because it showed that two of the
pupils making allegations against her were not present on the date in question.

The Council refused to hear this evidence because it had not been produced in time and it was agreed the
appeal could be heard by way of a re-hearing. Having sought advice from her trade union Miss Davies
decided to let the matter drop and not pursue it by way of a re-hearing in case the Council issued a more
severe sanction.

However, in 2006, when further allegations were made about Miss Davies’ conduct, the Council reached
the decision to dismiss her on notice on the basis that five of the allegations were considered well-
founded and because, in light of Miss Davies’ live final written warning, a decision to dismiss was in the
reasonable band of responses available to it.


Laytons – Employment Notepad March 2011                                                                   4
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The Employment Tribunal

The Tribunal considered the Council was entitled to regard the final written warning as live because the
employee had chosen not to pursue her appeal and present the evidence which undermined the
allegations that had been made against her.

As a result, the Tribunal held the Council was entitled to dismiss Miss Davies in light of these further
allegations. Miss Davies appealed.


The Employment Appeal Tribunal

The EAT held Tribunals should only investigate a final warning where there was evidence that it had been
issued for an oblique motive or in a manifestly inappropriate way.

It concluded that the circumstances surrounding the issuing of the final written warning and Miss Davies’
evidence which had never been considered were important and relevant both for the Tribunal and
employer to consider. The matter was referred back to the Tribunal accordingly.

The EAT’s decision is somewhat exasperating. It appears to place a greater onus on employers relying on
a previous warning in reaching a decision to dismiss, to consider whether there are any “unanswered
questions” or outstanding issues surrounding the issue of that warning. Failure to do so could lead to a
Tribunal questioning the validity of previous sanctions.

6.          Changes to PAYE on payments made after the issue of P45

From 6 April 2011, employers will no longer be able to apply tax code BR on taxable payments which have
been paid after an employee has been issued with their P45. Employers will be aware that they were only
required to deduct tax at basic rate and that the employee would be responsible for accounting for any
additional tax due in their own personal tax return.

HMRC has issued guidance which confirms that from 6 April 2011, employers must use tax code 0T in the
following circumstances where:-

1.          An employee starts work without producing a P45;

2.          A payment is being made and which has not been included in the P45 (i.e. a termination
            payment); or

3.          An employer starts paying an occupational pension to an existing employee in addition to their
            salary.

The above changes mean employees will no longer be able to benefit from the advantage of additional
cash flow by requesting payments be made after the issue of their P45 and at basic tax rate only.


7.          Equality Act Codes of Practice

On 6 April 2011, the Equality and Human Rights Commission’s Codes of Practice will take effect; copies of
the relevant codes can be found at http://www.equalityhumanrights.com/legal-and-policy/equality-
act/equality-act-codes-of-practice/




Laytons – Employment Notepad March 2011                                                                 5
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a substitute for legal advice. Laytons cannot accept any responsibility for
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Laytons – Employment Notepad March 2011                                            6
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