Welcome to Walbrook Law’s latest employment update. This month’s edition includes a case confirming that injury to feelings awards are not available in Working Time Regulations claims. We also cover an interesting case where an employer was granted an order requiring an ex-employee to destroy confidential information belonging to the employer that the employee had unlawfully taken from the employer and misused for a competing business. There is a reminder about tighter rules on illegal working that come into force in July and we report on a case dealing with employment status in discrimination claims.

Ms Gomes won her claim for compensation for her employer’s breach of the Working Time Regulations (WTR). She hadn’t been provided with the necessary rest breaks. But did that also entitle her to damages for injury to feelings, usually claimed in discrimination cases?

No, said the Employment Appeal Tribunal. Injury to feelings compensation isn’t available in cases like this. Where there is an element of discrimination involved in a failure to allow rest breaks then, yes, injury to feelings may become relevant. But otherwise, it doesn’t apply.

Note, though, that if an employee’s health had gone downhill as a consequence of their employer’s WTR breach, that could be the basis of a compensation claim (damage to health, as opposed to injury to feelings).

Ms Pendleton was a teacher, married to the headteacher of another school. She had an exemplary record of service.

Her husband was convicted of making indecent images of children and voyeurism. Ms Pendleton decided that, although she didn’t condone what her husband had done, she wouldn’t leave him; she was a practising Anglican Christian and her marriage vows were important to her. She was eventually dismissed for having ‘...chosen to maintain a relationship with [her] partner who has been convicted of making indecent images of children and voyeurism.' This contravened the ethos of the school.

She won her unfair dismissal claim because of various failings. But the tribunal dismissed her claim for indirect religion or belief discrimination. While it found that she had a genuine belief that her marriage vow was sacrosanct, and the school had applied a provision, criterion or practice (PCP) (dismissing those who chose not to end a relationship in these circumstances), it held that no particular disadvantage had been shown. She would have been dismissed even if she hadn’t held that religious belief.

Ms Pendleton appealed and won; there had been indirect discrimination, said the Employment Appeal Tribunal. The tribunal had found that Ms Pendleton had this religious belief in the sanctity of marriage. The PCP that the school applied was intrinsically liable to disadvantage a group that shared that belief, and it had subjected her to a disadvantage. Her belief in the sanctity of marriage vows placed her under an additional burden to those who might have been in the same situation but who didn’t hold that belief. That was a particular disadvantage, given the ‘crisis of conscience’ that she faced.

On 12 July 2016, some provisions of the Immigration Act 2016 will come into force. These include:

- A new offence of illegal working, and the power to seize illegal workers’ earnings.

- Widening the offence of knowingly employing an illegal migrant to catch employers who have reasonable cause to believe that the person is an illegal worker. Punishment increases from two years to five years in prison.

If you haven’t already, make sure that your checks and processes are thorough and robust.

An employer has successfully argued that its confidential information stored on computers and electronic devices of its ex-employee and their new employer should be destroyed.

Insurance brokerage Gallagher’s former employee Mr Skritptchenko, admitted that he had taken a client list from Gallagher. His new employer, Portsoken had used the list to approach hundreds of Gallagher’s clients. An inspection of electronic devices and computer systems confirmed the misuse.

Important points in the case included:

- the defendants’ admission that they had taken and misused the confidential information, and they knew that what they were doing was wrong.
- the ‘high degree of subterfuge’ involved in the use of Gallagher’s confidential information.
- a lack of confidence in the defendants. The Judge said “...I am not satisfied that the defendants can be trusted to seek out and delete such material themselves, were they to retain it whether deliberately or inadvertently.”
- the likelihood of Gallagher being able to establish at trial that there had been a breach of confidence.
- that it would be the defendants’ IT experts, and not Gallagher’s, that would take delivery of the devices and computers and search for and delete the confidential information.
- although the confidential material would be removed from the defendants’ devices, that information wouldn’t be irretrievably lost; copies of imaging would be retained.

A person’s working status is important for all sorts of reasons, but it’s something that often remains unexplored until a problem arises. That is until someone claims employee rights or protection and the employer disputes their entitlement.

In Secretary of State for Justice v Windle and Arada, employment status was critical to the claimants’ race discrimination claims. To be an employee protected by discrimination law, they would need to show that they were in ‘employment under a contract of employment, a contract of apprenticeship or a contract personally to do work’.

Both claimants (Dr Windle was Czech and Mr Arada born in Algeria) were professional interpreters who worked for Her Majesty’s Courts and Tribunals Services (HMCTS) on a case-by-case basis. They brought race discrimination claims based on their having less favourable terms of service than British interpreters.

The tribunal held that they were self-employed and outside the scope of discrimination protection. Each assignment was a contract personally to do the work, but there was no mutuality of obligation during those periods in between assignments; in other words, no obligation on HMCTS to offer the claimants work, and no obligation on them to accept work offered.

A key point that reached the Court of Appeal was whether the tribunal was right to have taken account of the fact that there was no mutuality of obligation. The Employment Appeal Tribunal had decided that it was not relevant to whether a person was employed under a ‘contract personally to do the work’.

But the Court of Appeal restored the original tribunal’s decision, dismissing the claims. Mutuality of obligation isn’t the be all and end all, but it is relevant; a lack of it may influence, or shed light on, the character of the relationship. Where someone supplies services on an assignment-by-assignment basis they tend to have a degree of independence or a lack of subordination in their relationship at work, and that is incompatible with employment status. While each case will turn on its specific facts, consideration of all the circumstances requires that mutuality of obligation (or the lack of it) shouldn’t be ignored.

Walbrook Law is a specialist employment law firm based in the City of London, acting for employers and senior executives.

We advise employers across a range of sectors on all employment issues affecting their businesses. We are highly experienced in advising on restructuring, redundancy, performance management and disciplinary/termination issues. We are also experts in conducting employment tribunal litigation and dealing with complex areas of employment law such as restrictive covenants and employee competition, whistleblowing, FCA and other regulatory employment issues, and the Transfer of Undertakings Regulations (TUPE).

We also have a thriving practice acting for senior executives, including board directors of both private and publicly listed companies, partners/LLP members of professional services firms and senior employees working in all industry sectors, including banking, financial services, insurance and media. We have an established reputation in the City as leading advisers on the negotiation of senior executive service agreements and exit terms, partner/LLP member appointment/retirement terms and other contractual matters such as employee bonuses, commission arrangements and restrictive covenants.

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