Gagging clauses are good

employmentlaw employer employee #MetToo

Agree to settle workplace bullying

A tidal wave of public opinion is threatening to derail confidentiality agreements between employees and employers that can be in the interests of both.

Prime Minister Theresa May told the House of Commons in October 2018 that the government would act on employers’ alleged abuse of confidentiality or non-disclosure agreements.

The moral panic is about well-heeled and powerful bosses using a wad of cash to bribe and bully cowering employees into keeping schtum about how bosses victimized and abused them.

This comes in the wake of a revelation that a court stopped The Daily Telegraph from publishing details about a leading businessman’s bad behavior. It also follows the #MeToo furor about the Hollywood film mogul, Harvey Weinstein, using legally-binding agreements to keep film actresses quiet about his alleged abuse of them.

But is it that simple?

Settlement agreements

In employment, non-disclosure agreements can be part of a settlement agreement between an employee and an employer that settles a dispute. They usually occur when the employee is leaving the employer’s organisation with a financial payout.

Part of the agreement will typically state that the former employee cannot reveal details of the dispute, details of the agreement and often even the very existence of the agreement. A breach of the agreement can lead to legal action.

Yet, moral critics of such settlements are not telling the whole story. In fact, there is nothing stopping someone who signed an agreement from telling the authorities about the former boss’ illegal activities.

Whistleblowing protection is incorporated into employment law and protects disclosure by employees if it is in the public interest, done in good faith and carried out in a reasonable way. This protection cannot be surrendered or removed by any non-disclosure agreement – employees can take the money and still blow the whistle.

Sections 43(b), 47(b) of the Employment Rights Act 1996 protects an employee who reveals a criminal offence that has taken place at work or that an employer has failed to comply with legal obligations. Section 43(J) bans any agreement from preventing legally-sanctioned whistleblowing.

A settlement agreement is a very useful tool for compensating an employee in return for burying allegations against an employer. The agreement will only be binding if the employee has received independent legal advice from solicitors, who will advise on the merits of the agreement set against litigating the allegations. This means that victim employees will save big time on legal costs whilst still receiving compensation.

A binding settlement agreement with a confidentiality clause will serve the public interest in that employment tribunal cases are settled between the parties rather than by the courts – thus saving the public purse.

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Tribunal cases surge

employment tribunal, law, disputes, workers, business

Drop in tribunal fees leads to a rise in claims

The number of employment cases has rocketed by 39% since tribunal fees were scrapped last year.

The government’s Advisory, Conciliation and Arbitration Service (Acas) reports that claims made to them as the first step to an employment tribunal have increased from 1700 to 2200 a week since last July.

Its annual report for the year to April 2018 revealed that it handled 26,012 cases that were referred to the employment tribunal, compared with 18,647 claims in 2016/17.

In July 2017, the Supreme Court abolished fees of up to ÂŁ1,200 for an individual to take a case to the employment tribunal.

Acas chair, Sir Brendan Barber, said: “The number of people deciding to pursue a tribunal claim has definitely increased since the Supreme Court decision to scrap fees.

“Our annual report shows that demand for our early conciliation service increased by nearly 20 per cent and there’s been an almost 40 per cent jump in Acas cases that involve tribunal claims compared to the same period the previous year.”

Reduce costs

The government introduced fees in July 2013 to ostensibly reduce costs and vexatious cases. In the year to June 2013, there was an average of 13,500 cases lodged by individuals every three months.

The fees led to the decrease of cases by 67% and a decrease of cases brought jointly by two or more individuals by 73%.

The Acas report also revealed that they sought to resolve 715 disputes between groups of workers and their employers in 2017/18. Pay and employment were the main causes of disputes.

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Was Boris guilty of discrimination

When Boris said that women wearing burka’s looked ridiculous, like letter boxes and bank robbers, did he break any laws?

Since ‘Boris is Boris’ and most people will accept his eminent expertise on looking ridiculous, could his words lead to his collar being felt? If Boris were still Foreign Secretary and he directed his comments at his staff, would it be unlawful?

Two separate branches of law are engaged here.

Criminal law

Cressida Dick, the head of the Met Police has said Boris Johnson’s comments did not reach the bar for a prosecution for incitement to racial hatred.

Employment law

Whist Boris took the precaution of resigning as boss of a government department before he wrote his article, if written a month earlier, he may well have breached the Equality Act 2010. His newspaper article would have/did offend burka wearing women employees of the Foreign Office – a large government employer. As such, the boss would have breached section 13(1) of the Equality Act 2010.

The Act makes it unlawful to discriminate against a worker or treat the worker negatively, on the basis of ‘protected characteristics’ such as religion. Discrimination could be ‘direct’ if the ‘Boris boss’ spoke to a particular employee or ‘indirect’ if he directed his words at burka wearing employees in general in the workforce.

If he tried to enforce a ban on burka’s in the workplace, whilst permitting other employees to wear symbols of their faith openly, such as Christian crosses, then  again this would be less favorable treatment of the burka wearer and in breach of the Equality Act.

Consistency is key

The key for employers is consistency. If you ban some religious clothing or symbols whilst permitting other religious clothing or symbols, this will be unlawful. Ban them all or none at all.


Whether it’s a ‘Boris-type’ boss or any other employee, if there is a breach of a company’s policies on how to behave toward fellow employees, the employer should instigate the disciplinary procedure. Given what he said, Boris’ words breach every company’s code of workplace behavior.

The seminal case of Burchill-V- British Homes Stores 1980 sets out the essentials of a lawful disciplinary procedure. The process must start with a reasonable investigation of the facts of the alleged wrong doing.

The Conservative Party has now started the investigation.

Disciplinary hearing

If sufficient evidence is uncovered that suggests that misconduct may have taken place, a disciplinary hearing should take place.

Before the disciplinary hearing takes place, the employee accused of misconduct should be supplied with all the material that the employer will rely upon at the hearing.

At the hearing the employee should be given an opportunity to explain his version of events.

At the end of the hearing the employer should, having heard all sides, arrive at a conclusion as to whether misconduct took place or not. If the employer decides that misconduct took place, then a sanction that is within the range of reasonable responses to the misconduct should be delivered. This could be dismissal.

Given that the Conservative Party had to be dragged to the point starting of an investigation, it is probably unlikely that dismissal will be a likely sanction – removal of the whip in Boris’s case.

However, for most employees, given the sensitive nature of these matters in the workplace, dismissal is likely to be a lawful response to a finding of this type of misconduct.

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Good employer loses appeal in migrant right to work case

employment law, immigration, right

Immigrant workers need fairness in right to work disputes. Credit: Danny Mann

Foreign workers have a right to appeal if they face dismissal over doubts about their UK residency status, appeal judges ruled.

The Employment Appeal Tribunal made a ruling in an unfair dismissal case brought by Pakistani worker, Fahim Afzal, against his employers, a Dominos Pizza delivery franchise.

Judges ruled that the franchisee, East London Pizza, should have given Mr. Afzal an appeal against being dismissed for not showing that his limited leave to remain had been extended.

Managers sacked him in August 2016 because they feared receiving penalties under the 2006 Immigration, Asylum and Nationality Act for employing a migrant with no right to work. Yet, the appeal court found that their letter of dismissal had offered no appeal process.

Mr. Afzal had applied to the Home Office to extend his stay the day before his visa ran out on 12 August. He copied his application in an email to his boss but for technical reasons the attachment could not be opened.

Good employment practices

Mr. Afzal brought a case to the employment tribunal yet the court found in favour of East London Pizza. The employment judge found that the company had good employment practices, Fahim did not have the right to stay and there was no case for a rethink by the employer.

The main issue for the tribunal judge was that it was reasonable for the employer to believe that after the 12 August, Fahim’s chance to extend his stay had gone.

Yet, the appeal judges ruled that there had been an error of law and Mr. Afzal should have been given the chance to prove he could have remained.

The appeal judges, though, did not reverse any other tribunal findings, including the dismissal. The case will go back to the employment tribunal for a final ruling.

In general, employers can confirm the status of a foreign worker at the Employer Checking Service. An employer has 28 days from the date a worker’s visa or right to work expires to obtain a status notification from the Service.

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New law on using personal data

Privacy, data, employment

Privacy means more work for employers

New legislation will greatly increase the compliance burden on employers when they manage employee personal information.

Failure to comply can result in a maximum fine of 4% of their organisation’s global turnover.

Employers will now have to use clear language and explicitly seek the permission of employees and others about keeping and processing sensitive personal data under the new General Data Protection Regulation (GDPR).

The European Union’s regulation comes into effect in the UK on 25 May and greatly increases the rights employees have over their personal data held by employers. The UK government is updating the current Data Protection Act 1998 and a new act will incorporate the GDPR.


Sensitive data

The new regulations will also cover personal information about individuals collected for consumer and commercial purposes as well as covering current and former employers and contractors.

The law identified ‘personal data’ and ‘sensitive personal data’. Sensitive data includes: racial or ethnic origin, political views, religion, philosophical beliefs, trade union membership, information about sex and sex identity, health, and biometric data that identifies an individual. Criminal convictions are left to national jurisdiction.

Explicit consent

The key for data controllers is to obtain specific consent from those whose data employers manage. Then manage the data, exactly in accordance with the permission granted and for no other purpose other than expressly authorised.

An employer, especially a large employer, will likely need to increase administrative resources to follow the new rules. The person authorized to keep data, the ‘data controller’, will have special responsibilities and will need to demonstrate that rules are being adhered to. The data controller will need to ensure that individuals have a right to privacy over their publicly available information.

In terms of recruitment, it may mean more requests to supply copies of all interview notes or scoring sheets along with any other relevant documents. A subject access request will no longer require a ÂŁ10 fee.

Explicit consent from job candidates will be needed for them to fill in automated and online application forms.

For further information about employment law and sexual discrimination and harassment please contact Sharma Solicitors 0345 430 0145.

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Employer liable for sex pest employee

sex harassment, vicarious liability, employment law

Anti-discrimination procedures could save money

A travelling theatre company was forced to pay over ÂŁ10,000 after a victim of sex harassment was forced out of her job.

In the case of Haines v Rainbow Theatre Productions, ET/1400362/2017, at Southampton Employment Tribunal, the judge ruled that the company was ‘vicariously liable’ for the sexual harassment and discrimination inflicted upon actress Helen Haines.

The 26-year-old employee put up with demands for sex, lewd comments and abuse from fellow actor, Chay Lewandowski from 30 August until she resigned on 5 November 2016.

After she left, Ms Haines lodged a grievance but abandoned it after the company took a month to respond. Eventually, she took legal action blaming Rainbow Theatre for a breach of Section 13 of the Equality Act 2010 – direct sex discrimination.

The tribunal heard that as well as directly demanding that Ms Haines have sex with him, Chay Lewandowski’s harassment also included calling her a “slut”, and a “c…”. The play’s director, Lee Payne, joined in the abuse by saying “I reckon it’s Helen’s vagina making those noises” and “your tits aren’t as big as the last actress”.

Vicarious liability

Under Section 109(1) of the Equality Act, an employer is vicariously liable for the discriminatory acts of their employees. The aim of the law is to force employers to stamp out discrimination in the workplace they control.

Very often, it is mainly the employer who is in the sights of a victim employee when they litigate. The employee perpetrating the discrimination is simply added for good measure. After all, it is likely that only the employer has the money to pay the award if the victim wins.

No get out of jail card for employer

The employer argued that if discrimination took place, it was nothing to do with them it because they had already taken all reasonable steps to prevent sex discrimination. Employment lawyers call this the ‘statutory defense’. It is available under Section 109(4) Equality Act.

To dodge liability using the statutory defense, the employer must prove that they took all reasonable steps to prevent the discrimination. Reasonable steps include, putting in place clear policies preventing discrimination and then effectively policing those policies. Enforcement of the anti-discrimination polices should be supplemented by training and courses on required conduct at work.

In the Rainbow Theatre case, not only did the Tribunal reject this defense, but the court also heard that the employer’s conduct did not even make to the jail door of the statutory defense.

It is relatively rare for employers to succeed with the statutory defense. To be able to rely upon it requires foresight, forethought and above all, advance expenditure for training. Sterile policies in an employee handbook will keep the jail door firmly locked.

For further information about employment law and sexual discrimination and harassment please contact Sharma Solicitors 0345 430 0145.

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Employers on the hook for their tax cheating workers

employment, law, tax, workers

Bosses must stop tax evasion

A new law calls on employers to do what they can to stop their employees and contractors from evading their tax.

The Criminal Finances Act 2017 (CFA 2017), means that employers commit an offence if they fail to prevent an employee, agent or other person engaging in tax evasion in the UK or abroad.

It is also an offence if people associated with a corporate body knowingly help another organization in criminally facilitating tax evasion.

The law is a new attempt to criminalise taw evasion by targeting freelancers, contractors or consultants who cheat. Section 45 of the law has created two new offences that came into force on 30 September.

The section states that a body corporate or partnership will be guilty of an offence if a person commits a UK tax evasion facilitation offence when acting in the capacity of a person associated with that body.

It goes on to state that such a person commits a UK tax evasion facilitation offence by being knowingly concerned in, or in taking steps with a view to, fraudulent tax evasion by another person and aiding, abetting, counseling or procuring the commission of a UK tax evasion offence.

Employers can benefit by using consultants rather than employees because they do not have to deduct income tax from the worker or pay employer’s national insurance. Nonetheless, it is the contractors who are the main beneficiaries. The law wants consultants to be genuine contractors and not employees masquerading as consultants to evade income tax.

Employers should have procedures

An employer should have procedures that stop their workers from evading tax in order to comply with the new law. Nonetheless, employers’ procedures do not have to prevent any and all tax dodging in order to be reasonable. Furthermore, an employer can be tried summarily or on indictment and can be punished with a fine.

The law treats employees, workers, self-employed contractors and freelancers differently. Employees have the greatest protection under the Employment Rights Act 1996 (ERA) and employers usually deduct their income tax payments through PAYE. Workers are not quite employees but they enjoy some employees’ rights such as the right to paid holidays and the right not to suffer unlawful deductions from wages. Freelances do not come under the ERA. Under normal circumstances, they are treated as if they own their own business and so are responsible for their own tax.

The Government has published guidance on tax evasion: Tackling tax evasion: Government guidance for the corporate offences of failure to prevent the criminal facilitation of tax evasion. It can be found on the website.

For further information about employment law please contact Sharma Solicitors 0345 430 0145.

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Employee theft grievance taken to the top

Employment law, theft, sacking

Bosses need to make secure theft accusations

Confusion over employment law led to a top company making an embarrassing public climbdown.

Tesco was forced to withdraw its accusation of theft against a worker after he staged a 21-hour public protest.

The accused worker, security guard, Adama Jammeh, climbed up to the girders in the roof space in Tesco Extra in Reading, in October 2017, after being sacked.

He turned his protest into a public spectacle by posting Facebook videos claiming the company had wrongly accused him of stealing ÂŁ20,000 of electrical goods.

Bystanders were forced to abandon their shopping and flee the store as police controlled the scene and as the media descended on the incident.

Tesco later did an embarrassing climbdown in a letter admitting that Mr Jammeh may have suffered ‘a significant injustice’ and that ‘no formal proceedings’ against him had begun.

The letter brought the protest to an end but unhappily for Mr. Jammeh, he was arrested by police for disturbing the peace.

Reasonable belief

The incident highlights the need for both employer and employee to behave in a way an employment tribunal would regard as reasonable given the circumstances. A tribunal will allow dismissal for theft of a significant amount of goods, where there is a ‘reasonable belief’ of guilt – section 98 Employment Rights Act 1996. But belief is not enough.

The seminal case of British Home Stores -V- Burchill 1980 states that the employer has to carry out a reasonable investigation before a disciplinary hearing. The employee must receive the information discovered before the disciplinary hearing. At the disciplinary hearing, he should be permitted to have a work colleague or trade union representative, state his case and afterwards have the right to appeal.

A court would also expect that the employer to consider how serious the offence was, the employee’s general performance and ensure employees are treated in a consistent way.

Employees should always have access to a grievance procedure to complain about false accusations of theft, as most will shout their innocence from the rooftops.

For further information about employment law please contact Sharma Solicitors
0345 430 0145.

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Employers can renege on pension benefits says court

Pension dispute

Caption: Pension scheme change

Appeal judges have ruled that a top company can slash its pension costs despite objections from employees.

The Court of Appeal, in IBM UK -V- Dalgleish, backed the company’s plea that the High Court should not have found it breached its duties as an employer.


In 2014, the High Court decision turned on employment law that regards mutual trust and confidence between employee and employer as an implied part of an employee’s contract.

Judges had agreed with employees that when IBM changed its pension scheme they broke a ‘reasonable expectation’ – based on previous statements that they would continue with their initial scheme. Judges also concluded that the company’s financial situation did not force IBM to make the change.

IBM made changes to ‘discretionary’ parts of its pension scheme so that its costs in the future could be reduced. Managers wanted to exclude future salary increases from the pensionable pay used to work out its defined benefits. It also terminated future increases to the defined benefits upon retirement as well as enhanced early retirement.

Reason over trust

But appeal judges ruled that employees were being too emotional and the High Court put too much emphasis on them being disappointed because their expectations were not met.

Appeal judges declared that a rational approach was required and looked at whether other issues should have been taken into account at the High Court. The bottom line was that IBM had acted rationally when they made their decision and that meant that there was no breach of mutual trust and confidence.

However, whilst the employer was permitted to change the discretionary benefits available under the pension scheme, they were locked into the contractual commitments they made under the scheme. Discretionary benefits gave the employer some leeway but the contractual benefits were set in stone.

The lesson for the employer was: if you act on your discretionary powers you must act reasonably. In this case, the Appeal Court found IBM acted with reason and justification.

The High Court decision was regarded as a landmark in pensions cases but the employees could still go to the Supreme Court.

For further information about employment law please contact Sharma Solicitors 0345 430 0145.

Photo credit: Howard Lake

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Judges outlaw paying fees for employment cases

Employment Tribunal, fees

Trade unionists hail win against fees








Requiring women to pay a fee for taking a discrimination case to an employment tribunal breaches the Equality Act, the Supreme Court has ruled.

This was one reason the Supreme Court upheld an appeal by the union, Unison, against government policy that charged workers fees to lodge a claim at an employment tribunal.

The result of the case is that government has immediately dropped its charges but will further consider the issue at a later date.

Supreme Court judges in July 2017 heard that women were indirectly discriminated against because they were more likely than others to take a particular type of case that incurred higher fees.

The Court said:

“The Fees Order is indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage because a higher proportion of women bring type B than bring type A claims.”

Pricing workers out of justice

The Court also ruled the government’s fees breached UK and EU law because they priced workers out of obtaining justice.

As the Supreme Court said:

“Fees must be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by forgoing an acceptable standard of living, the fees cannot be regarded as affordable.”

The Supreme Court also stated that all fees paid from 2013 will have to be refunded by the Lord Chancellor’s Department and the government has agreed to do this.

From 2013, the government introduced fees from ÂŁ400 to ÂŁ1,200 for people lodging legal claims in order to have their cases heard at an employment tribunal. There were other fees of up to ÂŁ600 that might have to be paid depending on the case. To appeal an Employment Tribunal decision cost ÂŁ1,600.

The Court heard that the number of claims fell by just under 70% because of the fees. Judges were also told that 86,130 cases were brought to a tribunal in 2015/16, and ÂŁ11.6m was paid in tribunal fees in 2016/17.

The Supreme Court ruling reverses the outcome of the High Court case in August 2015 that Unison lost. The High Court concluded that the early conciliation process and fees could be responsible for the decrease in the number of cases.

For further advice about employment disputes please contact Sharma Solicitors 0345 430 0145.

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