November Blog - 04/11/2019

Disciplinary action: when too much advice can come at a price

When you have a disciplinary issue to deal with, you'll generally need to carry out an investigation into the incident and produce a report of the findings. It's common for employers to take advice from legal or HR professionals during this process – this can involve them reviewing the report and changes being made before the final version is disclosed.

This process isn't without risk: a recent Employment Appeal Tribunal (EAT) judgment has helped clarify how to approach it in a way that won't land you with an unfair dismissal ruling.

The case involved an academic who was investigated for breaching his university's rules after being accused of a sexual relationship with a student. The rules said that he could only be dismissed if the conduct was of an 'immoral, scandalous or disgraceful nature'. The university's disciplinary investigator drafted a report, which was reviewed by its HR department and in-house lawyer. On the lawyer's advice, the investigator removed the report's conclusions. Many of these were helpful to the academic's case, including a verdict that his conduct hadn't breached the university's rules.

Following a disciplinary hearing and unsuccessful internal appeal, the academic was dismissed. He claimed unfair dismissal at an Employment Tribunal. Amongst other things, he said that the disciplinary investigation was unfair as the report's conclusions weren't disclosed to the disciplinary panel.

The tribunal and EAT dismissed his claim. Both decided the changes to the report were reasonable and fair for these reasons:

  • The changes focused the report on the facts of the case: a disciplinary panel must make conclusions from those facts.
  • The investigator had accepted the advice and made the changes himself. He wasn't subjected to improper pressure and didn't withhold evidence from his report.
  • There was no suggestion of any serious irregularity in the way the investigation had been handled.

What this means for you

When taking disciplinary action:

  • Don't use an HR consultant or a lawyer to draft, or co-draft, the investigation report – let the investigator do it.
  • The report must focus on the facts alone and not make conclusions or recommendations about the employee's liability – that's for the person or panel dealing with the disciplinary action to decide, based on the report.
  • Amendments to reports by HR consultants or lawyers mustn't be too extensive, or else they might not be viewed as the work of the investigator, making any dismissal unfair.
  • Never force or pressurise the investigator into amending their report.
  • Advice from an in-houseHR team should be limited to matters of law and procedure only, and not questions of liability. Advice from lawyers must be marked 'legally privileged and confidential' and not disclosed to any third party (including a tribunal).

How we can help

We have a suite of Disciplinary letters for each step in the process. Disciplinary and dismissal procedures are available in our Employee handbook and as optional extras within our Employment agreements.



November Blog - 11/11/2019

Face up or shut up: white lie snowballs for employer in dismissal case

Honesty is always the best policy when conducting employee relations. Particularly when dismissing an employee to avoid a potential confrontation, says the Court of Appeal.

In this case, a retailer dismissed an employee after telling her she was being made redundant. She had less than 2 years' service, so couldn't claim unfair dismissal or a redundancy payment. The real reason for her dismissal was because she was suspected of stealing, or intending to steal, stock.

It was a well-intentioned lie, as the employee could leave with paid notice, a reference and a clean employment record. The employer would get a smooth, non-confrontational exit. Or so they thought.

The employee was of African descent and believed the real reason was because of her race. She issued a grievance, which was ignored. So she started a claim for race discrimination at an Employment Tribunal.

When claiming discrimination, a tribunal initially requires the person claiming it to prove it happened. But if it's satisfied that the facts show a clear (prima facie) case that a discriminatory act occurred – with no other contradicting evidence or credible explanation for it – then instead the employer must prove that the discrimination didn't occur. This is known as 'shifting the burden of proof'.

The employer's initial defence was that she was made redundant for financial reasons. But shortly before the tribunal hearing, they changed it to the real reason for dismissing her.

The tribunal concluded that the employer based its belief on an inaccurate stereotype of black people being likely to steal. It awarded nearly £30,000 compensation, which was increased by 25% as the employer failed to follow the Acas Code of Practice on discipline and grievance procedures, and some of the employee's legal costs.

The employer appealed to the Employment Appeal Tribunal and Court of Appeal, arguing that the employee being black and having been dismissed were not enough to shift the burden of proof. Both appeals failed.

What this means for you

The case shows how situations can snowball if you dismiss an employee and cover up the real reason, even if the false reason is given with good intentions.

It also shows why you must follow the Acas code of practice when dealing with a grievance and follow a fair and reasonable procedure when considering dismissing an employee.

How we can help

We have a suite of Disciplinary letters for each step in the process. Disciplinary and dismissal procedures are available in our Employee handbook and as optional extras within our Employment agreements.


November Blog - 18/11/2019

A contract is a contract (except maybe if it's wrong...)

We're all human and mistakes can happen. Contracts are no different. The Court of Appeal has recently clarified the law on how contractual mistakes are corrected.

Contractual mistakes can be:

  • Unilateral: one party is mistaken about the contents of the contract; the other knows or ought to have known of the mistake.
  • Common: the mistake is shared by the parties. This can happen when parties have:
    • reached an enforceable agreement(perhaps over email or verbally) but a subsequent written contract doesn't include some of the agreed terms; or
    • a common intention– the general high-level aim is agreed, but not an enforceable agreement. When the finer details are put into a written contract, that contract doesn't accurately reflect the aim.
  • Mutual: one party has an understanding of a contractual fact or intention that differs from the other (i.e. the 2 parties are at cross-purposes).

If the parties agree to correct the mistake, they can usually do it by signing a deed of rectification. If they can't agree, they need to apply to court for an order to rectify the contract.

The mistake in the Court of Appeal case fell into the common category. The parties had a common intention but the document they signed didn't accurately reflect it: it went beyond it and imposed extra obligations on one party. The dispute was about whether that party should have to honour those extra obligations.

Previous cases about common mistakes meant that the law was unclear about the evidence that's required to prove that a mistake has occurred. So the court gave guidance to clarify the problem.

It said that where parties have a common intention that the subsequent contract doesn't accurately record, a subjective test applies. This means the contract can only be rectified if the parties can prove they had a common intention and that it continued up to the time the contract was signed. It's subjective because it's the judge's own evaluation of what the parties believed, based on the evidence they provide (e.g. emails sent between them or any other available documents). In this case, the decision was that the contract be rectified to remove the extra obligations.

If instead the parties had reached an agreement about the terms of a contract, with a subsequent written agreement mistakenly not including some of those terms, an objective test would have applied. Here, the judge decides what the terms of the initial agreement were by assessing what an ordinary person would think them to be, based on the facts and the available evidence.

What this means for you

While this case clarifies a complex point of law for lawyers, your key takeaway from the judgment is that corrections are not easily achieved in court. Always review contracts thoroughly before signing them, taking legal advice if necessary. Ensure you have a written paper trail before concluding an agreement that is due to be put in writing.

How we can help

We have various agreements to help you contract with other organisations, such as an Agency agreement, an Agreement for the supply of goods, a Consultancy agreement and a Distribution agreement.