Employment law

Whistleblowing

Parkins v Sodexho Ltd (2002) IRLR 109

In this case, the Employment Appeal Tribunal (EAT) took a broad but defensible view of the scope of a 'protected disclosure' for the purposes of the Public Interest Disclosure Act 1998.

The disclosure in question related to the employer's alleged breach of the applicant's contract of employment.

The applicant claimed that he was dismissed after complaining about a lack of adequate supervision which, he contended, gave rise to a breach of the health and safety obligations forming part of his employment contract.

He argued that a breach of a contract of employment is a breach of 'any legal obligation' for the purposes of the Employment Rights Act 1996 as amended by the 1998 Act.

A tribunal concluded that his application for interim relief was entirely without merit, but his appeal to the EAT was successful.

It is not sufficient, for these purposes, that there has merely been a breach of contract.

What has to be shown first is that the breach of the employment contract was a breach of a legal obligation under that contract.

Second, there must be a reasonable belief on the part of the employee that such a breach has happened, is happening or is likely to happen.

Thirdly, there must be a disclosure of that which is alleged to be the reason for dismissal.

In summary, the reason for dismissal must be that the employee has complained that his employer has broken the employment contract.

References

Legal & General Assurance Ltd v Kirk (2002) IRLR 124

An ingenious but (some might think) highly optimistic attempt was made in this case to extend further the scope of an employer's liability for references.

After a financial consultant's employment ended, the company claimed repayment of alleged advance commission payments.

The consultant disputed that the sum was owing and counter-claimed damages for negligent mis-statement, on the basis that the company was in breach of a duty of care in falsely asserting that he had owed it money.

His argument was that an assertion that he owed a debt of some 7,500 adversely affected his prospect of his obtaining new employment in the industry, since regulatory body rules provide that a person who owes an 'industry debt' in excess of 1,000 cannot be employed in certain capacities.

No prospective employer had sought a reference in respect of the consultant, but he argued that he had not applied for a reference in the knowledge that the content of any reference would prevent him from obtaining work with a prospective employer.

The Court of Appeal gave his argument short shrift - the making of a statement or the giving of a reference to a third party is an essential element of any cause of action based on negligent mis-statement.

Nor was there any basis for the consultant's claim that the company's conduct had breached his right under the European Convention on Human Rights 'to the peaceful enjoyment of his possessions'.

Even if an employee has the right to seek a particular type of employment, that cannot constitute a 'possession' within the meaning of the European Convention.

Terms of employment

Ward Evans Financial Services Ltd v Fox & another (2002) IRLR 120

The Court of Appeal ruled that a 'trust and confidence' obligation prohibiting two financial advisers from holding a material interest in a potentially competing company covered the formation, during employment, of a company which remained dormant until after their employment ended.

It does not follow from the fact that a company does not trade until after the employee's contract has terminated, that the employee's ability to serve the employer has not been impaired by his interest in that company while the contract continued.

On the facts, the employees had failed to act in the best interests of their employers and their interest in the dormant company (which they hoped to exploit after leaving their jobs) was a 'strong factor' in that failure.

Estoppel

Sajid v Sussex Muslim Society (2002) IRLR 113

In this case, the Court of Appeal addressed a practical issue in an area which has prompted much debate among employment lawyers in recent years.

A redundant employee presented a complaint to a tribunal which included a claim for more than 72,000 damages for breach of contract, as well as for unfair dismissal and a redundancy payment.

He made it clear that he recognised that the tribunal's jurisdiction in relation to breach of contract claims was limited to 25,000 and, therefore, reserved the right to rely on the findings of the tribunal in proceedings in another court to recover the balance.

He subsequently commenced proceedings in the High Court, claiming substantial damages for breach of contract.

His solicitors then wrote to the tribunal requesting that, in the light of those proceedings, the breach of contract claim in the tribunal be withdrawn, although the unfair dismissal and redundancy claims were to continue.

The tribunal chairman signed a decision to the effect that 'the breach of contract claim is dismissed on withdrawal by the applicant'.

In defending the High Court proceedings, the employer argued that the breach of contract claim had been concluded by the tribunal's order and that, accordingly, the doctrine of res judicata and/or issue estoppel prevented him from pursuing the same claim in another court.

A judge rejected that argument and the Court of Appeal agreed.

The underlying policy of cause of action estoppel and related doctrines, is that of finality of litigation and avoiding a multiplicity of proceedings on the same issue.

Generally, it is contrary to public policy and may be an abuse of the judicial process to try to reopen proceedings in a case which has already been litigated and finally determined by a court or tribunal in proceedings between the same parties.

However, in this case, the employee was not seeking to re-litigate a cause of action which had been litigated and finally determined in the tribunal.

The order dismissing his claim in the tribunal was not, and could not have been, intended either by the parties or the tribunal to constitute a final and binding determination dismissing the breach of contract claim.

There is no procedure for transferring claims from the tribunal to the ordinary courts and the employee had no option but to start a fresh case.

Therefore, the facts were distinguishable from those in Barber v Staffordshire County Council (1996) IRLR 209, where an employee's withdrawal of her claim for a redundancy payment did bar her from bringing fresh proceedings in the tribunal, relying on the same facts and making the same claim against the same former employer.

In Barber, the employee abandoned the previous proceedings on the basis that she did not think that they could succeed and there was no intention on her part at that time to bring fresh proceedings, either in another court or the employment tribunal.

Time limits

Apelogun-Gabriels v London Borough of Lambeth & another (2002) IRLR 116

The Court of Appeal confirmed that a tribunal had erred in regarding it as 'just and equitable' to hear a complaint of race discrimination that had been presented out of time.

The tribunal had taken the decision of the EAT in Aniagwu v London Borough of Hackney (1999) IRLR 303, as laying down a general principle that it is just and equitable to extend the time limit where the applicant was seeking to redress a grievance through the employer's grievance procedure before embarking on legal proceedings.

But, as the Court of Appeal pointed out, if an employee has deferred proceedings in the tribunal while awaiting the outcome of domestic proceedings, that is only one factor to be taken into account.

By Martin Edwards, Mace & Jones, Liverpool