02 December 2016

Employment law

David Beswick, employment law partner at Eversheds, explores a rogue whistleblower and bullying amongst trainee staff

Q: Our business deals with sensitive contracts for government and scientific projects that are under strict privacy laws. Our employees are under no illusions of the seriousness of their work and the need to keep it under wraps. However, a national newspaper recently ran a story ‘exposing’ some of the projects we have. This has seen our reputation plummet and is jeopardising our long-term outlook as customers no longer trust us to keep schtum. Clearly, we have a mole in the camp, but how do we find out who they are – and what do we do once we find them?

A: If your company does not require its employees to sign a specific confidentiality and non-disclosure agreement (NDA), it should consider doing so immediately. Whilst employees are under an implied duty of confidentiality, having an NDA in place will assist in demonstrating that employees are fully aware of the standards of conduct to which they must adhere. This will then form the basis for fair disciplinary action, including dismissal in the event of a serious breach such as the one you describe.

We would suggest that you review the newspaper article to see if there is any element of ‘whistleblowing’ that may afford the ‘mole’ greater protection from disciplinary sanction. Based on the information you have set out, whistleblowing is unlikely to be relevant, however, it should be considered.

It is not clear from your question whether the newspaper article was based on an interview with the mole or if documentation has been sent across. If the latter then your IT team may be able to undertake a review of emails and unusual usage and/or transmission of documents to third parties and you can follow this up with an investigation with the individuals concerned. Normally, a company’s IT policy is drafted widely enough to allow such an investigation without breaching Data Protection laws.

It may be possible for the company to apply to court for a Norwich Pharmacal Order (NPO) against the newspaper concerned in order to obtain the name of the mole. A court will not grant a NPO readily and the general rule is that a journalist will not be required to reveal the source. However, if your company can prove that national security is at risk, such an order could be granted by the court.

Q: We run a training scheme to help local school-leavers get their foot on the employment ladder. They are all paid, but on temporary twelve-month contracts, and we offer no guarantee of permanent employment after their course has finished. Recently, one of our trainees has been accused of bullying a few of the other candidates about their abilities, saying they are in the wrong industry and should look for another career. Obviously this is unacceptable, and we want to deal with it, but are not sure what disciplinary action can be taken against non-permanent staff.

A: A company may usually treat its junior employees as it would any other employee, and take such disciplinary action as it deems appropriate. The fact that the trainee is a non-permanent member of staff will not impact the process, although with less than two years’ service the trainee will generally not have acquired protection against unfair dismissal. This may give the company more latitude in approach.

However, it should be noted that where providing training to make individuals ‘work ready’ is the main purpose of the arrangement, it is possible that they may be deemed to be ‘common law apprentices’. This is so even if they are not formally called apprentices by the company.

A common law apprenticeship arrangement has enhanced protection against termination. Except in cases of extreme misconduct, which case law suggests must be so serious that it is impossible to carry on teaching the apprentice, the contract cannot lawfully be terminated early. The bullying conduct you have described, whilst clearly unacceptable, is unlikely to be extreme enough to justify dismissal.

Where an apprentice’s employment is unlawfully terminated, the apprentice may claim breach of contract, entitling them to claim damages for the remaining term of the contract, in addition to future loss.

Our advice would be to review the contract and the arrangement in place with your trainee, to determine whether they may be a common law apprentice. If so, tread very carefully to avoid exposing the company to a breach of contract claim and consider action short of dismissal, such as a final written warning, as an alternative to dismissal.

60 second guide to: the minimum wage vs the living wage

The National Living Wage (NLW) is the name the Government has chosen to give to the new higher rate of the National Minimum Wage (NMW) for workers aged 25 and over, which is currently £7.20 per hour. The Government’s plan is that this will increase incrementally to what is expected to be over £9 an hour by 2020.

The NLW should not be confused with the voluntary ‘living wage’ rate calculated independently of the Government by the Living Wage Foundation to reflect the basic cost of living in the UK (currently £8.25 an hour outside London).

There are five different NMW rates, depending on age and whether the worker is an apprentice. With the rates increasing by age, it is easy to see how employers may attempt to avoid paying the NLW through the employment of younger workers. However, if an employer dismisses an older employee to avoid having the pay the NLW, this will be automatically classed as an unfair dismissal. It will also be unlawful age discrimination unless the employer can show their actions are justified. The age discrimination provisions will also apply to employers who treat older job applicants less favourably than younger candidates because of a desire to avoid paying the NLW.

Some employers are looking to vary existing employment terms and conditions to absorb the cost of the NLW, including consolidating certain allowances or supplements into basic pay, replacing benefits that don’t count towards the NLW with cash or generally reducing benefits across the board. Caution should however be exercised before making any such changes, not only because it is unlawful to subject a worker to a detriment because he or she qualifies for (or will or might qualify for) the NMW, or for a particular rate of the NMW.

Chris Beck

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