Monthly Highlights - UK Employment Law - October 2022

During a turbulent month of mini-budgets and U-turns, there were also a number of important decisions handed down by the Employment Appeal Tribunal (the “EAT”). In our October update, we outline the EAT’s determination of retrospective privilege regarding internal investigation reports, highlight learnings from Ponticelli UK Ltd v Gallagher, discuss takeaways from Mogane v Bradford Teaching Hospitals NHS Foundation Trust and set out changes to right to work check requirements.

1. University of Dundee v Mr Prasun Chakraborty [2022] EAT 150: the Employment Appeal Tribunal (the “EAT”) has determined an original investigation report will not retrospectively become privileged if it is later amended by a party’s legal advisers.
   
   

   The facts:

   • Mr Chakraborty raised a grievance against his manager at the University of Dundee (the “University”) alleging, among other things, harassment, discrimination and racial abuse. Mr Chakraborty also alleged he had been falsely accused of fraud.
   • Following the accusations, the University appointed a professor to produce an investigation report, which was finalised on 28 February 2022. However, before the report had been finalised, Mr Chakraborty initiated proceedings in the Employment Tribunal.
   • The professor leading the investigation then sought legal advice as to the report’s contents.Following such advice, the professor amended the initial report and produced an updated version on 23 June 2022. Notably, the professor had also made her own amendments without the guidance of legal advice.
   • When producing the joint bundle for the Employment Tribunal, the University only included the amended report, noting that “[t]he report was amended and reissued on 23.06.2022 following independent legal advice.”Mr Chakraborty therefore applied for an order requesting a copy of the original report.

   The University’s submissions:

   • The University rejected Mr Chakraborty’s application on the premise that, whilst the original version of the report was not privileged at the point when it was created it retrospectively acquired legal advice and litigation privilege once the amended version was lodged because comparison of the two versions could allow conclusions to be drawn about the terms of the legal advice received by the University.

   The EAT’s findings:

   • As the University conceded, when it produced the original report in response to its investigation the University was not subject to legal advice or litigation privilege.
   • The legal advice received in respect of the original report would be subject to legal advice privilege.
   • There was no legal authority to invoke privilege retrospectively and therefore the University’s submissions were erroneous.
   • In any case, the EAT held it was difficult to see how Mr Chakraborty could infer what legal advice had been given because the professor had made amendments of her own to the original report.

   Key takeaways:

   • If an investigation report is drafted in order to obtain legal advice it may benefit from legal advice privilege, however, such privilege will not be applied retrospectively.
   • An investigation report expressly for the purpose of legal advice and review should be prepared at the outset. As investigation reports are often key documents in the event of employee litigation ensuing, it is often helpful for an initial draft to be privileged and to ensure (so far as possible) that only the final draft is disclosable in litigation.Specific legal advice should be taken at the time as to how best to achieve this in the particular circumstances and the report must not in that case be forwarded more widely than the identified legal advice team.
     
     
2. Ponticelli UK Ltd v Gallagher [2022] EAT 140: the EAT has ruled that the benefit of a share incentives plan (“SIP”) can transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) even where it does not appear in the employee’s contract of employment.
   
   

   The facts:

   • The Claimant opted into the employer’s SIP which was a voluntary arrangement and therefore did not form part of his employment contract.On 1 May 2022, the Claimant’s employment was subsequently transferred to a different entity under TUPE.
   • Where TUPE applies, ordinarily employees transfer on their existing terms and conditions of employment and any changes to terms and conditions will be void. Where an employer cannot offer a particular benefit, such as the share scheme relating to the current employer's business, it must offer a benefit of "substantial equivalence".
   • Here, the new employer attempted to argue that they did not need to provide a new SIP of “substantial equivalence” because it did not arise “under” or “in connection with” his employment contract. This was because the new employer did not operate a current SIP or share scheme for its employees.

   The EAT’s findings:

   • Even if the obligations created by the SIP did not arise “under” the contract of employment, they plainly arose “in connection with” that contract for the purposes of Regulation 4(2)(a) of TUPE. The SIP formed part of the Claimant’s broader financial package and benefits as an employee.

   Key takeaways:

   When buying a business, the following should be considered:

   • Where the current employer operates any form of share incentive to employees who will transfer: a detailed analysis of whether there is a risk of such scheme being considered part of the employee's terms and conditions of employment is needed.
   • Where the new employer does not offer share incentives to employees: it will need to consider (and inform and consult over) what can be offered as a substantially equivalent benefit when buying a business where employees do benefit from such a scheme or consider restructuring the deal in such a way that TUPE may not apply and a substantially equivalent benefit does not need to be offered (albeit, any substantial change to a key employee benefit is likely to be controversial and may require consultation).
     
     
3. Mogane v Bradford Teaching Hospitals NHS Foundation Trust (the “Trust”) [2022] EAT 139: the EAT has ruled that a redundancy consultation is not “genuine and meaningful” if the selection criteria would inevitably lead to a pool of one.
   
   

   The facts:

   • Ms Mogane and another nurse were both employed on fixed term contracts carrying out similar roles within the Trust. The Trust determined that Ms Mogane would be made redundant on the basis of the sole criteria that her fixed term contract would expire first.
   • Ms Mogane was informed she would face redundancy if no alternative employment could be found within the Trust.As no such alternative employment could be found, Ms Mogane was dismissed for redundancy.
   • Ms Mogane therefore brought action for unfair dismissal before the Employment Tribunal.The Employment Tribunal dismissed her claim which she then appealed to the EAT.

   The EAT’s findings:

   • The EAT upheld the appeal and found that Ms Mogane had been unfairly dismissed on the ground that there had not been a “genuine and meaningful” consultation.
   • For a consultation to be “genuine and meaningful”, it requires a fair procedure with consultation taking place at a stage when an employee or employee representative can still, potentially, influence the outcome. In this case, where the choice of criteria adopted to select for redundancy has the practical result that the selection is made by that decision itself, consultation should take place prior to that decision being made.

   Key takeaways

   Employers may wish to avoid disruption by determining the selection process before telling their staff and/or by creating a selection pool as narrowly as possible. In theory, the choice of selection pool is for the employer to make.  However, they should ensure the adopted criteria does not have the effect of determining a pool which is so narrow that the overall selection or process cannot be open to consultation or objective fairness. A pool of one will always be scrutinised by an employment tribunal, to ensure that it is a genuine pool of one and not, in fact, a selected outcome from a potentially wider pool.
   
   

4. Changes to right to work checks
   
   From 1 October 2022, employers must conduct right to work checks for its employees in one of three ways:
   
   
   1. a manual right to work check (for example checking the original document, in the presence of the individual);
   2. a right to work check using "identity document validation technology" (IDVT) through the services of an "identity service provider" (IDSP);
   3. a Home Office online right to work check.

For further advice on any of the issues raised above, please contact a member of the London Employment team.