Case law round-up

In this section of the bulletin:

• Discrimination against companies
• Private messages at work: what your employer is reading
• Peripatetic workers and automatic enrolment

Discrimination against companies

Towards the end of 2015, we were reminded that it is possible for private companies, not just individuals, to gain protection against discrimination under the Equality Act 2010. In the case of EAD Solicitors LLP and others -v- Abrams, the Employment Appeal Tribunal (EAT) found that a company can be directly discriminated against where it suffers detrimental treatment because of the protected characteristic of someone with whom it is associated.

The case involved a member of a limited liability partnership (Mr Abrams) who chose to set up a private limited company to take his place as a member of the LLP. When Mr Abrams turned 62, the LLP objected to the vehicle company continuing to be a member of the partnership, as Mr Abrams would have been required to retire at that time if he had continued as a personal member. The company argued that it had suffered direct discrimination by reason of Mr Abrams' age.

The EAT upheld the company's complaint and clarified that there is nothing in the Equality Act which indicates that it is only individuals who can bring discrimination claims. Examples were also provided of other circumstances in which a company may be able to claim protection; for example, if a company loses a bid for a contract because it has a Jewish workforce or an openly gay CEO.

The case has potentially wide-reaching ramifications, as the Equality Act does not just apply to the employment arena but also to the provision of services, public functions and the disposal of property. A disgruntled contractor who is not successful in re-tendering for a contract may seek redress through this route, for example, if the decision not to renew was linked to an ageing workforce or because employees had raised complaints of harassment.

Private messages at work: what your employer is reading

The European Court of Human Rights' (ECHR) recent decision in the case of Barbulescu -v- Romania has sparked much debate around the ability of employers to monitor the personal communications of employees while at work. The ECHR held that Article 8 (Right to respect for private and family life) of the European Convention on Human Rights (the Convention) was not breached when the employer dismissed Mr Barbulescu after reading his personal communications.

Mr Barbulescu was employed as an engineer by a private company in Romania. He was dismissed for breaching his employer's policy that prohibited the use of company resources for personal purposes after it was discovered that he was using his work Yahoo Messenger account to send personal messages to his brother and his fiancée. This Yahoo Messenger account had been set up at the request of his employer for the purpose of responding to enquiries by clients. When disciplinary proceedings were brought against Mr Barbulescu, he claimed that he had only used Yahoo Messenger for professional purposes. However, this claim was refuted when his employer provided him with a transcript of his emails which demonstrated otherwise. Mr Barbulescu then brought a claim that the dismissal was unfair on the grounds that the employer had breached Article 8 of the Convention by monitoring his personal correspondence.

Although it found that Article 8 of the Convention had been engaged, the ECHR recognised that the state of Romania had to strike a fair balance between Mr Barbulescu's right to respect of his private life and correspondence, and his employer's interests. The ECHR held that the domestic courts were right to have regard to the transcript of Mr Barbulescu's correspondence as evidence of his breach - this was to prove that a breach had occurred, and no particular weight had been placed on the actual content of those communications.

Further, the ECHR found that it is not unreasonable for an employer to verify that employees are completing their professional tasks during working hours. The ECHR was of the view that access to Mr Barbulescu's communications was both legitimate and proportionate - the employer had monitored that information on the assumption that it was related to professional activities, and the monitoring was limited only to communications on Mr Barbulescu's Yahoo Messenger account and did not extend to other data or documents that were stored on his computer.

There have been some fairly exaggerated headlines following the judgment, suggesting that the case gives rise to a "snooper's charter". However, employers should note that this decision does not give them the ability to assume that they can monitor the personal communications of their employees. The judgment notes that Mr Barbulescu had been duly informed of the employer's regulations that prohibited the use of company resources (including computers) for personal purposes, and had in fact signed a notice from the company warning that employees' activities would be under surveillance when another colleague was dismissed for breaching this policy. In order to monitor the use of the internet by employees, employers should have a clear policy stipulating this and bring it to the attention of all employees (ideally with periodic reminders). Further, employers should be reminded that they can only dismiss employees if there has been a significant breach. If the company's policy does not explicitly prohibit the usage of the internet for personal purposes, then the mere existence of such activity will not constitute sufficient grounds for a dismissal.

Peripatetic workers and automatic enrolment

The High Court has recently issued a decision which may impact clients with peripatetic workers who spend a considerable amount of time working outside Great Britain. It is the first case where the Pensions Regulator's approach to automatic enrolment has been subject to a judicial review.

The case of The Queen on the application of Fleet Maritime Services (Bermuda) Limited -v- The Pensions Regulator concerned crew working on cruise ships and their employer's obligations under the automatic enrolment legislation. Fleet Maritime Services (Bermuda) Limited (the Employer), a company incorporated in Bermuda, is a wholly owned subsidiary of Carnival plc, an English company. Carnival owns the ships and most of these are registered in Bermuda. The Employer employs the crew (seafarers) who work on the cruise ships, uses a Guernsey-based company as its payroll and administrative vehicle, and has no place of business in the UK.

All the cruise ships spend the vast majority of their time outside UK territorial waters and the court had to consider whether a seafarer working on a ship which spent all or most of its time outside Great Britain "ordinarily works in Great Britain under the worker's contract" for the purposes of automatic enrolment requirements.

The Employer was seeking judicial review of the Pensions Regulator's decision to issue a compliance notice that certain categories of worker employed under contracts with the Employer were eligible for automatic enrolment.

The Court considered the line of employment case law on "ordinarily works in Great Britain" which mainly relate to unfair dismissal situations. Following the House of Lords' decision in Lawson -v- Serco, the Court found that the "base" test (i.e. where an employee's work travel begins and ends when travelling in the course of their work) will be applied to determine if a peripatetic worker "ordinarily works in Great Britain under the worker's contract" for the purposes of the automatic enrolment legislation.

A seafarer would therefore be ordinarily working in Great Britain during any period when he or she started and returned from a base situated in Great Britain, even if the ship spent most of its time outside Great Britain.

Please click on the links below for the other articles in the January 2016 edition of Work, rest and pay:

• Looking ahead: timetable for key areas of employment law reform
• Employment highlights
• Pensions update
• Corporate governance
• Remuneration Code for banking and financial services firms
• Consultation catch-up