United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0501/12/RN

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 16 April 2013

Before

THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)

DR B V FITZGERALD MBE LLD FRSA

PROFESSOR K C MOHANTY JP

CITY AND COUNTY OF SWANSEA APPELLANT

MR D A GAYLE RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

SUMMARY

UNFAIR DISMISSAL – Reasonableness of dismissal

Employers conducted covert video surveillance on the Claimant, when he was for good reason suspected of playing squash during work time, whilst claiming payment for being at work at the time.  That confirmed he was seen at the sports centre on a succession of Thursdays when other material showed him to have claimed to be at work, and when he had no permission from his employer to be at the centre.  The Employment Tribunal held him in fundamental breach of contract so as to justify summary dismissal, and rejected his claim for race discrimination.  However, it upheld a claim for unfair dismissal (though awarding nil compensation, for contributory conduct) because of the Tribunal’s distaste for the employer’s use of covert surveillance, its view that art. 8 was engaged and broken in doing so, and the employer’s lack of awareness of its obligations (none of which were actually relevant) under the Data Protection Act.

The ET found the investigation unreasonable, essentially because it was more thorough than it needed to have been, and because of its view that a person defrauding his employer had a reasonable expectation of privacy in respect of his acts when doing so.

These views were rejected on appeal as wrong, and misplaced, and the appeal allowed with a substituted finding that the dismissal was not unfair.

THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)

1.            This appeal raises the question whether an employee has a right to privacy when doing acts which were defrauding his employer company. 

2.            Mr Gayle alleged direct discrimination against him on the grounds of race, that he had been wrongfully dismissed, that he had been subject to an unfair dismissal and claimed arrears of holiday pay.  An Employment Tribunal at Cardiff, chaired by Employment Judge Clarke held in reasons delivered on 27 June 2012 that all claims should be dismissed save for unfair dismissal.  That the Tribunal found proved but it awarded no compensation at all since it found that both the basic and compensatory awards were to be reduced by 100% for contributory behaviour.

3.            The Employer appeals against that decision.  The employee is debarred from participating having given no answer to the appeal and not having replied to letters from this Tribunal

4.            Apart from other matters which are not material to the appeal the facts centre on events which began on 29 July 2010.  The Claimant was seen some time between 4.30 pm and 5.00 pm by a senior employee at a local sports centre playing squash; the co-employee thought he should have been at work.  On investigation it appeared that he had not clocked off that day until 5.43 pm.  On what was another Thursday, 26 August 2010, he was again seen at the local sports centre at 4.55 pm; on this occasion he sent a work message at 5.10 pm to his employer telling his employer that he was at work and just finishing, he had rung the office but there had been no answer.

5.            The employer Council continued with pre-arranged covert surveillance by a private investigator armed with a video camera.  On five subsequent Thursdays - 9, 16 and 23 September, 21 October and 4 November - he took video footage.  That showed the Claimant at the sports centre.  The time of taking the video was said to be when he should have been at work.  He had not clocked out; he was therefore playing sport during the time that his employer paid him to work.

6.            The Tribunal found those matters as fact.  In addressing the case of unfair dismissal it concluded, as was inevitable given those findings of fact, that the employer genuinely believed that he was deliberately claiming time he had not worked and absenting himself from work for his own personal business during work hours.  That belief was based on reasonable grounds and it justified dismissal.

7.            The issue for us arises in respect of the investigation which the employer undertook.  As Mr Cohen, who appears before us though he did not appear below, puts it, the Tribunal found that the dismissal was unfair because the investigation was too thorough.  So put the error of approach is obvious.

8.            The reasoning was developed in paragraphs from 97 through to 102.  Essentially at paragraph 97 the Tribunal concluded that by 26 August the Council had had all the evidence it needed that the Claimant was being untruthful as to his whereabouts during work time.  It commented:

9.            At paragraph 99, it noted that the Council had not considered any of the matters which the Code (that being a reference to a code promulgated by the Information Commissioner) set out as important.  First there had been no impact assessment.  Secondly, rather oddly it might be thought, that the Council did not consider whether to alert others, including members of the public, to the fact that a covert operation was under way; thirdly that they did not consider whether they were investigating criminal activity or equivalent malpractice (although the Tribunal added that the Claimant’s conduct was capable of those descriptions), fourth, did not seek to limit the time frame for surveillance, fifth, observed the Claimant at a place “where he had a legitimate expectation of privacy”, sixth, did not enter a contract with the private investigator by which the Council could require him to collect information in a manner that satisfied its legal obligations and finally did not ensure the deletion of irrelevant data such as pictures of other people.

10.         It then came to its conclusion in these two paragraphs:

“101. To be clear, we have concluded that the process by which the Council dismissed Mr Gayle involved an unjustified interference with his Article 8 right to a private life.  Applying the case of X v Y, [that is a reference to X v Y [2004] IRLR 625 CA] we consider that: the circumstances of his dismissal fell within the ambit of Article 8; the state had a positive obligation to safeguard his Article 8 right (as, indeed, did the Council as a public body); in all the circumstances, the Council’s interference with that right was unnecessary and disproportionate; the fact that the Council had a permissible reason to dismiss Mr Gayle is not by itself sufficient since it could have fairly dismissed him without such interference.  We are in no position to award Mr Gayle a remedy for this breach; we make this finding purely to support our conclusion that this rendered his dismissal unfair for the purposes of Section 98(4) ERA.

102.   If were wrong about that, and there was no breach in this case of Mr Gayle’s Article 8 right to a private life, we would still have found his dismissal unfair for the purposes of Section 98(4) ERA because of the Council’s inexcusable ignorance of its obligations under the DPA (as clarified in the Employment Practices Data Protection Code), with the result that its investigation could no longer be considered reasonable.”

11.         It went on at paragraph 104 to observe that on the evidence presented during the hearing it considered that his dismissal for misconduct was inevitable and the evidence of his misconduct clear and compelling such that he was fully to blame for his dismissal and at paragraph 105 found it was in fundamental breach of the implied term of mutual trust and confidence.

12.         The essential concentration of the submissions of Mr Cohen was upon the Tribunal’s treatment of Article 8 of the European Convention on Human Rights and upon the Tribunal’s observations about the Data Protection Act.  As to Article 8 the contention was that the Employment Tribunal misunderstood the exercise which should have been performed.  Article 8 is in these terms:

13.         Mr Cohen argued that there was here an error of law in deciding, as the Tribunal did, that Article 8 was engaged.  In a footnote to its paragraph 41.2 the Tribunal observed that the filming by the private investigator took place in a location where the Claimant had a reasonable expectation of privacy - his sports club - even if he was not clocked off at the time.  That linked the expectation of privacy to one feature only.  That was location.  Yet the evidence was, he submitted, that the photography was of the Claimant outside the sports centre, as he was leaving it.  He did not go so far as to submit that to photograph a person in a public place could never be a breach of Article 8(1), and we have to observe that the much is bound to depend upon the particular circumstances.  For instance, the regular retention of CCTV footage of public places from cameras positioned to deter criminal activity or to record matters of concern is unlikely to engage Article 8(1) though it might lead in due course to a breach if it were coupled with the dissemination of the material recorded for purposes other than those for which the surveillance was instituted in the first place - see the case of Peck v United Kingdom [2003] 36 EHRR 41 in which the applicant to the European Court was seen walking around his local town centre with a large knife in the process of attempting suicide.  The footage was subsequently released to the press and to the television media with inadequate steps to mask the identity of the applicant.  The combination of those two features led to the European Court regarding the circumstances as having been a violation of Article 8.

14.         We do not consider that generally the taking of photographs or the making of observations of individuals in public places will constitute a breach of Article 8 because such individuals will not in those places have the reasonable expectation of privacy to which, amongst others, this Tribunal referred.  But Mr Cohen does not put matters on such a limited basis.  He argues that there was here a combination of three factors which taken together meant that there could be no breach of Article 8(1) such that a Tribunal would not need to go on to consider whether the provisions of Article 8(2) excused or justified the breach.  First, the photography was in a public place of somebody in a public place.  Despite the suggestion in the Tribunal’s footnote that the Claimant was in the sports centre, it is quite plain to us from paragraph 39 of its decision that it thought that the video footage was of him outside the doors of the sports centre and therefore in a public place; see in particular the second last sentence referring to a typical video.

15.         Next as a factor, he relied upon the fact that this was at a time when the Claimant was “on the clock”; it was in his employer’s time.  It is a feature of an employment contract that an employee is subject to the reasonable direction of his employer.  An employer is thus entitled to know where someone is and what they are doing in the employer’s time.  An employee can have no reasonable expectation that he can keep those matters private and secret from his employer at such a time.  To do so would be to run contrary to the contract he had entered with his employer. 

16.         Thirdly Mr Cohen relied upon the fact, as it turned out to be, that the Claimant here was a fraudster; he was busily engaged on his own business whilst receiving his employer’s money for his employer’s business.  He was presenting himself as having been elsewhere and on his employer’s business when he was not.  The fact that a person in such circumstances can have no reasonable expectation that their conduct is entitled to privacy is not only correct in principle but has the authority of the words of Longmore LJ in Rugby Football Union v Viagogo Ltd [2011] EWCA Civ 1585 at paragraph 28:

“Once it is established that there is arguable wrongdoing by unidentified individuals and that there is no realistic way of discovering the arguable wrongdoers other than a Norwich Pharmacal order, it would generally be proportionate to make such an order revealing the identify of those arguable wrongdoers.  There can be no reasonable expectation of privacy in respect of data which reveals such arguable wrongs…”

17.         Albeit in the context there of an application for disclosure of details of otherwise unknown persons who had purchased or sold tickets at an overvalue those words justified, said Mr Cohen, the conclusion that a person doing wrong could have whilst doing so no reasonable expectation of privacy. 

18.         The observations came for further comment in the Supreme Court: Rugby Football Union v Consolidated Information Services Ltd [2012] UKSC 55.  In the Judgment of Lord Kerr SCJ, with whom Lords Phillips, Clarke and Reid and Lady Hale agreed it was said (at paragraph 46):

“In suggesting that it would ‘generally be proportionate’ to make an order where it had been shown that there was arguable wrongdoing and there was no other means of discovering the identity of the arguable wrongdoers, Longmore LJ might be said to have somewhat overstated the position although it is to be noted that this was not expressed as a presumption in favour of the grant of the order.  The particular circumstances affecting the individual whose personal data would be revealed on the foot of a Norwich Pharmacal order will always call for close consideration and these may in some limited instances displace the interest of the applicant for the disclosure of the information…”

19.         The general thrust of what Longmore LJ had to say was thus approved if not its precise formulation.  But in any event in this Tribunal in McGowan v Scottish Water [2005] IRLR 167 a Tribunal presided over by Lord Johnston considered the case of an employee who was suspected of falsifying his timesheets with regard to call-out time and the periods for which it was necessary for him to attend a plant in a rural area.  The water company employer engaged private investigators who hid themselves opposite the front door of the Claimant’s house and filmed all his comings and goings over the course of a week.  It was argued on his behalf that Article 8 was engaged and had been broken.  The judgment does not clearly separate the questions which arise under Article 8(1) from those which arise under Article 8(2) but so far as Article 8(1) is concerned Lord Johnston quoted with apparent acceptance what the Tribunal had said as to the surveillance at paragraph 4:

“The surveillance was carried out from an area on the opposite of the public road to the Applicant’s house.  What was observed by the investigators could have been observed by any member of the public using the public road.  Miailhe v France No. 2  [1997] 23 EHRR 491 supports the view that where the authority of the subject of the video evidence is undertaken in public view he or she may have no reasonable expectation of privacy…”

20.         At paragraph 13 Lord Johnston dealt with an argument derived from the case of Martin v McGuiness [2003] SCLR 548, a decision of the Outer House of the Court of Session, in which Lord Bonomy had observed that one’s private life can be put in issue by the very person who subsequently asserts that particular behaviour in relation to it is in breach of the Convention.  That was a case in which the pursuer had claimed damages in respect to injuries he alleged were caused to him and he could not, held Lord Bonomy, complain that covert surveillance was carried out on him subsequently in respect of those contentions.  Lord Johnston observed at paragraph 13 of McGowan:

“We take a similar approach in the present case.  It has to be borne in mind that the Respondents are a public corporation and they were investigating what was effectively criminal activity in the sense of fraudulent timesheets.  They did consider how best to deal with the matter, particularly with regard to inserting cameras in the workplace, but concluded that such would be impractical and ineffective […] The aim of the surveillance was to see or quantify the number of times the Appellant left the house to go to the process plant which would plainly bear upon the accuracy or otherwise of the subsequently submitted timesheets because it went to the heart of the investigation that the employer was bound to carry it out to protect the assets of the company.  The position is, therefore, that by alleged conduct on the part of the Appellant, namely the issue of false timesheets, the Respondent is forced into action to investigate the matter.  It is not a case where surveillance was simply undertaken for external or whimsical reasons.  In our view it goes to the essence of the obligations and indeed rights of the employer to protect their assets.  Looking at the matter this way, it therefore seems to us that it is not disproportionate and accordingly the findings of the Tribunal that the Article was not breached can be supported on this basis.  It has to be borne in mind that the suspicions of the employer were found to be established and the subsequent disciplinary process which is not challenged as a matter of fairness resulted in the Appellant being dismissed on grounds of dishonesty a very important aspect of the case.”

21.         Mr Cohen relied also upon the words of Mummery LJ in X v Y (in respect of the applicant’s commission of an act of gross indecency at a public toilet for which he was given a caution) at paragraph 52:

22.         It may rightly be said that any criminal act involves the public; that is why such acts are, with only rare exceptions, prosecuted in the name of the Crown acting, as the Crown does, on behalf of the public; the offence is against the public and the public have an interest in it.  In principle, therefore, a crime invites publicity and cannot legitimately demand privacy.

23.         We accept the submissions made to us by Mr Cohen.  For the reasons he gives and we have set out above we do not accept that here there was any breach of Article 8(1) so as to require the Tribunal to consider the requirements of 8(2) at all.  If, however, the Tribunal had done so it would have been bound to consider the legitimate aim which the Council claimed to have.  Here one of two such aims might have been identified.  The first was the prevention of crime, the second the protection of the rights and freedoms of others, the “others” here being the employers whose money was at stake and who had contractual rights in agreement with the Claimant that he would behave in a way in which as it happened he did not.  Whether those rights are regarded as such contractual rights or whether classed as coming under Article 1 protocol 1 (insofar as the Claimant was claiming money from an employer to which he had no right in contract and was therefore depriving his employer of it) or whether looked at as a matter of preventing crime it seems to us that there was an interference which could be justified.

24.         The Tribunal did not clearly identify its approach to this aspect of Article 8, save to say that the Council’s interference with the right was unnecessary and disproportionate.  This approach is criticised by Mr Cohen.  He submits the only requirement in the wording of Article 8(2) is that the interference be necessary.  He is right as a matter of language, but the application of Article 8(2), as recognised by the case law, has always involved not only the concept of the action being necessary in support of a legitimate aim, that being one of those specifically identified in Article 8(2), but no more than is necessary, i.e. proportionate to the achievement of that objective.  Here if the Tribunal had chosen to analyse the question it would have been bound to consider whether the action was no more than necessary in support of the Council’s objective.  But it must be said that would have been looking at the breach of Article 8 or the lack of justification for it out of context.  The context is this: first an Employment Tribunal cannot adjudicate upon any freestanding claim of a breach of Article 8.  Second, as made abundantly clear in X v Y the central question for its determination is that posed by section 98 of the Employment Rights Act 1996.  That requires the employer to show the reason for dismissal (section 98(1)) and then in words which are familiar but which it is worth repeating in the present circumstances:

25.         Thus the statutory question to be asked is whether the employer’s actions in treating the reason, here misconduct by taking time off from work during the working day and claiming pay for it, was a sufficient reason for dismissing him.  Though in a conduct case that may usually (see Foley v The Post Office) involve asking not only whether there is a genuine belief, but reasonable grounds for it based upon a reasonable investigation, the reasonableness of the investigation is to be seen by an Employment Tribunal within that context.  It is whether the investigation leads and lends proper weight to the reasons which inform the belief.  There is no separate freestanding right to hold a dismissal unfair because an Employment Tribunal has a criticism of the way in which or a distaste for the way in which an employer has behaved.  It is not evaluating the employer’s conduct in a vacuum.  It is asking the question in the context of the employer’s decision to dismiss.  However reprehensible an employer’s behaviour may be in moral or social terms, it is only the extent to which that impacts on the fairness of the dismissal which is relevant to the Tribunal’s decision.

26.         What is reasonable or unreasonable must have that focus.  The decision which is to be held reasonable or unreasonable is that of dismissal.  Accordingly, it is only if the faults in the investigation are relevant to the dismissal that it is likely to be held unreasonable.  As Mr Cohen put it, to hold as the Tribunal did here that the behaviour of the employer was disproportionate because it did not need to rely upon the surveillance in addition to the oral evidence it already had says nothing nor could it say anything about the reasonableness of forming a view upon the material available that the employee was guilty.  Further, it is never likely, if ever it could be, that an investigation will be held unreasonable because it is too thorough - at least without the nature of the investigation having in some other way made the dismissal of the employee unfair.  If what was unfair here about what the employer did was taking videos of him in public, and it had nothing to do with the dismissal because the dismissal was already sufficiently evidenced, then that would be no basis for holding the dismissal unfair since it would not be relevant to the dismissal itself, even although in this separate respect the employer might not have behaved entirely to the Tribunal’s liking.

27.         The second head upon which Mr Cohen addressed his submissions was that in paragraph 102 the Tribunal held that what was unfair was that the Council was inexcusably ignorant of its obligations under the DPA.  However, he submits, it had no obligations under the DPA which were infringed.  The Employment Practices Data Protection Code is expressly guidance.  No statutory provision requires it to be paid regard to.  It is not a statutory code. Within its own terms it says that the basic legal requirement on each employer is to comply with the Act itself.  The code is designed to help, although there may be alternative ways of meeting its requirements.  It says explicitly that it does not impose new legal obligations; it is prepared under section 51(2) of the Data Protection Act 1988 as part of the Commissioner’s duty to disseminate information about good practice as he considers expedient.

28.         The Tribunal here were thus taking account of obligations which the employer simply did not have.  Secondly, it was examining matters through what Mr Cohen described as the wrong end of the telescope.  The Code of Guidance would be of no consequence unless and until the Tribunal had come to a conclusion that there had been wrongdoing here.

29.         The wording of section 102, we would observe, does not tie the Council’s failure as found by the Tribunal to any particular way in which the employer behaved unreasonably toward the Claimant in the process of dismissal.  Its ignorance of the Code might be lamentable but the Tribunal goes on in the last few words of the paragraph to say that that ignorance would be such that the result would be that its investigation could no longer be considered reasonable; it does not say why.  It is not obvious to see why ignorance of a code which the employer was not bound in law to have regard to in any event would render an investigation into the wrongdoing of the Claimant unreasonable when it would otherwise have been reasonable.  It is not clear that it would lead the employer to do anything which made the investigation unreasonable within the meaning of section 98(4) ERA.

30.         In short, we consider that the Tribunal in criticising the employer for covertly filming the Claimant was not dealing with any matter relevant to the fairness of the dismissal for the reason which had been established.

31.         In the course of discussion with Mr Cohen we invited him to tell us whether there was any jurisprudence deriving from those personal injury cases considering the long standing practice of surveillance carried out by private investigators of those making claims.  The reference by Lord Johnston in McGowan to the decision of Lord Bonomy appears to relate to one such case.  Mr Cohen was not able to identify, he told us, any authority where filming of such an individual had been held to be in breach of Article 8 or the Human Rights Act where that filming had been conducted in a public place and there had been no alleged breach of the Regulation of Investigatory Powers Act.  Both those criteria are satisfied in the present case.

32.         Although inevitably every case involving fairness and an assessment of what is reasonable in the context of assessing the fairness of a dismissal must turn on its own facts, as must a proper appreciation of whether Article 8 is engaged and, if engaged, whether Article 8(2) has the effect that the interference is nonetheless necessary and proportionate, we are entirely satisfied that in this case the Tribunal was in error of law in the aspects identified for us by Mr Cohen.  The appeal will be allowed and a declaration substituted that Mr Gayle was not unfairly dismissed.