Good morning and welcome back to your weekly case law update. Last week we looked at race discrimination, this week we shall be looking at gross misconduct dismisssals.

Gross misconduct dismissals are the ultimate sanction, it is the HR equivalent of a judge putting the black cap on. The employee’s career is put to the sword, the contract of employment is terminated with immediate effect, the employee leaves without notice or payment in lieu, their reputation and employment record in tatters.

Today’s case poses the following questions:

1. Does disclosing another employee’s salary details amount to gross misconduct?

2. Does the disclosure breach the confidential information clause in the contract?

3.  Can a Polkey reduction be made if the conduct falls short of gross misconduct?

4.  Can a contributory fault deduction be made if the conduct falls short of gross misconduct?

Mr McCambridge worked for an online games business as a developer. The business employed over 300 employees and had a well resourced HR function. Within the business there was a certain amount of bad feeling amongst the developers who felt they were under-paid in comparison to senior managers.

Mr McCambridge found a visa application left uncollected on the communal printer for the mother-in-law of Mr Hamza Muddasir, Senior Vice President and Head of Corporate Strategy. It included details of Mr Muddasir’s salary.

Senior executive salaries were not common knowledge in the business. Mr McCambridge told a few colleagues of the salary and it quickly became a talking point amongst staff. In fact some staff played a game over lunch called “Guess the pay of the executive” where employee made guesses and were then told to go “higher” or “lower.”

The employer took disciplinary action and dismissed Mr McCambridge for gross misconduct. The investigating officer conducted the disciplinary hearing.

The employer relied on a confidential information clause in the employee’s contract and in particular the definition of confidential information was given as: “any trade secret, customer information, trading detail or other information relating to the Company’s business; goodwill, secrets or personnel.”

The employer’s disciplinary procedure had as an example of gross misconduct: unauthorised disclosure or misuse of confidential information.

The employee bought a claim of wrongful dismissal (a claim for notice) as well as unfair dismissal.

The claim was heard by EJS King (once of PJH Law) at Bury St Edmunds Employment Tribunal.

The Employment Tribunal found that the dismissal was wrongful, the conduct did not amount to gross misconduct and the employee was entitled to damages for loss of notice period. The Tribunal found the dismissal unfair, that there should be no reduction for contributory fault (as the conduct did not amount to gross misconduct), that there should be no Polkey reduction to reflect any chance that the employee could have been fairly dismissed (as absent gross misconduct, there could be no chance of a fair dismissal).

The Tribunal found as follows:

“The employer wanted to make an example of the Claimant and reacted in an extraordinarily heavy-handed manner…No reasonable employer would class discussion of a colleague’s salary internally as gross misconduct. The Claimant did not breach any policies in obtaining that information and whilst it was an error of judgement to share information left lying around no reasonable employer would say that this type of disclosure would be gross misconduct.”

The Employer appealed to the EAT on nine grounds, but only three grounds were permitted to go through to appeal. The grounds were:

1.  Whether the conduct amounted to gross misconduct under the contract?

2. Whether the Employment Tribunal erred in not making a Polkey      deduction?

3.  Whether the Employment Tribunal erred in not making a contributory fault deduction.

The EAT rejected all bar the third ground.

The EAT accepted that an employee’s salary did not constitute confidential salary for the purposes of the contract. The EAT pointed out that many Director’s salaries are a matter of public record in both the private and public sector.

The EAT concluded that no Polkey deduction was permissible. If the conduct was misconduct at best, rather than gross misconduct, no fair dismissal was possible. There were therefore no grounds for making a Polkey deduction.

Finally the EAT found that the Employment Tribunal had erred on contributory fault by making a finding of contributory fault condition on there being gross misconduct. The EAT stated the well known threshold of blameworthy or culpable conduct. Mr McCambridge’s conduct may have amounted to blameworthy and culpable conduct and that issue could be determined at the remedy hearing.

To answer today’s questions, the takeaway points are:

1.  Does disclosing another employee’s salary details amount to gross misconduct? Not necessarily, particularly where the employee held a junior role and had come across the information by chance.

2.  Does the disclosure breach the confidential information clause in the contract? No as Confidential Information within the contract had not been defined to include an employee’s salary.

3.  Can a Polkey deduction be made if the conduct falls short of gross misconduct? No not easily as there is no chance of a fair dismissal, unless the employee is already on a final written warning.

4.  Can a Contributory fault deduction be made if the conduct falls short of gross misconduct? Yes as the test for contributory fault is culpable or blameworthy conduct which could be misconduct rather than gross misconduct.