Secret recording of conversations is not necessarily gross misconduct

Background

An employee brought a claim against her employer in an Employment Tribunal (“ET”) for, among other things, unfair dismissal. It emerged during the ET process that the employee had secretly recorded a particular meeting with HR.

The ET upheld a number of the employee’s claims but reduced her compensatory award by 10% because of the covert recording.

The ET’s decision was appealed to the Employment Appeal Tribunal (“EAT”) on a number of grounds. One of the employer’s arguments was that secretly recording meetings necessarily undermines all trust and confidence in the employment relationship. On this basis, the employee’s compensatory award should have been reduced to nil to reflect the fact that the employer would have dismissed the employee for gross misconduct if it had known about the covert recording at the time. It was the EAT’s commentary on this issue that was of particular note.

Covert recordings

The EAT found that the covert recording of a meeting does not necessarily always undermine trust and confidence between the employer and employee to the extent that the employer can dismiss the employee for gross misconduct.  It set out a number of factors which should be taken into account by an ET when considering this:

• The purpose of the recording – Was the employee’s intention to entrap the employer or to steer them into saying something to their disadvantage? Or was their intention simply to make a record of the meeting or to protect them against the risk of being misrepresented at a later date? The EAT noted that, in the past, it used to be very difficult to secretly record a meeting and, therefore, an intention to entrap the employer could be easily inferred. Nowadays, however, employees have recording devices at their fingertips (in their phones) and therefore, the same inference cannot be made.
• Blameworthiness of the employee – Did the employer warn the employee against taking any recordings or has the employee lied about taking a recording? Or is the employee simply worried and upset and has not even thought about the consequences of making such a recording?
• The nature of the recording – Does the recording concern a meeting of which a record would normally be taken? Or does it concern a meeting where highly confidential business or personal information relating to the employer or another employee is discussed?
• Attitude of the employer – Is covert recording expressly included as an act of gross misconduct in the employer’s disciplinary procedure?

The ET was entitled to find that there was no gross misconduct in this case. However, importantly the EAT said that it is good employment practice for an employee to say if they intend to record a meeting, except in the most exceptional circumstances, and it will generally amount to misconduct  not to do so.

Reduction of awards

The EAT also considered whether the ET correctly applied the “Polkey” principle (named after the case in which the principle was established) in determining whether and to what extent the claimant’s award for unfair dismissal should be reduced.

The Polkey principle allows the ET to reduce the amount of a successful claimant’s unfair dismissal award to reflect the chances of the claimant having been dismissed anyway if the employer had acted fairly. It can apply to situations where an employee committed misconduct during their employment but the employer did not know of that misconduct before dismissal.

The EAT explained that, when applying the Polkey principle, the ET must assess what this particular employer would have done in respect of this particular employee, if had acted fairly.  It is not looking at a hypothetical fair employer, but at this actual employer. Some employers may attach particular importance to a standard of conduct and inform their employees accordingly, where other employers may attach much less importance to the same conduct and condone it or treat it leniently. However, the ET must apply its own assessment of what is fair, and not that of the employer. There are both subjective and objective elements to the Polkey principle.

Takeaways

• Generally, secret recordings made by an employee will amount to misconduct and therefore may be the subject of disciplinary action.
• However, covert recordings of meetings will not necessarily always amount to gross misconduct and it will depend on the specific circumstances of the case.
• Employers should clearly state in their disciplinary policy that secretly recording colleagues, for whatever reason, is an act of gross misconduct and is not tolerated. In this case, the making of a covert recording was not set out specifically in the employer’s disciplinary policy as amounting to gross misconduct; and the employer had not, even at the date of the remedy hearing, amended its policy in light of the ET proceedings. This finding was an important factor in the decision to reduce the claimant’s award by just 10%.

Phoenix House Ltd v Stockman – judgment available here