Human rights in the dock

Employment-related litigation has reached record levels, and new legislation to protect staff privacy could make the situation even worse.

In November 2000, Compel settled its legal dispute with the former staff of Chelmsford-based reseller Info'Products, who had been made redundant when Compel bought Info'Products in 1998. Although the terms of the settlement remain confidential, the joint unfair dismissal action between the ex-staff and Compel was long-running, involving about half of the 150 or so people who were made redundant.

Although the case with Compel concerned the amount of severance pay due to staff rather than anything else, there is concern in the channel about another vehicle for large numbers of employment tribunal cases: the burgeoning field of human rights law.

Last October, the Human Rights Act (HRA) of 1998 was finally enshrined in UK law. This means UK law now has to take into account fully the European Convention on Human Rights (ECHR), which guarantees the right to privacy and the right to freedom of expression.

Critics argue that the ECHR, which is now legally binding in the UK, represents a huge shift towards a more powerful judiciary.

The act states that UK legislation has to be interpreted subject to Convention rights, and that UK courts and tribunals - including employment tribunals - now have to give remedies for human rights violations.

The main issue, according to employment lawyers, is the area of privacy at work, and to what extent employers can monitor staff. For instance, should they be able to use hidden cameras in the stock room, monitor email and phone calls or carry out random searches of staff who have access to valuable kit. The debate about privacy at work also includes less common practices, such as random drink- and drug-testing of staff.

Surge in litigation

Many lawyers see the HRA as opening a potential floodgate of employment-related litigation, as ex-staff claim the actions of their former bosses breached their human rights. However, it is still not clear what the actual impact will be.

When it first became law, John Taylor, legal director at human resources consultancy First People, said: "There is no doubt there will be a surge in litigation, partly because some people have been hanging on, partly because there will be some collective actions, but also partly because if you are a gambling man, you might want to gamble on the HRA."

Lawyers warn that the channel needs to consider the possible implications of the Act, and look closely at the way that employment contracts are drafted and staff are overseen. The problem that dealers, and any other companies that conduct part or all of their business electronically have, is that when it comes to monitoring staff email, for example, there are conflicting legal messages.

"There are a number of different acts all sending contradictory signals," says David Knight, partner at Lochners Technology Solicitors. The problem, he says, is there are a number of different legislative positions being taken on privacy. The office of the Data Protection Registrar says businesses should ensure that staff have the privacy of unmonitored private email, in the same way that they would expect to have unmonitored personal phone calls.

Although staff can be guaranteed unmonitored private calls by the provision of a payphone, it is less clear how it would work with email. Speaking last year, assistant data protection registrar Phil Jones said: "If email eventually replaces voice as the main way of communicating, then staff would need confidential access to it."

Employers held liable

The problem is that a number of court rulings - most notably against insurer Norwich Union in 1997 - have held employers liable for defamatory staff emails, and said contracts can be made legally online. Businesses then obviously need to know what is going on, and what is being sent in their name.

If a member of staff can make a contract or commit libel by using email, then the business should have a right to oversee that. But the law is not so clear-cut. There is also the confusion surrounding the government's Regulation of Investigatory Powers Act, which gives law enforcers the right to monitor private networks if they think that a crime is being committed.

Lawyers say this puts the employer in a potentially impossible position. They could be punished for not acting to monitor staff, but fear they could also be punished for monitoring.

"The key point is that businesses must only monitor staff in so far as is necessary to run their business," says Knight. Staff have an 'expectation' of privacy, which means that they have the right to assume their calls and emails are not being monitored unless they are specifically told.

Knight says a clause should be added to employment contracts saying that the employer has the right to monitor staff 'in accordance with the law'.

Get the balance right

Research company IDC believes 80 per cent of companies will be monitoring their employees' online behaviour by the middle of next year, and that includes checking emails as well as Web surfing habits. The question of monitoring is one of finding the right balance.

This means, for example, that an employer could access a member of staff's email account if they were on holiday, to check on whether there were any urgent emails, but not to read their personal correspondence.

The employee has a legal right to trust and confidence, which could be damaged if he or she is monitored without being told. Email is a particularly tricky area as it is now seen by staff as a right, and private emails are regularly exchanged, inside and outside the office.

The Federation of Small Businesses (FSB) is also concerned about the HRA, and its possible impact on the number and balance of employment tribunals.

Claire Birkinshaw, legal information manager for Abbey Legal Protection, which runs the FSB members' legal helpline, says it is too early to see any impact, but this will change. "We do not have any case law yet," she says. "But there is a school of thought that this could have a big impact."

Public and private

Initially it will be public bodies that are on the receiving end of actions. Employees, and ex-employees, of public bodies can bring an action against their employer claiming they have breached their rights to privacy or freedom of expression. For private bodies, such as commercial companies, the employee cannot simply take the employer to court or tribunal just for an alleged breach of the ECHR.

As before, the aggrieved ex-staffer has to file a cause of action with the tribunal. This may be for constructive dismissal, where the allegation is that the worker was effectively forced to resign, or unfair dismissal.

But the ECHR means that any human rights breach can now be 'piggybacked' onto the initial claim, and that even if the plaintiff does not specifically bring the ECHR up, the tribunal has to consider it.

"The threat of breaching human rights law would bring with it all sorts of bad publicity," says David Knight. For this reason he says many businesses, particularly larger and well-known ones, will be keen to settle quietly rather than risk that publicity. "It will give the litigant more leverage," he says.

Some of the cases in the channel have shown that once one person starts making complaints, others come to light. The publicity of employment tribunal cases may encourage others who also feel aggrieved to come forward with a claim. Small businesses, which are likely to be less fearful of bad publicity, may be less concerned to settle a case quietly.

"Surveillance is the big area for potential litigation," warns Birkinshaw. "Employers must use monitoring of staff only where it is necessary for a specific purpose, not as a routine policy."

She says the Convention, and the way it is implemented, could throw up legal loopholes. For example, a member of staff caught pilfering on a hidden camera might be tempted to claim for unfair dismissal on the grounds that their privacy was being breached by the secret filming. It is not clear whether the claim would be taken seriously or thrown out.

Directors' cut

The Institute of Directors (IoD) is also concerned about the impact of the act on employment law. Ruth Lea, head of the IoD policy unit, claims the UK's 'compensation culture' is damaging the competitiveness of its businesses, and that the HRA has serious implications for the process of employment and dismissal in the UK.

At present the central concept in employment law is 'reasonableness'. The IoD fears the act may force the definition used in tribunals to be re-interpreted. This could widen the scope for taking an employer to an industrial tribunal.

According to the IoD, there has been a rise in the number of employment tribunals, with 161,230 claims in the year from February 1999 to January 2000, up from 113,636 in 1998. It says there are several reasons for the increase, including a more complex employment law which makes it harder for employers to keep track of what they should be doing.

It also says that UK legislation, which has reduced the qualifying period for protection from two years to one, and a number of high-profile cases which have "encouraged some employees and ex-employees to try their luck," may be to blame. It is also critical that costs tend to be awarded against the employer, even if they win the case. "This is rubbing salt into the wound", according to the IoD.

Union's model agreement

Not surprisingly, the leading white-collar trade union, Manufacturing, Science and Finance, takes a different view. It has provided a model digital facilities agreement, to which the employer and employee can subscribe.

The agreement states: "Employees are permitted to use the email service for non-business use during business hours to send and receive emails both internally and externally, provided it is not detrimental to their job responsibilities."

So employment tribunals are on the increase, and many employment lawyers will be licking their lips at the prospect of the HRA being implemented.

For resellers, and all those trying to run a business, it is a tightrope to walk. They must keep control of their business, but now more than ever they need to ensure that they do not infringe the rights of staff. The saving grace is that the ECHR acknowledges the right of employers to do what is necessary to run their businesses, as long as it is justified.

SUMMARY

• The Human Rights Act 1998 came into force in the UK in October 2000. Some lawyers suggest it could open the floodgates to claims and increase the number of employment tribunals, which is already rising.
• The main area of concern is employee privacy and to what extent businesses can monitor staff phone calls and emails. The problem for businesses is that they can be liable for email defamation by staff.
• Companies are advised to make sure that staff are informed of any monitoring, that monitoring is 'reasonable' and justifiable, and that contracts state that staff may be monitored.

COMPELLING CASE

The Compel case against about half of the axed Info'Products staff was just one of a number of employment disputes in the channel. Head-hunting of staff is a perennial problem, and led to one of the more unusual channel disputes.

In March 2000, reseller Ciscom was forced to pay TNS Distribution £47,000 in compensation, after head-hunting four of its staff.

Teddington-based Ciscom had at the time a clause in its terms and conditions that said it would pay the equivalent of six months' salary in the event of it head-hunting staff from companies that it did business with. In September 1998, two sales staff and two engineers left TNS and went to Ciscom.

TNS bought memory from Ciscom and so realised that it could make a claim, even though the staff had accepted the job offer from Ciscom before it started trading with TNS.

When the case came to court the judge found in favour of TNS, ruling that by the time the staff actually gave in their notice to TNS, it was trading with Ciscom. Ciscom subsequently changed its terms and conditions to drop the compensation clause, as a result of the court case.

KNOW YOUR HUMAN RIGHTS

• Article 4 Prohibition of slavery and forced labour. This raises issues about what hours and which days it is reasonable to ask staff to work.
• Article 8 Respect for private and family life. This raises the central question of whether staff can use email and phone for private communication.
• Article 9 Religion and beliefs. Can you ask staff to work on religious holidays?
• Article 11 Freedom of assembly and association. This raises issues about union recognition.
• Article 14 Prohibits discrimination. Tightens law on discrimination on grounds of race, gender or sexual orientation.

CONTACTS

Institute of Directors (020) 7839 1233
www.iod.co.uk
Lochners Technology Solicitors (01483) 414 588
www.lochners.co.uk
Manufacturing, Science and Finance union (020) 7717 4000
www.msf.co.uk
Compel (001) 800 266 7351
www.compel.net
Ciscom (001) 502 222 6001
www.ciscom.com
TNS (001) 408 378 8289
www.tns.com