In the case of Phoenix House Limited v Stockman, the Employment Appeal Tribunal (EAT) considered whether an employee had committed misconduct during their employment, for covertly recording a meeting, and whether a reduction should be applied to the compensation awarded.
Ms Stockman was employed in the finance department at Phoenix House. Following a department restructure, her role was made redundant, but she successfully applied for another role within the department. After starting her new role, Ms Stockman raised a grievance alleging that the restructuring process had been biased and that the Director of Finance was treating her differently. An internal meeting was arranged to discuss Ms Stockton’s grievance, Ms Stockton was not invited to this meeting. Despite not being invited, Ms Stockman interrupted the meeting and demanded to know what was being discussed. She also refused to leave when she was asked to.
Later that day, Ms Stockman was invited to attend a meeting with HR which she secretly recorded. She was told that interrupting a meeting and failing to leave would be subject to disciplinary action. Ms Stockman raised another grievance against her manager alleging that she had not been provided with a safe place of work and had been unlawfully harassed by the Director of Finance. The complaint was that her manager had unlawfully harassed her and she could no longer work with him.
The disciplinary hearing (relating to her failure to leave the meeting) led to Ms Stockman being given a 12 month formal written warning, which she appealed. She was placed on authorised leave pending the outcome of the appeal. A mediation meeting was held in relation to the breakdown in the relationship between Ms Stockman and the Director of Finance, which was unsuccessful. Ms Stockman stated that she wished to return and put her grievance behind her. However, Phoenix House advised Ms Stockman that the relationship between her and her manager had broken down irretrievably and summarily dismissed her.
Employment Tribunal and Employment Appeal Tribunal
Ms Stockman issued proceedings in the Employment Tribunal during which it came to light that she had covertly recorded the meeting with HR. The Employment Tribunal found that Ms Stockman had been unfairly dismissed and reduced her compensatory award by 10% to reflect her conduct. Phoenix House argued it should be reduced by 100% in view of Ms Stockton covertly recording the meeting, which amounted to gross misconduct. The Employment Tribunal held that covert recording was not specifically set out in the charity’s disciplinary policy. It held that the recording had not been used to entrap the employer and could not therefore have been gross misconduct. Phoenix House appealed against this finding. It argued that if it had known about the recording it would have dismissed Ms Stockman for gross misconduct; accordingly her compensation should be reduced to nil.
The Employment Tribunal’s decision was upheld by the EAT. The EAT’s provided some helpful guidance on the subject of covert recording:
- It remains good practice for parties to communicate an intention to record a meeting (generally amounting to misconduct not to do so)
- The extent of the employee’s blameworthiness should be considered in determining gross misconduct
- It is still relatively rare for a covert recording to amount to gross misconduct
- It generally cannot be said that covertly recording a meeting necessarily undermines trust and confidence
- Recordings might take place for a number of reasons including keeping a record, protecting the employee from a risk of misrepresentation and enabling an employee to obtain legal advice
- Employers should consider all of the circumstances, including the employee’s reason for making a secret recording and any damage done to the employer.
The EAT guidance above is particularly helpful for employers whose employees are found to have covertly recorded an internal meeting. The guidance highlights that whilst every case will differ, if an employee is found to have covertly recorded an internal meeting and an employer proceeds to take disciplinary action against the employee for misconduct, this is likely to be considered a reasonable step if challenged at a later date. The case also serves as a reminder for organisations to carefully review their existing disciplinary policies. With the prevalence of smart phones, employees are now able to make a covert recording of internal meetings easily and quickly. Employers may wish to set clear rules relating to the recording of meetings. They may also wish to specify that such action may constitute gross misconduct and could result in summary dismissal.