Employment Law Coffee Break: Investigation reports and privilege, employment law reform and our latest GDPR for HR update

When will a grievance investigation report be privileged?

The Employment Appeal Tribunal (EAT) has recently considered whether the original of a grievance investigation report, that was subsequently changed on legal advice and by the investigator, had to be disclosed to the employee or whether it was subject to legal professional privilege or litigation privilege.

Legal professional privilege and litigation privilege

Legal professional privilege extends to all communications between a client and their legal adviser for the purpose of obtaining advice and applies whether there is litigation in prospect or not. Litigation privilege only applies to communications which, at their inception, come into existence with the dominant purpose of being used in aid of pending or contemplated litigation and can cover documents/communications (produced for the purposes of existing or contemplated litigation) between a lawyer and client, lawyer and third party and a client and a third party.

What happened?

Here, the employee raised a grievance under the employer's Dignity at Work and Study policy. The employer appointed an independent member of staff to investigate the grievance and produce a report. The employer's external legal advisors suggested a number of changes to the report and the investigator also made a number of changes before a final version of the report was lodged by the employer with the Employment Tribunal. It was clear from an annotation on the lodged version that it had been revised following legal advice.

The employee made an application for disclosure of the original unamended version of the report; this was resisted by the employer on the basis that comparison of the original with the amended version would tend to show the nature of legal advice received and as such the original version of the document should be treated as subject to legal advice privilege. The Employment Judge rejected that argument and made the order.

On appeal, the employer contended that while the original version of the document was not privileged at the point it was created, it retrospectively acquired legal advice and litigation privilege once the amended version of it was lodged because comparison of the two versions could allow conclusions to be drawn about the legal advice it had received.

While stating that the terms of any advice given by the solicitor about the original document and any amended version of the original document created for the purpose of the litigation would be privileged, the EAT held that the original unamended document was not. Privilege did not retrospectively apply, even if an incidental consequence of its disclosure and comparison with the disclosed final version might be to allow inferences to be drawn about any differences which there may be between the two versions. While "that [was] sufficient to dispose of the appeal", the EAT commented that in any case it found it difficult to understand how it would be possible, simply from a comparison exercise, to distinguish between changes made following legal advice and changes made by the investigator.

Practical considerations for employers

With the number of investigations undertaken by employers on the rise, it is important for employers to bear in mind that investigatory reports prepared by employees will not attract legal advice privilege and this cannot be applied retrospectively.

Where an investigation carries particular significance, employers should consider whether lawyers should form part of the investigation from the outset. Circulation of documents should be strictly limited to those that need to receive them. Distributing them beyond those seeking legal advice or those who are involved in the litigation, and seeking advice in respect of them, could jeopardise the privilege attaching to the particular communication.

Marking documents "privileged and confidential"' and "not for onward circulation" is good practice, but will not guarantee that privilege will not be lost.

Employment law reform: no-fault dismissal, IR35 and reporting requirements

Is no-fault dismissal on the cards?

While the announcement that the proposed removal of the additional rate of income tax (set out in the "mini-budget") was being reversed dominated headlines at the start of the week, this week has also seen reports in the Financial Times on proposals for labour reforms being considered by the Business Secretary, Jacob Rees-Mogg, including potentially introducing the concept of no-fault dismissal for those earning more than a certain threshold – possibly £100,000. Back in 2012 a call for evidence on similar proposals to introduce no-fault dismissal, this time in micro-businesses, was not well supported and was quietly pushed into the long grass. In last week's Coffee Break we looked at the Retained EU Law (Revocation and Reform) Bill which will mean that retained EU employment laws (such as working time and agency worker rights) will need to be "assimilated" into our own statute book and at which point it is possible that we may see some changes around these provisions.

IR35 reforms – what do they mean for your business?

We reported last week on the government's announcement in its mini-budget that the recent IR35 reforms would be reversed. Partner, Kevin Barrow, and Consultant, Frances Lewis, from our specialist Workforce Solutions team, will be reflecting on this announcement and discussing what risk management will still need to be in place to avoid other tax anti-avoidance regimes and what planning businesses should undertake now in our webinar on Tuesday 11 October 2022. Please do join us by registering here.  

Extending the exemption from reporting requirements

As part of its "growth" agenda, the government has announced plans "to release from reporting requirements and other regulations in the future" businesses with fewer than 500 employees (at present, regulatory exemptions are often granted for businesses with below 250 employees). The announcement states that the changed threshold will apply "to all new regulations under development as well as those under current and future review, including EU retained laws" and "the exemption will be applied in a proportionate way to ensure workers' rights and other standards will be protected, while at the same time reducing the burden for growing businesses".

We must wait and see how this change will impact employment regulations but potential changes could be made to the reporting threshold for gender pay gap reporting (the regulations were due to be reviewed earlier this year but there is no news on whether this has been completed). The announcement states that the government will also look at plans to consult in the future on potentially extending the threshold to businesses with 1,000 employees once the impact of the current extension is known.   

Our October 'GDPR for HR' update

In their latest GDPR for HR update, our GDPR for HR team bring you a snapshot of developments relating to privacy in the workplace. This month we look at GDPR in the gig economy, tips from the Information Commissioner's Office on Data Subject Access Requests and, with many staff now working for at least part of their time from locations outside their normal workplace, data protection issues around distance working.

If you would like to receive the newsletter directly or wish to discuss how we can support you on GDPR issues, please contact partner Olivia Sinfield.