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In its judgement in Zabelin -v- SPI Spirits and Shefler this month, the Employment Appeal Tribunal has offered a refresher course on some important questions around protected disclosures, contracting out of statutory rights and when the Acas Code applies.
The background facts are relatively simple. Zabelin worked for SPI which is owned by Mr Shefler. Like many other employers, SPI agreed a temporary pay cut with its employees in 2020 to mitigate the adverse impact of the pandemic. Like rather fewer of them, it then unilaterally extended that cut beyond the date agreed, provoking Zabelin into complaining about that breach of contract as it applied to him and others, a complaint reinforced by SPI’s simultaneous proposal to change his 2019 bonus provision retrospectively from something he had a reasonable chance of obtaining to something he didn’t. Zabelin said that this too was a breach of his contract and those of other staff, that this approach was causing great unease and damage to mental health among other SPI teams and offices, and that the whole exercise was being conducted without transparency or financial necessity, but simply to increase SPI’s profit. What must have been a less than amicable call between him and Shefler about all this ended abruptly when Zabelin was told that he really needn’t worry about any of it because he was fired.
The original Employment Tribunal concluded that even though Zabelin’s complaints were clearly motivated substantially by his own self-interest, his reference to concerns about the impact of SPI’s conduct on other group employees in the UK and overseas was enough to get over the public interest hurdle of a protected disclosure for whistleblowing purposes. From that it was a short step to the conclusion that Zabelin’s dismissal was in retaliation for that disclosure. As a result, he was automatically dismissed and his potential compensation therefore not subject to the ordinary dismissal cap. Section 123(1) ERA states that in an unfair dismissal case, “the amount of the compensation to be awarded should be such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal…”. It is not impossible for the application of the “just and equitable” factor to lead to an award below the amount of the complainant’s losses, for example through contributory fault, but here there was no such fault since the ET could obviously not blame Zabelin for making a protected disclosure.
So the ET looked at Zabelin’s losses and the horse and cart which SPI had driven through the Acas Code of Practice, added 20% for the latter and grossed up the lot, taking Zabelin’s compensation award to a not insubstantial £1,626,452.07. The two respondents appealed against that sum on two main grounds.
First, Zabelin’s contract included a term which stated that if he were dismissed, his maximum claim against SPI would be for a net £270,000, less than a third of the sum actually awarded. SPI said that this term was either binding on the ET direct, or should at least have been considered as part of its assessment of what level of compensation would have been just and equitable, with the clear intent that this would have led to a figure significantly below £1.6 million and closer to, oooh, £270,000, perhaps?
Second, SPI argued that the Acas Code did not apply, or at least not to all of Zabelin’s complaints, because he had not put them in writing. In its view, there had consequently been no grievance for the Code to apply to and therefore there should have been no 20% uplift.
Morally, the first point might be thought to have some merit. After all, Zabelin was legally trained, had negotiated his employment contract from a position of some bargaining strength and was assisted by professional legal advisors. The maximum sum he had agreed to was substantially greater than an ordinary wrongful and/or unfair dismissal claim would have brought him. This was not a case, heard the EAT, where a bus driver was given no option but to accept a clause limiting his entitlements on termination to a sum below that maximum, which Counsel for SPI fully accepted would not be binding.
The EAT considered that contractual clause to be a fairly overt attempt to require Zabelin to contract out of his statutory rights, I.e. the right to have one’s compensation assessed in line with the ordinary principles of section 123(1), and that it was therefore void under section 203 Employment Rights Act 1996 (the same section that makes ordinary termination agreements void unless they are recorded through Acas or a formal settlement agreement). Whether the contractual clause was a direct restriction or merely something for the ET to consider, SPI’s argument that it should had led Zabelin to receive a maximum £270,000 net was a faller at the section 203 fence. Therefore the moral position didn’t matter – no ordinary contract clause could pre-limit an employee’s statutory entitlement to appropriate compensation from the ET, whether bus driver or senior executive.
As to the grievance point, the EAT did confirm that the Acas Code would only apply if the grievance were put in writing. Here at least some of it had been and the EAT was not perturbed that this had then been fleshed out only orally – that was common in workplace grievances, where it would be unrealistic to expect the employee to produce a comprehensive written statement of his concerns first time out. The 20% bump therefore stood.
However, to be clear, this is absolutely not licence to employers to ignore complaints which are made orally, especially if they concern allegations of legal wrongdoing or harassment. Or indeed anything else, really – you might not be at risk of an Acas uplift if you don’t deal promptly with an oral grievance, but that won’t protect you from allegations of constructive dismissal, discrimination, or just being a really dire manager if you blank it for that reason. By all means ask that it be put in writing or whether the employee is actually asking you to do anything about it, but don’t ignore it. Keep in mind also that none of this means a protected disclosure for whistleblowing purposes also has to be in writing to be valid — it does not.
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