breach of contract contributory fault Employment Appeal Tribunal procedure unfair dismissal

Does disclosing a senior employee’s salary amount to gross misconduct?

No matter how much employers might wish that it was not the case, even if they are meant to be confidential and not part of a published pay scale, employees tend to find out what other employees are earning. If there are discrepancies, real or perceived, this can lead to friction. If there is a pattern, such as a difference based on gender, employment tribunal claims may follow.

In a recent Employment Appeal Tribunal case, Jagex Limited v McCambridge, Mr McCambridge was summarily dismissed after finding a document left on a shared printer which included details of a senior employee’s salary. He shared that information with some other employees. Although he did not share the information widely, unsurprisingly, word got around and this was embarrassing for the employer.

Mr McCambridge had six years of blemish free employment with the Company prior to the incident. The Company, which developed and published online computer games, had about 320 employees at the time and Mr McCambridge led a team of four in the role of lead concept artist.

The document that he found on the printer was a visa application for the mother-in-law of Mr Muddasir, Senior Vice President and Head of Corporate Strategy. The document included details of Mr Mudassir’s salary. There had been some disquiet in the Company concerning pay levels for developers when compared with executives. There were no contractual provisions which prevented discussions between employees concerning pay, but the salaries of senior and executive employees were not widely known.

Mr McCambridge left the document where uncollected documents were usually left, where it remained uncollected. He mentioned it to another employee. In the meantime, word spread about the disclosure and by lunchtime some employees were playing a game – “guess the pay of the executive”. When he saw that the document was still there the following morning he put it in a confidential waste bin. He also mentioned it to a couple of other employees.

At 10:00 on the same day he was called to a meeting in the presence of HR concerning a potential disciplinary matter. In the course of the meeting it was clear that Mr McCambridge could not see what all the fuss was about and he did not regard the document as confidential. Nonetheless he was called to a disciplinary meeting on a charge of gross misconduct based on “unauthorised disclosure or misuse of confidential information”. He apologised and said that he did not think that what he had done was that important, but he regretted revealing the information to a couple of employees. The following day he was summarily dismissed for gross misconduct. The dismissal letter noted that Mr McCambridge appeared not to understand the severity of the incident.

An appeal against the dismissal was unsuccessful and Mr McCambridge commenced employment tribunal proceedings claiming unfair and wrongful dismissal. Both claims succeeded and the Tribunal determined that there should be no deductions for contributory fault or on “Polkey grounds” (i.e. that if a fair procedure had been followed would that have led to dismissal and, if so, what was the percentage chance). In essence, the Tribunal concluded that although a conduct issue had been identified, there was not a reasonably held belief in the misconduct of the employee because the decision taker had approached the matter with a closed mind (he was also the investigating officer), he had not considered whether the behaviour amounted to a breach of any express contractual terms and as a result of numerous procedural failings. The Tribunal was strident in its determination of the key issue:

“[the employer] …wanted to make an example of the Claimant and reacted in an extraordinarily heavy-handed manner……No reasonable employer would class discussion of a colleague’s salary internally as gross misconduct. The Claimant did not breach any policies in obtaining that information and whilst it was an error of judgement to share information left lying around no reasonable employer would say that this type of disclosure would be gross misconduct.”

paragraph 24 of the EAT judgment

The Employment Appeal Tribunal agreed with the Tribunal that there was no gross misconduct under the terms of the contract and that there should not be a “Polkey” reduction. However, the Tribunal had misdirected itself on the issue of contributory fault. Even if there was no gross misconduct, the Tribunal should nonetheless have considered whether Mr McCambridge’s conduct was blameworthy or culpable and, if so, what reduction to his award should be applied. The matter was remitted to the Tribunal for further consideration accordingly.

In this case the employer had fairly extensive paperwork covering confidential information, confidential material and misconduct. However, it was insufficient to cover the issue at hand. Of particular note is how much more important the disclosure was from the employer’s perspective than that of the employee.

Of course, it is impossible to draw up contractual terms and employment procedures which will directly cover every potential scenario. However, perhaps the biggest mistake made by the employer in this case was to jump to the conclusion that what had happened amounted to gross misconduct. As ever, my recommendation is that professional advice should have been sought from the outset, i.e. before the initial meeting took place.