Be Aware – May 2023

This month, the IGA Legal Team provides members with advice on what to do if a judge seems to be biased against you in an employment tribunal, issues around withdrawing an offer of employment, covert recordings in the workplace, and how to check and challenge your business rates valuation.

Bias in the Employment Tribunal

If you find yourself in an Employment Tribunal defending a claim and the Judge appears to be hostile to your case, it’s often the case that the word “bias” is mentioned.  For understandable reasons of judicial independence, it’s very hard however to claim that a Judge was biased and get the Judgment set-aside and the case considered by another Judge.

To show bias a Tribunal must have pre-determined a decision it was required to reach, and the test is whether a “fair minded observer” would consider there was a real danger of bias.

In an unusual decision (Rolec v Mrs J Georgiou) the Employment Appeal Tribunal (EAT) found that on the facts of this particular case, a Judge had indeed overstepped the line.

In the case the Claimant won the original Employment Tribunal and the Respondent employer appealed to the EAT arguing that the Judge’s conduct during the hearing had shown that he was biased. The Respondent asked for the case to be remitted to a different Tribunal.  The EAT went through the Grounds of Appeal and rejected most of the criticisms of the Judge (such as robust cross examination and other questioning) which fell within the legitimate remit of the Judge.

The EAT however found 3 particular areas merited specific criticism:-

1. The Judge had indicated a witness was in contempt of Court, when in fact there was an issue of over disclosure of notes.
2. There was a dismissive remark about the Respondent’s solicitor’s experience, made by the Judge.
3. Comments that the Respondent’s mitigation evidence was poor was made before the evidence had actually been heard by the Tribunal.

It was also relevant that the conduct of the Judge appeared to affect various parts of the hearing and not one specific aspect and, as such, (applying the objective observer test above) the EAT concluded that such an observer would conclude that the Judge had indeed taken a particular side.

As we said at the start of this article, arguing bias in an appeal is very difficult but this case does show that such an argument is not impossible and, should you as an employer find yourself in a Tribunal with a hostile Judge, it’s certainly worth taking detailed notes.

Withdrawing an offer of employment

“We made a verbal offer of employment, conditional on the individual satisfying certain pre-employment checks.  Can we withdraw that offer before the pre-employment checks have been completed on grounds that the role has been withdrawn for operational reasons?”

The legal consequences of withdrawing an offer of employment will generally depend on the specific circumstances of the offer and the reasons for withdrawing it. The primary issue is likely to be whether, as a result of the offer being made, a contract of employment has been formed.

An offer of employment can be made orally or in writing, although, obviously, where an offer is made orally there is a risk the parties don’t agree on what the precise terms of the offer are/not all the terms of the offer have been fully identified, and that the parties proceed on different understandings.

In the normal course, however, once an offer of employment has been accepted and any applicable conditions have been met, a binding contract of employment is formed.

If, after the contract has been formed the employer then changes their mind, they will be unable to withdraw the offer and will instead have to terminate the employment contract by giving the employee their contractual notice, whether or not the employee has started work.

In practice this would usually mean making the employee a payment in lieu of notice.

An employee will generally need to have at least two years’ continuous employment to qualify for unfair dismissal protection, which rules out an unfair dismissal claim for most newly-engaged employees in this situation (unless the reason for terminating the contract was discriminatory or automatically unfair, in which case no qualifying period for bringing a claim may be required).

Conditional offer

Usually where a conditional offer of employment is made in writing, the offer will be expressly stated to be ‘conditional on and subject to’ certain requirements being fulfilled.

It will be a question of fact in each case whether the offer of employment was conditional, and if so, whether the requirements listed in the conditions were fulfilled. As already mentioned, where the offer was made verbally it will be particularly important to establish the precise terms of the offer, and whether it was in fact ‘conditional on and subject to’ certain requirements being fulfilled.

Where a conditional offer of employment is made, a contract will not come into effect until the condition(s) have been met.

If the conditions have not been met, a prospective employer may be able to withdraw their offer without liability.

It may also be relevant to establish whether as part of the terms of the offer it was explicit that the employer would confirm the offer only once it was satisfied that the conditions had been fulfilled to its satisfaction.

Withdrawing an offer

Where an employer wishes to withdraw the offer of employment before certain pre-employment checks have been completed, i.e. effectively before it knows whether or not the individual will have fulfilled the conditions on which the offer was purportedly based, it will be necessary to establish whether or not:

• at the point the employer seeks to withdraw the offer, it is evident that a contract had already been formed (in which case, the employer will be in breach of contract if it proceeds to terminate the employment without complying with contractual notice provisions), and
• if the contract has not yet been formed, e.g. there has not been unconditional acceptance of the offer or conditions to which the offer was subject have not been satisfied, the employer may be able to withdraw the offer without liability.

Covert Recordings

“I held a disciplinary meeting with one of my employees last week and, having sent him the notes I made, he has now revealed that he covertly recorded the meeting and says that he contests my record of the meeting.  Is there anything I can do to stop this?”

Covert recording is an increasingly common phenomenon in the modern workplace.  The development of technology, in particular recording Apps on mobile phones, has meant that many employees now try to record meetings and then use that evidence against their employer if there is a dispute.

There are a few areas to consider in the above scenario:

1. Firstly, covert recording can be a serious disciplinary issue. It certainly has the potential to undermine trust and confidence and further, since the introduction of the GDPR, the unauthorised recording of another individual also causes data protection issues, given that the Manager who is taking the meeting has had his or her voice recorded without consent. Furthermore, there can be further problems with data security if the recording is then taken off site.
2. Employers are advised to make clear in disciplinary policies that covert recording is a serious disciplinary offence, and some employers may choose to include it as one of the examples of gross misconduct in their disciplinary procedures. Doing so will strengthen an employer’s hand if, as in the above scenario, the employee then covertly records meetings knowing that they are in breach of such a policy.
3. Employers should be aware however, that when matters end up in the Employment Tribunal, even if there are covert recordings, Tribunals will often choose to hear or see the transcript of the recording if the matters are broadly relevant to the matters before the Tribunal claim.

That won’t always be the case in litigation – employers can apply to have such information excluded and it can depend upon the purpose of the recording.  In a case this week, the Employment Appeal Tribunal has given a decision (Phoenix House v Stockman) noted that covert recording is usually a misconduct issue. It also noted the variety of purposes for making a covert recording, which are likely to be taken into account when considering whether the matter is misconduct and whether, if it ends up in the Employment Tribunal, covert recordings should be excluded.  The purposes of the recording can, for example, be anything from entrapment to an employee genuinely guarding against unfair or discriminatory treatment, having previously experienced the same.

What if an Employee asks to record the meeting?

Another scenario often faced by employers is where an employee asks if they can record the meeting in advance.  Whilst it is acceptable for an employer to have a policy that it is not allowed, given that a recording is a completely neutral record of the meeting, employees who are seeking to bring claims against the employer can try to draw an adverse inference from an employer’s refusal to have a meeting recorded.

To overcome this issue, some employers are introducing policies whereby the employer records the meeting and keeps the data secure at the Company premises and provides one copy to the employee. This means that both employer and employee have a neutral recording of the meeting, from which a transcript can be made if matters end up in a dispute.

Business Rates

Business rates are currently a fact of life and can represent a large percentage of regular business outgoings. Unfortunately, these have likely gone up from 1 April 2023. Here is what you need to know.

Background

All business properties have a ‘rateable value’ assigned to it by the Valuation Office Agency (VOA), who are part of HM Revenues and Customs. This value is then used by your local council to calculate how much business rates you should pay.

The VOA reassess all property values to reflect changes in the property market and ensure that the assessments remain accurate and up to date. The current rateable values are based on the 1 April 2021 valuation and have recently come into effect 1 April 2023.

How to check and challenge your business rates valuation.

When valuing your property, the VOA will have based their assessments on the assumptions regarding the properties use that they hold. It is important to check that these assumptions are accurate, and where possible correct them.

Incorrect assumptions can lead to you paying hundreds or thousands of extra pounds in business rates over the next 3 years.

There are generally two processes you can follow:-

• Check and challenge yourself using the Government service.
• Appoint a third-party agent to challenge on your behalf.

Check and challenge yourself.

We would encourage all members to at least check their business rates valuation account. The Government has set up an online process to allow businesses to check their rateable valuation and the assumptions upon which it is based. You are then able to either confirm if the details held are correct or challenge the rateable value if you think it is too high.

The Check and Challenge service provided by the Government is designed to be user friendly and the majority of businesses should be equipped to navigate this service and obtain any savings in full.

Further details can be found here.

Appoint a third-party agent.

We would advise against the use of a third-party agent. The majority of businesses should be equipped to navigate this service and obtain any savings in full without incurring the costs of a third-party agent.

That said, it is a business’s responsibility to correct any inaccuracies in the rateable valuation. Where a business is unable to check its valuation for any reason, appointing a third-party agent to do so on their behalf can obtain savings that would not otherwise have been given.

When appointed, a third-party agent acts on a business’s behalf to challenge any valuation with the VOA. This service can be provided either for an upfront fee, as a percentage of any savings obtained, or a combination of both upfront fees and a percentage of the savings made.

Significant caution should be exercised when appointing a third-party agent. Before appointing a third-party agent, members are strongly advised to review the terms and conditions being offered. Particular attention should be paid to :-

• the upfront fees being charged,
• the percentage of any savings that will become due, and
• the period for which these charges will be made.

It is important to note that in a business-to-business contract the law provides minimum protections well below those of a consumer contract. There is no general cooling off rights or protection against legal but bad deal. Once you have agreed to a set of terms and conditions it is very unlikely that you will be able to cancel them or change them.

Do not proceed unless you are 100% happy to be bound by the terms that are being offered.

Where a percentage of any savings are charged, members should expect the contracts to refer to ‘business rate/rateable periods’.  Before 2023 business rates were assessed every 5 years. From 2023 the plan is for them to be assessed every 3 years. If terms and conditions refer to multiple periods, then any payments may be due for 6 or more years. Where possible any contract should be limited to the current period only (2023-2026).

Members should be highly suspicious of any third-party agents, particularly any who cold call them.  RMI members have had significant issues at past valuations. There are unscrupulous agents who will either fail to undertake their duties with sufficient care or charge significant percentages of any savings obtained or make charges for an excessive period of time.

In Conclusion

In these times of high costs, any savings can be a lifeline. Your businesses rateable value is one area where it pays to ensure the information held is correct.

If you are concerned about the business rates further information can be found at the VOA and at your local council.

General Note

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in any of the situations above, contact us in 01788 225 908 at any stage for advice and assistance.