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Case Law Update February 2018

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19/02/2018

The Employment Appeal Tribunal (EAT) confirms it is unlawful to discriminate because of a ‘perceived disability’ – The Chief Constable of Norfolk v Coffey UKEAT/0260/16

Did you know that an employer can directly discriminate against someone on the basis of a ‘disability’ that that person does not, in fact, have?

The EAT has confirmed that discrimination against an individual directly on the basis of their ‘perceived disability’ (i.e. where they did not in fact suffer from the disability that they were perceived to have) is unlawful under the Equality Act 2010.

We know that direct discrimination based on a wrong perception is well established for other protected characteristics such as sexual orientation (e.g. treating someone less favourably because they are wrongly perceived to be gay is still direct discrimination) but this decision provides welcome clarification that the same rules apply to direct disability discrimination.

Facts

Lisa Coffey was a police officer who suffered from hearing loss. Her hearing loss was just outside the usual criteria set for police recruitment but she had nevertheless been accepted to join the Wiltshire Constabulary.  Some years later, she applied for a transfer from the Wiltshire to the Norfolk Constabulary which required her to undergo a health assessment where her hearing was found to be below the required standard. The health assessment recommended that she undergo a further ‘at work’ test given that she had been able to work as an operational police office up to that point.  Norfolk Constabulary chose not to follow this advice and rejected her transfer request on the basis that she had hearing loss which could worsen over time meaning that she might have to be moved onto restricted duties in the future.

The Equality Act 2010 defines a ‘disability’ as a long-term impairment (likely to last for more than 12 months or a recurring condition) that has a substantial effect on the person’s ability to carry out normal day-to-day activities. Mrs Coffey’s hearing loss at the time of the medical assessment was not serious enough to satisfy this legal test because it did not have a substantial adverse effect on her ability to carry out normal day-to-day activities.  Nevertheless, she brought a direct disability discrimination claim arguing that she had been perceived to have a disability. Progressive medical conditions do meet the definition of disability under the Equality Act 2010 and Norfolk Constabulary clearly perceived that she had a progressive medical condition because that was the very reason it gave not to employ her.

The decision

The Employment Tribunal and the EAT upheld Mrs Coffey’s claim and confirmed that a perception of disability was sufficient basis for a direct discrimination claim.  Norfolk Constabulary had perceived that Mrs Coffey’s condition might deteriorate over time to become a disability.

The EAT said, “There would be a gap in the protection offered by equality law if an employer, wrongly perceiving that an employee’s impairment might well progress to the point where it affected his work substantially, could dismiss him in advance to avoid any duty to make allowances or adjustments”.

Walker Morris comment

This decision highlights that direct discrimination claims can be brought where the individual feels they have been discriminated against because of a perceived protected characteristic such as disability, sexual orientation or religious belief. Not all managers are aware of this particular aspect of discrimination law so it is important that anyone dealing with decisions about recruitment, transfer or promotion receives appropriate equality and diversity training covering this point. Equality and diversity training and sound procedures are the most effective way to guard against exposure to discrimination claims in relation to recruitment decisions.

Mrs Coffey would not have been successful if she had been rejected because of a perception of a medical condition which did not meet the definition of disability. For example, if the manager thought she suffered from hay fever. In cases where the medical condition might or might not meet the legal test of disability (such as anxiety and depression) the Tribunal would have to carefully examine the facts to determine whether the test is met.

Morrisons supermarket vicariously liable for disgruntled employee’s criminal data breach – Various claimants v Wm Morrisons Supermarket PLC [2017] EWHC3113 (QB)

The High Court has held that Wm Morrisons was liable for the deliberate data breach of a disgruntled ex-employee.

The employee in question had been employed by Morrisons as an internal auditor. He disclosed the payroll data of approximately 100,000 Morrisons employees over the internet after becoming aggrieved by his employer’s handling of a disciplinary investigation. He was prosecuted and sentenced to eight years in prison.

Around 5,500 of the 100,000 affected employees brought a claim against Morrisons for breach of the Data Protection Act 1998, misuse of private information and breach of confidence. Following the Court of Appeal ruling in the 2015 case of Vidal-Hall v Google damages for these claims can be awarded without proof of actual financial loss. It is only necessary for the individual to show that they have suffered distress.

The High Court found that there had been no breach of the Data Protection Act 1998 on Morrisons’ part. It went on to consider whether Morrisons was vicariously liable for the actions of the ex-employee even though there was no direct ‘fault’.  The High Court considered the arguments on both sides and ultimately concluded that Morrisons were vicariously liable because the auditor had been acting in the course of his employment.  It took the view that Morrisons had trusted him with the payroll data and it was his specific job to deal with that data and disclose it appropriately (i.e. to the Company’s auditors). Whilst it was true that the auditor had been acting ‘on a frolic of his own’ in disclosing the data there was, nevertheless, a ‘seamless and continuous thread’ linking his work to the disclosure.  In short, whilst his disclosure was clearly not authorised, it was related closely enough to the tasks that he was employed to perform.

This finding meant that Morrisons was vicariously (indirectly) liable to the affected employees. The Court did express some concern about the fact that the company was also one of the many victims of the crime and that the auditor had ‘benefited’ from his criminal action by achieving, through the Court’s finding against Morrisons, his ultimate objective of causing harm to the company.

Morrisons has confirmed that it will appeal the ruling. Any compensation for distress is likely to be no more than a few hundred pounds per employee but, given there are up to 100,000 potential claimants, the total cost could run into the millions.

Walker Morris comment

It is important to make clear that Morrisons had not committed an offence under the Data Protection Act 1998. It had fallen victim to a rogue employee and the disclosure had not been caused by its failure to comply with data protection rules.

The High Court’s findings related solely to the question of vicarious liability. The finding highlights that employers are potentially liable for the criminal acts of employees. It is impossible to extinguish this risk but there are steps that employers can take to minimise it.  Data protection procedures need to be rigorous (not least because of the forthcoming GDPR which will impose new obligations and increase potential fines. IT systems and controls should be in place to raise ‘red flags’ for any unusual behaviour such as an employee trying to email data to themselves or sending files over a certain size outside of the company.  Risk assessments might also include a consideration of whether data risks caused by the actions of rogue employees can be insured against. Please see our earlier briefing for more information

Contacts