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The status of legal privilege in employment advice

News / / The status of legal privilege in employment advice

In X v Y Ltd [2018] the EAT considered whether email advice that a firm could use a redundancy exercise as a “cloak” to dismiss an employee provided sufficient evidence of iniquity to prevent legal professional privilege being claimed over its contents.

Facts

X was employed by Y Ltd as a lawyer from 30 January 1990 until his dismissal on 31 January 2017. During his employment X had Type 2 Diabetes and Obstructive Sleep Apnoea.

From 2011 there were concerns about X’s performance. X submitted a claim to the Employment Tribunal (ET) on 14 August 2015 and raised a grievance on 2 January 2016, asserting he had experienced disability discrimination.

In April 2016 Y Ltd announced a program of voluntary redundancy and X was placed in a "redundancy consultation process".

In May 2016, in a pub on Fleet Street often frequented by lawyers, X overheard one woman tell another that she was dealing with a disability discrimination complaint by a senior lawyer at Y Ltd, and that there was a good opportunity to manage X out by severance or redundancy as there was a big reorganisation underway. This conversation was the subject of legal professional privilege.

The conversation allowed X to interpret a print out of an email leaked to him in October 2016 sent by a member of Y Ltd’s legal department to a solicitor seconded to Y Ltd. The email marked "Legally Privileged and Confidential" was sent on 29 April 2016 and contained advice on how to commit unlawful victimisation by using the redundancy as a cloak to dismiss the Claimant. The contents of the email was the subject of legal professional privilege.

Shortly after, Y Ltd terminated X’s employment by reason of redundancy.

X subsequently submitted a second claim (the case in question) to the ET in March 2017 alleging further disability discrimination, victimisation and unfair dismissal. X sought to rely on the conversation and the email on the basis that it was not protected by privilege because it fell foul of the iniquity principle, i.e. something of underhand nature which is entirely contrary to public policy.

The Employment Tribunal

The Employment Judge (EJ) held that the email advice was aimed at avoiding rather than evading possible legal action, accordingly legal advice privilege applied and was not lost by reason of the "iniquity" principle. On that basis, the EJ granted the application of Y Ltd to strike out the corresponding paragraphs in the claim form.

The Employment Appeal Tribunal

The judge said legal advice privilege would have applied to the email had it gone no further than “you may select the Claimant, an employee with a disability, for redundancy but you run the risk of a claim by him.” Instead, the email recorded advice on how to cloak under the guise of redundancy X’s dismissal for making complaints of disability discrimination and asking for reasonable adjustments.

Mrs Justice Slade said the email did not record any advice on neutral selection criteria for redundancy. Rather, it concentrated exclusively on how the redundancy could be used to get rid of the allegations of discrimination and of underperformance which X stated were related to his disability and Y Ltd’s failure to make reasonable adjustments. To preserve privilege in the email would have been to withhold important evidence of discrimination and victimisation.

For the avoidance of doubt, the judge said that whilst it was of significantly lesser importance, legal advice privilege could not be claimed in respect of the overheard conversation in the pub.

Accordingly, the decision of the EJ was set aside.

In its judgment, the EAT gave the following as examples of iniquity:

>  Advising that a certain course of action runs a risk of being held unlawful would not be iniquitous.

>  Advising on certain course of action, which may be unlawful, could be iniquitous.

>  Advising on how to commit a fraud or breach a fiduciary duty would ‘clearly’ be an iniquity.

>  Advising termination which would be a breach of a notice provision in an employee’s contract ‘may well not be’ iniquitous.

>  Advising to commit an ‘unconscionable’ tort of discrimination, could be iniquitous.

Comment

In light of this ruling, lawyers should frame written legal advice carefully, particularly where it concerns the ability to dismiss an employee where there are allegations of discrimination.

Francesca Jus-Burke

Francesca Jus-Burke Senior Associate

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