Employee privacy

A recent European Court of Human Rights (ECHR) case [1] has attracted much publicity in the UK press as giving employers the green light to read employees’ private emails. This is wrong. The decision actually confirms that employers may only review employees’ e-mails in limited circumstances.

Background

Mr Barbulescu was employed as an engineer in charge of sales. His employer had a strict policy of not permitting private use by employees of its computer and telecommunications systems. Mr Barbulescu was asked by his employer to set up a Yahoo Messenger account, so he could communicate with customers.

The employer notified Mr Barbulescu that it had been monitoring his account and it believed he had been using it for private communications. Mr Barbulescu denied this, and the employer presented him with a 45 page transcript of all his Yahoo Messenger communications, including private communications with his fiancée and brother. Mr Barbulescu was dismissed for breaching the employer’s telecommunications policy.

Mr Barbulescu subsequently brought employment claims in the Romanian courts alleging that his dismissal was void since the employer had breached his right to privacy by accessing his private communications. Mr Barbulescu was unsuccessful before the Romanian courts, but the case was referred to the ECHR. The argument was that Romania had failed to protect his Article 8 right to respect for his private and family life.

The ECHR’s decision

The ECHR confirmed that Article 8 protects employees who use their employer’s telecommunications systems for private purposes. In other words, employees have a reasonable expectation of privacy at work. Nonetheless, this right is not absolute. The question in this case was whether Romania had struck the right balance between protecting the right of Mr Barbulescu to privacy at work with that of his employer to manage its resources effectively.

The ECHR found against Mr Barbulescu in this regard. It noted that:

  • The employer had a clear policy regarding the private use of the employer’s telecommunications systems;
  • It was reasonable for the employer to check its employees were working during office hours;
  • Monitoring was the only practical way to check the computers were being used for work-related purposes;
  • When the employer accessed the Yahoo Messenger account, it “believed” it would only contain work-related messages, because the account was set up for client communications; and
  • The employer had not reviewed any other documents or data on his computer.

What does this mean for employers in the UK?

Contrary to some of the more lurid headlines in the press, this case does not mean employers have an unrestricted right to read their employees’ private emails. Instead, the decision clarifies that employees do have a right of privacy at work, subject to limited exceptions, and any monitoring must be a proportionate response to the issues involved.

The decision also reiterates the importance of issuing clear guidelines to employees around internet usage and monitoring. The ECHR focused on the fact that the employer had a specific policy, which banned the use of work computers for personal purposes.  This is unusual – the reality is that few workplaces ban all personal use of computers, email accounts etc.  The ECHR also placed importance on the fact that the employer had accessed the Yahoo Messenger account in the belief that it contained only work-related messages.  This type of access was, according to the ECHR, reasonable and not excessive.  This is surprising when you consider the fact that the employer allowed the private message transcripts into the hands of Mr Barbulescu’s colleagues, who then discussed them at work.  The ECHR did not mention this. Had this been a Data Protection Directive complaint to the Court of Justice of the European Union (CJEU), the CJEU would likely have said the disclosure breached data protection principles, including individual privacy rights.

Important changes to employment rates

1. National Living Wage

The NLW will take effect from 1 April 2016 and will apply to all workers aged 25 and over. The initial rate is set at £7.20 (50p above the current National Minimum Wage (‘NMW’) rate of £6.70 for those aged 21 and over). The current NMW rates applicable to those under the age of 25 will continue to apply and will be reviewed in October 2016.

In addition to this change, financial penalties payable by employers who underpay the NMW will increase from 100% to 200% of the underpayment due to each worker from 1 April 2016. The current maximum penalty of £20,000 per worker, remains the same.

If employers have not already done so, they must review worker pay rates and adjust accordingly to meet these new legal minimums. Commercially, a decision will also need to be made as to whether to just increase pay for those aged 25 or over or for younger workers as well.

2. Compensation & Redundancy Caps

In respect of dismissals made on or after 6 April 2016, there will be increased compensation rates for employment tribunal claims. The maximum compensatory award for unfair dismissal will increase from £78,335 to £78,962. Dismissals for whistleblowing, unlawful discrimination and certain health and safety reasons remain uncapped. There will also be an increase to the minimum basic award for some unfair dismissals from £14,250 to £14,370.

Redundancy pay will also increase with the statutory cap on a worker’s weekly pay changing from £475 to £479. As with the basic award for unfair dismissal which is calculated on the same basis, the maximum overall payment will increase from £14,250 to £14,370.

3. Not all change

Whilst this year will see an increase to a number of rates, the weekly rate of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay will stay the same for the 2016-2017 tax year. Although the general position is that these rates increase each year, the fall of 0.1% in the Consumer Price Index means that the current rates of £139.58 per week will be frozen.  Statutory sick pay is also frozen at £88.45 per week.

Salary sacrifice scheme

During ordinary maternity leave (which is the first 26 weeks of leave) and additional maternity leave (the further period of 26 weeks), an employee is entitled to all their usual terms and conditions of employment, including benefits, save for those terms which relate to “remuneration”, which is defined as wages or salary.

Unless an employer provides for something more favourable, an eligible employee’s remuneration is decreased to the statutory amounts, which are:

  • First six weeks: the “earnings-related rate” (90% of the employee’s “normal weekly earnings”) or the “prescribed rate” (currently £139.58) whichever is higher;
  • Following 33 weeks: the prescribed rate or the earnings-related rate, whichever is lower
  • Remaining 13 weeks: unpaid

Childcare vouchers

Many employers make childcare vouchers schemes available to their workforce, usually by way of salary sacrifice. Due to the significant tax savings, these schemes prove popular with employers and employees.

However, how should childcare vouchers be treated during maternity leave when there is no salary to sacrifice? Should they be treated as “remuneration” and therefore suspended, or are they a non-cash benefit, which would need to continue?

Following guidance from HMRC first published in 2008, the general consensus was that these vouchers fell into the latter category and so employers needed to keep paying them during maternity leave.  But, this came at an additional cost to the employer; as it is not possible to make deductions from any statutory pay entitlement, this meant that employers had to cover the cost of the childcare vouchers during maternity leave as they were unable to make the equivalent deduction from the employee’s wages as they would have prior to any period of maternity leave.

The EAT decision

In the recent case of Peninsula Business Services v Donaldson, Ms Donaldson claimed it was discriminatory to suspend these vouchers during her maternity leave.  At first instance, the Tribunal agreed.  However, Peninsula Business Services appealed this decision.  The EAT overturned the Tribunal’s decision, saying that childcare vouchers should be classed as “remuneration”.  It follows that they do not have to be provided during maternity leave.

The EAT said that childcare vouchers weren’t really a salary “sacrifice” as such, rather a diversion of salary to a third party and therefore should be considered to be remuneration.  Otherwise, said the EAT, the employee is getting a windfall at the expense of the employer, which presumably was not the intention of Parliament.