France: Le harcèlement sexuel susceptible d’être exclu en cas d’attitude ambigüe de la victime

Le harcèlement sexuel est défini, dans le Code du travail, par « des propos ou comportements à connotation sexuelle répétés qui soit portent atteinte à [la] dignité [du salarié] en raison de leur caractère dégradant ou humiliant, soit créent à son encontre une situation intimidante, hostile ou offensante ».

Le Code du travail prévoit également une assimilation aux faits constitutifs de harcèlement pour « toute forme de pression grave, même non répétée, exercée dans le but réel ou apparent d’obtenir un acte de nature sexuelle, que celui-ci soit recherché au profit de l’auteur des faits ou au profit d’un tiers ».

Pourtant, le 25 septembre 2019, la Cour de cassation n’a pas reconnu le caractère de harcèlement sexuel pour les agissements d’un responsable hiérarchique, qui avait régulièrement envoyé, et ce sur une période de temps notable (plusieurs années consécutives), des messages au contenu déplacé et pornographique à l’une de ses subordonnées, par l’intermédiaire de son téléphone professionnel.

Les faits avaient été relatés par une tierce personne, dans un courrier envoyé à la direction de l’entreprise. Sur la base de ceux-ci, l’employeur avait licencié le responsable pour faute grave, qualifiant ces faits de harcèlement sexuel.

Le salarié avait par la suite contesté son licenciement. A l’appui de sa réclamation, il indiquait qu’une relation de séduction s’était effectivement installée entre sa subordonnée et lui, mais que c’était elle qui avait été à l’initiative des échanges de SMS, et qu’elle adoptait à son égard une attitude provocante. Il niait toute forme de pression exercée sur sa subordonnée, et prétendait que la relation (uniquement par messages interposée) qu’il avait entretenue avec sa subordonnée relevait de sa vie privée et ne pouvait justifier son licenciement.

Les faits étaient incontestables, de multiples preuves et attestations soutenaient la réalité des messages échangés.

Cependant, la Cour d’appel, puis la Cour de cassation, ont été sensibles à l’argumentation du salarié. En effet, les juges ont pris en compte l’attitude de la subordonnée pour écarter le harcèlement sexuel. Celle-ci avait en effet répondu aux messages de son responsable hiérarchique, entretenant dans une certaine mesure la correspondance avec lui, et sans jamais lui demander de cesser l’envoi des messages. Plusieurs salariés attestaient par ailleurs du fait que celle-ci adoptait à son égard « une attitude très familière de séduction ».

Les juges ont par conséquent écarté toute pression grave ou toute situation intimidante, hostile ou offensante à l’égard de la salariée qui avait volontairement participé à un jeu de séduction réciproque, ce qui excluait que les faits reprochés au salarié puissent être qualifiés de harcèlement sexuel.

Par cet arrêt, la Haute juridiction permet de rappeler que le harcèlement doit être « subi ». Les juges de la Cour d’appel avaient d’ailleurs souligné que l’employeur n’établissait nullement que la salariée avait fait part de sa volonté de voir cesser ce jeu de séduction.

Si les juges ont considéré que les faits n’étaient pas constitutifs de harcèlement sexuel, ils n’ont pour autant pas exonéré le salarié de toute responsabilité.

En effet, le licenciement (initialement prononcé pour faute grave par l’employeur) a été requalifié en licenciement pour cause réelle et sérieuse. La Cour d’appel a en effet considéré, soutenue par la Cour de cassation, que le salarié, exerçant les fonctions de responsable d’exploitation d’une entreprise comptant plus de cent personnes, avait adopté un comportement lui faisant perdre toute autorité et toute crédibilité dans l’exercice de sa fonction de direction et dès lors incompatible avec ses responsabilités.

France: Provocative acts do not necessarily fall within the scope of sexual harassment if the victim’s behaviour is ambiguous

The French employment Code defines sexual harassment as “repeated sexual comments or conduct that either violate the [employee’s] dignity because of their degrading or humiliating nature or create an intimidating, hostile or offensive situation against the employee“.

The French employment Code also assimilates to sexual harassment “any form of serious pressure, even non-repeated, exercised for the real or apparent purpose of obtaining an act of a sexual nature, whether it is sought for the benefit of the perpetrator or for the benefit of a third party“.

However, on 25 September 2019, the French Supreme Court (Cour de Cassation) did not acknowledge that a line manager, who had regularly sent, over a significant period of time (several consecutive years), messages with inappropriate and pornographic content to one of his subordinates, via his company smartphone, committed acts falling within the scope of sexual harassment.

The company had been informed of the facts by a letter sent to its management by a third party. On the basis of these, the employer dismissed the manager for serious misconduct (faute grave), qualifying his behavior towards his subordinate as sexual harassment.

The manager subsequently challenged his dismissal before the employment court. To support his claim, he indicated that a seductive relationship had developed between him and his subordinate, but that it was she who had initiated the SMS exchanges, and that she had adopted a provocative attitude towards him at work. He denied any form of pressure on his subordinate, and claimed that the relationship he had had with his subordinate was of a private nature and could not justify his dismissal.

The facts in this case were indisputable. Ample evidence of the existence of the exchanges, supported by testimony, proved the existence of the messages exchanged.

However, the Court of Appeal, and subsequently the French Supreme Court, were sensitive to the manager’s arguments. The judges took into account the subordinate’s attitude in order to refrain from qualifying the exchanges as falling within the offence of sexual harassment. The court explained its reasoning by pointing out that the subordinate had replied to the messages of her line manager, maintaining the correspondence with him to some extent, and never asking him to stop sending messages. Several employees also certified that she adopted “a very familiar attitude of seduction” towards him.

The judges therefore ruled out any serious pressure or any intimidating, hostile or offensive situation towards the subordinate who, according to them, had voluntarily participated in a game of mutual seduction. This meant that the acts alleged against the manager could not be qualified as sexual harassment.

By such decision, the Supreme Court recalled that harassment must be “suffered”. The judges of the court of appeal pointed out that the company did not provide any evidence that the subordinate had asked her manager to end such seduction game.

Even though in this case the court ruled out the existence of sexual harassment, the employee’s dismissal was still considered as valid.

French employment law makes an important distinction between “real and serious cause”, which justifies the dismissal of an employee but entitles the employee to a termination indemnity and certain other statutory payments, and dismissal for “serious misconduct”, which depending on the gravity of the alleged misconduct, justifies not only the dismissal in the first place but also the absence of some of these payments (in particular the termination indemnity and the notice period entitlement). In this case, although due to the lack of a finding of sexual harassment the court found that serious misconduct did not exist, the court still found that the behavior of the employee justified his dismissal for real and serious cause. The Court of appeal held, and the French Supreme Court affirmed, that the actions of the manager, who had a very senior role in a company employing more than one hundred employees, had adopted a course of behavior that caused him to lose all authority and credibility in the exercise of his management function and was therefore incompatible with his responsibilities.

Taking it a day at a time

Section 96 of the Fair Work Act 2009 (Cth) (the Act) provides that “for each year of service with his or her employer, an employee [excluding casual employees] is entitled to 10 days of paid personal/carer’s leave”.  This entitlement accrues progressively during a year of service according to the employee’s ordinary hours of work and it accumulates from year to year.

What is a day?

In a recent case the Full Court of the Federal Court of Australia had to consider the meaning of “day” in section 96 of the Act.

The case related to a group of employees who worked 38 ordinary hours per week, but did so over 3 working days of 12 hours (plus unpaid break time).

In accruing for personal/carers leave the employer credited the employees with 76 hours of leave in each year of service.  Hence the employer acted on the basis that “day” in section 96 of the Act meant a notional day made up of 7.6 hours of work.  As a result the affected employees “used up” their annual accrual of leave after they had been absent from work for 6.3 of the 12-hour days.

The employees complained that this was less than the 10 days referred to in section 96 of the Act.  The employees contended that “day” means a period of 24 hours in which ordinary work is performed and not a notional day of 7.6 working hours.

By a 2-1 majority, the Full Court ruled that a “day” for the purposes of the leave provision in the Act meant a 24-hour period in which ordinary hours of work is carried out.

Impact of the decision

The decision has implications for thousands of employees who work shift work, particularly in the healthcare and manufacturing sectors, and could see huge back-pay bills for employers.

Employers who engage workers who work non-standard hours (ie. shiftworkers) should, in light of this decision, review their personal leave accrual, deduction and payroll systems to ensure that such employees could, in theory, take 10 shifts as personal leave from work every year, without loss of pay.

A Festive Reminder: Employee Entitlements during the Holiday Season

As 2020 quickly approaches, there are a number of upcoming statutory holidays that would trigger obligations of employers to their employees. Below, we have summarized some the most important obligations of provincially regulated employers in Alberta, British Columbia, Ontario and Quebec, as well as federally regulated employers, to their employees with respect to the upcoming statutory holidays.

Which Days?

Christmas, Boxing Day and New Year’s Day

Every jurisdiction in Canada recognizes Christmas Day (December 25) and New Year’s Day (January 1) as statutory holidays. However, only Ontario (under the Employment Standards Act, 2000) and the federal government (under the Canada Labour Code) recognize Boxing Day (December 26) as a statutory holiday.

Non-Statutory Religious Holidays

Although employees are not automatically entitled to pay for time taken off for non-statutory religious holidays, employers should be mindful of their duty to accommodate employees for religious holidays under applicable human rights legislation.

By way of example, the Ontario Human Rights Tribunal in Markovic v Autocom Manufacturing Ltd. provided useful guidance on the extent of employer’s duty to accommodate employees for non-statutory religious holidays.[1] Markovic involved a human rights complaint in which the employee alleged that his employer had discriminated against him on the basis of his creed by failing to pay him for the time he took off work for Eastern Orthodox Christmas on January 7, 2004. The employer subsequently developed a policy for responding to employee requests to take time off for religious holidays. The question in front of the Tribunal was whether the policy satisfied the employer’s accommodation obligations under the Ontario Human Rights Code.

Answering the question in the positive, the Tribunal concluded from a review of the relevant case law that providing a process for employees to arrange for time off for religious observances through options for scheduling changes, without loss of pay, fulfills the employer’s duty to accommodate. For more context, the options provided in the policy in question included making up for the time on a later date that is a secular holiday or when the employee would not ordinarily be scheduled to work and being paid for the substituted shift or working hours, switching shifts with another employee and being paid for the substituted shift, adjusting the employee’s shift schedule where possible, using any outstanding paid vacation for the time off, or taking a leave of absence without pay.

Eligibility and Pay

Jurisdiction Who is eligible? How much to pay?
Federal Under the Canada Labour Code, employees are entitled to be paid for prescribed statutory holidays, including Christmas, Boxing Day and New Year’s Day. Alternatively, employees may add this day to their annual vacation or may take it at a time convenient to both the employee and the employer.

However, an employee is not entitled to holiday pay if they do not report for work after having been called to work on that day, or for which they make themselves unavailable to work when the conditions of the employment in the industrial establishment in which they are employed require them to be available or allow them to make themselves unavailable.

This last rules only applies to employees who are employed in a continuous operation, which include:

a) any industrial establishment in which, in each seven-day period, operations once begun normally continue with cessation until the completion of the regularly scheduled operations for that period;

b) any operations or service concerned with the running of trains, planes, ships, trucks or other vehicles, whether in schedules or non-scheduled operations;

c) any telephone, radio, television, telegraph or other communication or broadcasting operations; and

d) any operation or service normally carried on without regard to Sundays or general holidays.

Holiday Pay

An employer shall pay its employee holiday pay equal to or greater than their daily wages, calculated by taking one twentieth of the wages, excluding overtime pay, that the employee earned during the four week before the holiday week.

Additional Pay for Holiday Work

If an employee is required to work on a holiday, in addition to the holiday pay, the employer shall pay the employee wages at a rate equal to at least one and one-half times their regular rate of wages for the time that they work on that day. An employee employed in a continuous operation who is required to work on the holiday will be paid the additional pay, given a holiday with pay at some other time, or be paid holiday pay for the first day on which they do not work after that day if their collective agreement so provides.

British Columbia To be eligible for holiday pay, an employee must have been employed by the employer for at least 30 calendar days before the holiday, and:

a) has worked or earned wages for 15 of the 30 calendar days preceding the holiday; or

b) has worked under an averaging agreement under the Employment Standards Act of BC at any time within that 30 calendar day period.

Employee not Working on a Holiday

An employee who is given a day off on a statutory holiday or is given another day off in substitution for a holiday must be paid an amount equal to at least an average day’s pay, which is calculated by dividing the amount paid or payable to the employee for work done during and wages earned within the 30 calendar days before the holiday (including vacation pay) less any overtime pay, by the number of days the employee has worked or earned wage within that 30 day period.

This average day’s pay applies whether or not the holiday falls on the employee’s regularly scheduled day off.

Employee Working on a Holiday

If an employee works on a holiday, they must be paid  1 ½ times their regular wage for the first 12 hours worked, and double the regular wage for any time worked up to 12 hours, as well as an averaged day’s pay determined using the formula above.

Alberta To be eligible for holiday pay, an employee must have worked for the employer for 30 work days or more in the 12 months preceding the holiday. An employee is not entitled to general holiday pay if the employee does not work on a holiday when required or scheduled to so, or is absent from employment without the consent of the employer on the work day before or after a holiday. Holiday Falls on a Regular Day of Work: Employee works on the holiday

If a holiday falls on a regular work day* and the employee works on the holiday, then the employee is entitled to general holiday pay of an amount that is equal to: (1) at least their average daily wage and an amount that is at least 1.5 times their wage rate for each hour worked on that day, or (2) the standard wage rate for each hour worked on the holiday and a day off with pay where the pay is at least as much as their average daily wage.

Holiday Falls on a Regular Day of Work: Employee does not work on the holiday

If the holiday falls on a regular day of work and an employee doesn’t work on the holiday, then the employee is entitled to general holiday pay of an amount that is at least their average daily wage.

Holiday Falls on a Non-Regular Work Day: Employee works on the holiday

If an employee works on a holiday that is not considered a regular work day, then the employee is entitled to general holiday pay of an amount that is equal to at least 1.5 times their wage rate for each hour worked on that day.

Holiday Falls on a Non-Regular Work Day: Employee does not work on the holiday

If the holiday falls on a non-regular day of work and an employee doesn’t work, they are not entitled to general holiday pay.

Holiday During Annual Vacation

If an eligible employee is on vacation when a general holiday occurs, the employee can either: (1) take off with pay the first scheduled working day after their vacation; or (2) in agreement with their employer, take another day that would otherwise have been a work day before their next annual vacation.

* A regular day of work is every workday in an employee’s normal schedule: if the employee works the same days every week, those days are considered their regular days of work. Other days are not regular days of work.

Ontario An employee is not eligible for holiday pay if he or she fails, without reasonable cause, to work on the work day before or after the holiday. An employee’s holiday pay is generally calculated by dividing the total amount of regular wages earned and vacation pay earned in the four weeks before the holiday week by 20.

Holiday Falling on a Work Day

If a holiday falls on an ordinary work day for an employee and they are not on vacation, the employer must give the employee the day off and pay him the holiday pay.

If the employee and employer agree for the employee to work on the holiday, the employer shall pay the employee their regular wages for the hours worked, and substitute a working day for the holiday and pay the employee holiday pay for the substituting day. The day substituting for the holiday must be within three months after the holiday or, if the employee and employer agree, within twelve months after the holiday. The employer must also provide the employee before the holiday a written statement that sets out the holiday that is being substituted, the date of the substituting day and the date on which the statement is provided to the employee. Alternatively, if the employee and employer agree, the employer can instead pay the employee holiday pay for the day plus premium pay for each hour worked.  Premium pay is an amount that is at least one and one half times the employee’s regular rate. The legislation also prescribes specific calculation methods and entitlements to holiday pay if the employee fails to perform the work that they agreed to perform on the holiday.

Holiday Not Falling on a Work Day

If a holiday does not fall on an ordinary work day or falls on a vacation day for an employee, the employer must substitute another work day for the holiday and pay the employee holiday pay for the substituting day. The day substituting for the holiday must be within three months after the holiday or, if the employee and employer agree, within twelve months after the holiday.  The employer must also provide the employee before the holiday a written statement that sets out the holiday that is being substituted, the date of the substituting day and the date on which the statement is provided to the employee.

Alternatively, if the employee agrees, the employer may pay the employee holiday pay for the holiday instead of substituting another day for the holiday.

If the employee and employer agree for the employee to work on the holiday, the employer must pay the employee his regular wages for the hours worked, and substitute another work day for the holiday and pay holiday pay for the substituting day.  The same written requirements and restrictions regarding the substitution would apply.  Alternatively, if the employee and employer agree, the employer can pay the employee holiday pay for the day plus premium pay for each hour worked. The legislation also prescribes specific calculation methods and entitlements to holiday pay if the employee fails to perform the work that they agreed to perform on the holiday.

Quebec An employee is not entitled to holiday pay if the employee has been absent from work without the employer’s authorization or without valid cause on the working day before or after the holiday. The holiday pay for each statutory general holiday must be 1/20 of the wages the employee has earned during the four complete weeks of pay before the week of the holiday, excluding overtime.

Employee Working on Holiday

If an employee must work on a holiday, the employer must pay the employee his regular wages plus the holiday pay, or grant them a compensatory holiday, which must be taken within the three weeks before or after the holiday unless a collective agreement or a decree provides for a longer period.

Holiday Falling on Non-Work Day or Annual Leave

If a holiday falls on a non-work day or annual leave of an employee, the employer must pay the employee the holiday pay or grant them a compensatory holiday on a date agreed upon between the employer and the employee or fixed by a collective agreement or a decree.

Provisions regarding statutory holiday entitlements and payments may apply differently to employers who are party to collective agreements as well as employers in specific sectors. For example, Ontario has specific provisions regarding hospitals, continuous operations, hotels, motels, tourist resorts, restaurants, and taverns. The methods of calculation for holiday pay may also vary if employees are remunerated by commission or other incentive pays.

Happy Holidays!

The authors would like to thank Simon Gollish, articling student in Ottawa, for his contribution to this publication.

[1] Markovic v Autocom Manufacturing Ltd, 2008 HRTO 64 [Markovic].

La perte de contrôle d’un camion par un salarié n’exclut pas la faute de l’employeur

Dans le cadre de leurs missions, les salariés doivent respecter l’ensemble des règles (notamment de sécurité) applicables. En particulier, les chauffeurs routiers sont astreints au respect du Code de la Route.

Mais l’employeur est également responsable de la sécurité de ses salariés et, si l’obligation de sécurité n’est désormais plus une obligation de résultat, il n’en demeure pas moins que la responsabilité de l’employeur peut être engagée au titre de l’obligation de sécurité lorsque celui-ci a manqué à ses obligations à ce titre.

Dans le cadre de cette affaire, le salarié, chauffeur d’un poids lourd, avait perdu le contrôle de son véhicule, à la suite de quoi il avait été éjecté de son véhicule.

Les causes de la perte de contrôle du véhicule par le salarié étaient restées inconnues, le salarié ne se souvenant pas des faits. L’employeur démontrait avoir régulièrement entretenu le véhicule, effectué les contrôles techniques obligatoires, et respecter les cadences de travail. L’analyse du disque chronotachygraphe à laquelle les services de gendarmerie se sont livrée n’avait pas donné lieu à observation de leur part.

Le salarié n’avait pas sa ceinture de sécurité, le poids lourd étant démuni de cet équipement (pourtant obligatoire dans les véhicules de plus de 3,5 tonnes depuis le 1er octobre 1999).

L’accident de la route fut reconnu comme un accident du travail, ce qui n’était pas contestable. Le salarié victime avait alors agi en responsabilité de son employeur pour faute inexcusable. Il soulevait notamment que le véhicule aurait dû être équipé d’une ceinture de sécurité, et que son absence avait concouru à la gravité de l’accident dont il a été victime.

L’employeur soutenait, pour sa part, que l’absence de ceinture de sécurité n’avait pas fait l’objet de remarque dans cadre du contrôle technique du véhicule, et qu’en tout état de cause, cette défaillance n’avait joué aucun rôle dans la survenance de l’accident qui résultait de la perte de contrôle du camion par son conducteur.

La Cour d’appel a refusé de retenir la faute de l’employeur au motif que le salarié a perdu le contrôle de son véhicule pour une raison inconnue et qu’il n’apportait pas la preuve de la responsabilité de l’employeur dans la réalisation de l’accident.

La Cour de cassation a refusé de suivre le raisonnement de la Cour d’appel et a, au contraire, reconnu la faute inexcusable de l’employeur.

Les juges ont en effet considéré, par un attendu de principe, « qu’il est indifférent que la faute inexcusable commise par l’employeur ait été la cause déterminante de l’accident survenu au salarié, mais qu’il suffit qu’elle en soit une cause nécessaire pour que la responsabilité de l’employeur soit engagée, alors même que d’autres fautes auraient concouru au dommage ».

Selon les juges, dans la mesure où le salarié avait été éjecté de son véhicule par le pare-brise, l’absence de ceinture de sécurité avait nécessairement concouru à la réalisation du dommage (c’est-à-dire la conséquence de l’accident, et non sa cause). La responsabilité de l’employeur est donc engagée.

Le raisonnement tenu par la Cour de cassation prive l’employeur de la possibilité de s’exonérer ou d’atténuer sa responsabilité en rapportant la preuve d’une faute de la victime, d’un tiers ou d’une cause extérieure, dès lors qu’un manquement à son obligation de sécurité peut lui être reproché, et aura concouru au dommage.

Rappelons que la reconnaissance de la faute inexcusable de l’employeur peut avoir des conséquences financières importantes (indemnisation des préjudices subis par le salarié ou par ses ayants-droit, rente majorée…). En terme de sécurité des salariés, la vigilance est de mise.

Enforcement and bargaining power of trade unions

Trade unions should shape working life in a meaningful way through collective agreements ensuring good working relations. In order to be eligible for collective bargaining, they must have a minimum bargaining unit vis-à-vis the workplace, says the German Federal Constitutional Court.

In Germany, the labour courts decide whether associations are eligible for collective bargaining and can therefore be parties to a collective agreement. Not only companies where the workforce is seeking the collective bargaining, but also competing associations may question the classification of an association as a trade union and seek to have their bargaining capacity denied. In the present case, following such request, the Higher Labour Court had classified an association of employees in the private insurance sector as not eligible for collective bargaining. The association then filed a constitutional complaint arguing a violation of its fundamental right to freedom of association.

The Federal Constitutional Court rejected the complaint (Order of 13.09.2019, Ref. 1 BvR 1/16) holding that it is not a violation of the right of freedom of association if collective bargaining autonomy is granted only to those associations that have adequate organizational unity and assertiveness and are able to fulfill their tasks independently of the goodwill of employers and other employee groups. The number of employees represented by the association determines its ability to negotiate and its organizational efficiency. It also provides evidence as to whether an association can build up sufficient pressure to win and conclude collective agreements. The denial of the collective bargaining capacity to splinter associations without sufficient membership does not conflict with the fundamental right to freedom of association.

In the present case, the Higher Court could not establish with certainty that the union was sufficiently powerful. Nevertheless, the court’s assumption that the union’s influence is not guaranteed by a membership of 0.05% of the workforce, taking into account the composition of its members, seems plausible.

Industrial manslaughter progresses in the Northern Territory and Western Australia

Following our recent updates regarding the introduction of workplace manslaughter laws in Victoria (see our blog article here) and proposed legislative changes in New South Wales (see our blog article here), there have now been further developments, with industrial manslaughter laws being passed in the Northern Territory (NT) and proposed in Western Australia as part of a mirror work health and safety (WHS) Bill.

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Supreme Court awards employee compensation amounting to 5% of the revenue of outstandingly profitable patent in Shanks v Unilever

The ownership of a company’s intellectual property is a sensitive subject for many companies. A recent case considered the compensation an employee may be entitled to under the Patents Act 1977 where the patents are held to be of outstanding benefit to the employer.

As it is often a company’s employees who create intellectual property, it is vital that the company’s interests are safeguarded in this respect. The general position in the UK is that intellectual property created by employees in the course of their normal duties of employment is automatically owned by their employer, and that this applies also to inventions and patents.

In any event, we would always advise that companies include in their standard terms of employment an intellectual property clause expressly dealing with the ownership of intellectual property created by the relevant employee, bearing in mind that laws and stipulations can differ from country to country.  In the case of self-employed consultants, we would advise that an assignment of intellectual property be obtained.  Of course, relevant measures also need to be taken by a company to file for relevant intellectual property protections.

Notwithstanding the above, employers should also be aware that under section 40 of the Patents Act 1977 such an employee can apply to the court for a level of compensation in respect of an invention they have made in the following circumstances:

1) the invention has resulted in a patent; and

2) the patent is of “outstanding benefit” to their employer, having regard to the size and nature of the employer’s undertaking.

3) That compensation must be such as to award the employee a “fair share” of the benefit which the employer has enjoyed.

Employers cannot make employees contract out of the above right.

The above provision was relied upon recently by an employee of Unilever in a case that went to the Supreme Court. After a prolonged legal battle, the employee was awarded £2m by way of compensation, a fair share, being adjudicated at 5% of the benefit that Unilever derived (valued at £24m) from the pioneering system the employee invented for measuring the concentration of glucose in blood and other liquids, plus an uplift to reflect the impact of time on the value of money.

The Supreme Court clarified a number of significant points which form the building blocks for any party seeking to mount or defend a claim under this provision which are summarised below.

  1. Benefit

Benefit is the benefit in the hands of the employer after the deduction of any costs to the employer of securing that benefit. It was illegitimate to reduce the benefit by accounting for tax paid.

  1. Outstanding

The Court said that the term is to be given its normal meaning i.e. exceptional or to stand out.

  1. Relevance of the undertaking’s size and nature

The Patent Act stipulates that regard must be had to the size and nature of the employer when evaluating whether the benefit derived from the patent should be assessed as being outstanding. The Courts below had held that the benefit was not outstanding when considering revenues of some of Unilever’s product lines in the order of billions, leading to criticisms that the if that were right, then Unilever were simply too big to pay. The Supreme Court found that a comparison with an employer’s overall profitability may be too simplistic, one had to compare the benefit generated by the patent with other patents resulting from the work carried out by the individual’s employer (being the UK-based research entity, owned by Unilever) and carry out a multi-factorial analysis, such as the employee’s pay, risk taken by the business, rate of return, investment and efforts put in by the employer.

On the employee’s evidence all of these factors pointed to his favour and the patent was held to have given rise to outstanding benefit.

  1. Fair Share

In this case, “fair share” amounted to 5% of profits secured by Unilever on the basis that the employee was employed as a inventor and so, in inventing the system, he was merely doing what he was employed to do.  Further, the bulk of the profits came from licences secured by Unilever, which the employee played no part in.   The actual compensation was also increased to take account of time value of money (the benefit received by Unilever for having the money that should have been credited to the employee over the years).

Commentary

Previously the Courts have said that it was not necessary to define outstanding benefit because it will recognise it when it occurs. With all the lower Courts’ and tribunal’s finding that the benefit of the employee’s patent was not outstanding, there appears to have been a tangible lowering of the bar to reach the outstanding benefit criteria. Certainly, the Supreme Court made clear that the patent need not have been critical to the company’s success to prove outstanding benefit, as was the case in Kelly and another v GE Healthcare Ltd.

This high profile decision serves as a useful reminder for employers, particularly those investing heavily in research and development, that inventor compensation claims may be made. Employers may want to consider incentive schemes and bonuses which recognises achievements for employees that come up with profitable inventions as it would be considered in the multi-factorial analysis when assessing whether the benefit was outstanding, possibly minimising risks of claims being made.

See Shanks v. Unilever.

What is the real reason for dismissal?

The Supreme Court in the UK has held in the case of Royal Mail Group Ltd v Jhuti that, where the real reason for dismissal is a protected disclosure which has been hidden from the person determining the dismissal, by a person in a position of responsibility, the dismissal is automatically unfair, even where the decision maker relied upon the reason for the dismissal in good faith.

In this case the employee made a protected disclosure to her line manager. As a result she was put under pressure to withdraw her allegations by that line manager, which she duly did.  Following the retraction of her allegation her performance was questioned by her line manager and she was put on a performance improvement plan.  She raised a grievance about her treatment and was subsequently signed off work with work-related stress.  Eventually the company appointed a manager with the same level of seniority to consider whether her employment should be terminated.  Although the employee did not attend the hearing she provided evidence by way of email.  The line manager was also asked to comment and provided evidence of the retraction of the allegations but not details of the allegations themselves.  The decision maker accepted the account of what had happened and dismissed the employee on the grounds of performance.

The employee brought a claim to the employment tribunal both on the grounds that she had suffered an unlawful detriment due to her protected disclosure under s47(B) Employment Rights Act 1996 (ERA), and also that she had been automatically unfairly dismissed by reason of the disclosures under s103A ERA.

The Employment Tribunal upheld the claim for detriment but dismissed the claim of automatic unfair dismissal. It held that the protected disclosures were not the reason for the dismissal since the decision maker was unaware of the disclosure and had genuinely believed that the performance of the employee had been inadequate (albeit on tainted evidence).  The EAT however, overturned the decision on the dismissal, holding that the reasoning of the “manipulator” could be attributed to the employer.  The Court of Appeal disagreed with the EAT and again held that the dismissal was not automatically unfair, holding that it was only necessary to consider the mental process of the person authorised to take the decision.

The question that therefore had to be decided by the Supreme Court was whether the employment tribunal had correctly identified “the reason (or if more than one, the principal reason) for the dismissal”. It pointed out that the court’s answer to that question was not limited to automatic unfair dismissal but would also extend to “ordinary” unfair dismissal under s98 ERA.  However, it did also point out that the facts of this case, where the decision to dismiss was taken in good faith, but not for a reason which the employee’s manager had dishonestly constructed, would not be common.

The key issue was determining whose state of mind could be attributed to the company. The Court of Appeal had relied on a previous decision that it was the knowledge of the person deputed to carry out the employer’s functions under the unfair dismissal legislation, and only that person, which fell to be attributed to the company for that purpose.  Whilst the Court of Appeal did accept that there may be circumstances where it may be appropriate for a tribunal to attribute knowledge to the employer that was held otherwise than by the decision maker, such as the knowledge of a manager who had responsibility for the conduct of an investigation, this did not apply to these facts. However, the Supreme Court held that if a person, in the hierarchy of responsibility above the employee, determines that the employee should be dismissed for one reason, but hides it behind an invented reason which the decision-maker adopts, it is the court’s duty to penetrate through the invention rather than to allow it to infect its own determination.  There is no conceptual difficulty in that situation in attributing to the employer that person’s state of mind rather than that of the deceived decision-maker.

This decision does seem to clarify that in order for the manipulation to be attributed to the company, it should be done by someone in a position in a higher level of authority than the employee (in this case the line manager). From a practical point of view it is advisable that any decision maker ensures that a thorough investigation has been done to obtain information from all relevant parties, including line managers and HR.

Don’t be so reckless – Employer convicted in first successful safety prosecution for bullying under the harmonised WHS Act

Safe Work Australia has recently revealed that the number of serious workplace injuries related to bullying and harassment has nearly doubled in Australia since 2009.  Mental health-related  claims that involve workplace harassment or bullying are skyrocketing, with about a quarter of all psychological claims based on allegations of workplace harassment or bullying.  In the 2019/20 financial year, over 1,800 people were compensated for a workplace injury sustained through workplace bullying or harassment.

In light of these numbers, WHS regulators around the country have become increasingly focussed on prosecuting individuals for bullying-related breaches of the national harmonised WHS law.

Highlighting the significant risks for employers, Tad-Mar Electrical Pty Ltd (Tad-Mar) was this month fined $15,000 ( the maximum penalty is $500,000) after pleading guilty to the Category 3 offence of contravening section 33 of the Work Health and Safety Act 2012 (SA) (WHS Act).

The decision follows successful category 1 convictions of both of the individual employees involved in the incident.  This decision is significant as it represents the first conviction for a bullying-related prosecution under the national harmonised WHS law.

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