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Keep it under wraps?

Our employment team analyses a case on whether disclosure of an executive’s salary could justify dismissal for gross misconduct.

In a recent case heard at the Employment Appeal Tribunal (EAT), it was considered whether an employer dismissed their employee fairly following alleged misconduct relating to disclosure of another employee’s salary.

The case concerned John McCambridge, a video game developer who had six years’ service and an unblemished disciplinary record. He was dismissed for a disciplinary issue relating to an alleged ‘unauthorised disclosure or misuse of confidential information’.  McCambridge found a document which was left on a communal printer detailing an executive’s salary.  McCambridge told some colleagues of his findings and word spread rapidly. Soon the information inspired the creation of a public ‘guess pay of the executive’ bidding game.  Following a disciplinary investigation McCambridge was dismissed for gross misconduct.  As a result, he brought a claim for unfair and wrongful dismissal.

The EAT upheld the tribunal’s decision that McCambridge’s dismissal was substantively, as well as procedurally, unfair.  The company ‘failed to follow its own policy and procedures and the ACAS Code of Practice’.  The Judge ultimately concluded that the company wanted to make an example of McCambridge and reacted in an exceptionally heavy-handed manner. Further the Judge went on to state that no reasonable employer would class discussion of a colleague’s salary internally as gross misconduct.

It was also found that McCambridge was wrongfully dismissed because there was no breach of any express contractual terms. Firstly, there were no provisions in his contract of employment identifying pay and salary as a confidential matter. Secondly, apart from the HR department, none of the employees understood that the information must be kept confidential. Thirdly, even if ‘salary’ was construed as confidential information, leaving the document on a communal printer had put it in the public domain in the workspace, thus, losing its confidential status.  Finally, McCambridge did not use this information for some ulterior, self-interest or profit motive; he simply used it for gossip with his colleagues.

This case is a good reminder for employers to implement fair disciplinary procedures and follow the ACAS Code of Practice on Discipline and Grievance.  If an employer is keen to keep salary information confidential there should be well drafted clauses in the contract to reflect this.