In most cases, it is misconduct for an employee to make a covert recording at work because it breaches the implied term of trust and confidence, but a recent ruling at the Employment Appeal Tribunal (EAT) showed that it depends upon the purpose of, and circumstances surrounding, the recording.

Compensation awarded by an employment tribunal for unfair dismissal can be reduced or extinguished where an employee has committed misconduct during their employment, and this is the case even if the employer did not know of the misconduct at the time of dismissal. There are two different parts of any such award and they are both affected differently by misconduct. A basic award may be reduced if the tribunal finds that the claimant’s conduct before dismissal was such that it would be just and equitable to reduce it, even if the conduct had nothing to do with the dismissal itself. Alternatively, a compensatory award can only be reduced where the claimant’s conduct contributed to the dismissal, commonly referred to as “contributory conduct” or “contributory fault”.

Phoenix House Ltd v Stockman (2019)

In this case, the Claimant was employed in the finance department at Phoenix House and reported to the Head of Finance, who reported to the Finance Director. Following a restructure, in which her post was removed, the Claimant applied for various internal positions and obtained a more junior role. The Claimant felt that the Finance Director had been treating her differently and informed the Head of Finance of her concerns. The Claimant was later invited to a meeting with HR, which she secretly recorded, before lodging a grievance in which she claimed that the Finance Director had unlawfully harassed her, and she could no longer work with him. The grievance was dismissed but a HR representative later found that the working relationship had irretrievably broken down and summarily dismissed the Claimant.

During the Claimant’s successful unfair dismissal claim, she disclosed the covert recording of her meeting with HR. The employer contended that this counted as ‘just and equitable’ grounds for reducing her compensation for her unfair dismissal as, making a covert recording, without pressing justification, was misconduct.

The EAT rejected the Respondent’s attack on the tribunal’s approach to reductions as the tribunal is entitled to come to its conclusions on the facts. The tribunal looked at the varied purposes and nature of the recordings and how this contributes to whether the covert recording constitutes misconduct. The EAT found that it is good employment practice for an employee or employer to say if they have any intention to record a meeting, and it is therefore generally misconduct not to do so, except in the most pressing of circumstances.