Case update (3):  Unfair Dismissal – Disclosure of Salary Details

Summary:  Was it gross misconduct to discuss the salary of a senior employee?

No, says the EAT in Jagex Ltd v McCambridge available here.

Facts:  Mr McCambridge, the employee, was employed by Jagex Ltd, the employer.  Mr McCambridge found a visa application for a very senior employee that had been left on a communal printer at work. The application contained details of the very senior employee’s salary.

Mr McCambridge left the document on the printer but later shared the information with three of his colleagues.  Unsurprisingly, word quickly got round and by lunchtime, a group of employees (not including Mr McCambridge) had started up a game of ‘Guess the Executive’s Pay’ where people would shout out a guess and be told if the salary was higher or lower until someone came up trumps.

Word got back to management when two other more senior employees raised the issue of the executive’s pay with their line managers, citing concerns about its effect on staff morale. The employer then commenced disciplinary proceedings against Mr McCambridge on a charge of gross misconduct for ‘unauthorised disclosure or misuse of confidential information‘. The employer summarily dismissed Mr McCambridge.

Mr McCambridge brought Tribunal claims for unfair and wrongful dismissal.  The Tribunal found that Mr McCambridge had been unfairly dismissed.  In particular, the Tribunal was unimpressed with the ‘heavy-handedness’ demonstrated by the employer.

The employer appealed.  The EAT upheld the Tribunal’s decision and found that the employer had no grounds to fairly dismiss Mr McCambridge, and instead it was motivated by a wish to ‘make an example‘ of him.  The EAT held that:

• there was no express term in Mr McCambridge’s employment contract which identified salary details as confidential information. Rather the general confidentiality clause in Mr McCambridge’s contract barred him using confidential information for his own purposes (i.e. for self-interest or profit). However, this was mere ‘gossip‘;
• in general, salary is not in itself confidential – there are lots of examples where salary information is in the public domain, in annual reports and in recruitment literature; and
• the employees had not considered the information to be confidential. For example, they had openly embarked on the salary guessing game.

However, the EAT did refer the case back to the Tribunal to consider whether there should be a reduction in the compensation awarded to Mr McCambridge for contributory fault.  The EAT clarified that the Tribunal had been wrong to conclude that only gross misconduct would lead to such reduction.  Although this was not gross misconduct, Mr McCambridge’s conduct may still meet the contributory fault test of being ‘blameworthy or culpable‘.

Implications:  This case highlights that if employers want to keep salary details secret, they need to ensure that the confidentiality provisions in their staff’s employment contracts expressly cover this type of information. They should also publish guidelines for handling confidential information, and make employees aware that breach of these rules is likely to result in disciplinary action, up to and including dismissal.