No Privilege For Advice On How To 'Cloak' Dismissal On Basis Of Discrimination As Dismissal For Redundancy

In a recent decision, the Employment Appeal Tribunal (EAT) found that an email containing advice from an in-house lawyer was not protected by privilege due to the "iniquity principle", as there was a strong prima facie case that it advised on how to "cloak" as dismissal for redundancy the claimant's dismissal resulting from allegations of disability discrimination and victimisation: X v Y Ltd [2018] UKEAT 0261_17_0908.

It is well established that the iniquity principle prevents the application of legal professional privilege where advice is given for the purpose of facilitating crime or fraud. Fraud for these purposes has been interpreted to include "sharp practice", or conduct which commercial people would say was a fraud, or which the law treats as entirely contrary to public policy (see for example this post). It would not normally include conduct which merely amounts to a civil wrong, ie a tort, nor does it cover conduct which amounts to a breach of fundamental human rights (see this post).

In the present case, it appears to have been key to the EAT's decision that (on a strong prima facie case) the advice was an attempt to deceive both the claimant and, ultimately, an employment tribunal. The EAT left open whether advice to commit the tort of discrimination would, in itself, engage the principle, saying that such advice "may be different in degree" from advice on how to commit fraud or breach of fiduciary duty but, depending on the facts, "may be so unconscionable as to bring it into the category of conduct which is entirely contrary to public policy".

Background

The claimant was employed by the respondent as a lawyer until he was dismissed on 31 January 2017. During his employment the claimant made allegations of disability discrimination against the respondent, including by bringing a claim in the employment tribunal in August 2015. From April 2016 the respondent conducted a programme of voluntary redundancy.

On or about 19 May 2016 the claimant overheard a conversation in a pub in which, as the employment tribunal found, a woman mentioned that a lawyer at the respondent company had brought a disability discrimination complaint and that there was a good opportunity to manage him out by severance or redundancy as part of an ongoing reorganisation.

In October 2016 the claimant was sent, anonymously, a print out of an email dated 29 April 2016, which was marked "Legally Privileged and Confidential" and was sent from one in-house lawyer...