Council wins appeal over disclosure order that would have meant it breached law

A borough council has won an appeal after an Employment Tribunal ordered disclosure which would, if given, have resulted in the local authority breaching the law.

In Northampton Borough Council v Wolstenholme [2018] UKEAT 0130_18_041 His Honour Judge Martyin Barklem said that the Employment Tribunal had “erred in law in ordering disclosure which would, if given, have put the Respondent in breach of section 19(5) of the Anti-Terrorism, Crime and Security Act 2001, by which the Respondent was prevented from further disclosing information obtained by it from HMRC pursuant to subsection 19(2) except in certain circumstances and with the consent of the Commissioners of HMRC.”

The EAT judge also said that no reasons for the ET decision had been given, despite their having been sought.

Employment Judge Ord had ordered Northampton on 29 May 2018 to deliver to the claimant all documents received from and sent to HMRC regarding the claimant, redacted as required but left unredacted insofar as was necessary so that the evidence upon which the respondent relied in relation to the matters about which the complainant complained in these proceedings could be seen and understood by her.

The claimant/respondent had been dismissed for undertaking work other than the job she was doing for the council, in breach of a requirement that she seek permission to undertake any such employment.

In her ET1, the claimant had admitted having taken secondary employment, and said that, at the disciplinary hearing, she said "some stupid things and denied secondary employment".

HHJ Barklem said: “Given these admissions I am not sure to what issue the disclosure ordered goes, in any event. The claimant has appeared today and has addressed me briefly, and I think following our discussion we are both a lot clearer as to what the issues might be, but these plainly will have to be resolved elsewhere.”

As part of its investigation into the claimant having undertaken secondary employment, the council sought and obtained certain information from HMRC: Judge Barklem inferred that these would have been records of declared earnings.

However, under section 19(5) of the 2001 Act, the respondent council was prevented from further disclosing information obtained by it pursuant to subsection 19(2) except in certain circumstances and with the consent of the Commissioners.

An officer of HMRC wrote to Northampton, which had sought its advice, and confirmed that the information which had been provided could not be disclosed in connection with Employment Tribunal proceedings.

Judge Barklem said this email was forwarded to the Employment Tribunal, but as no reasons had been provided by the Tribunal, despite having been sought, “it was not clear whether it was seen by the Employment Judge, or, if it was, why he nevertheless made the Order which he did”.

The EAT judge said: “To make an Order which would result in a public body breaching the law is clearly an error of law. If the Tribunal had in mind some exception to the statutory provision engaged, then the failure to give reasons itself constitutes a similar error. Consequently, I have no hesitation in allowing this appeal, setting aside the Disclosure Order and remitting it back to the Tribunal.”

Judge Barklem added: “The Tribunal considering the matter afresh should, first, establish to what issue in the case the HMRC information is relevant: the claimant seems to admit that she was indeed engaged in secondary employment despite having denied it to the respondent.

“If there is indeed a live issue, it should then consider the comment by HMRC in the email to the effect that it would be able to disclose the material to the Employment Tribunal if ordered to do so by a Tribunal Judge. This might afford a route forward.”