Employment problems and legal advice

Personnel problems

Let’s imagine that over the past few months one employee in particular has been causing you severe problems: they’re always late for work (but turn up with the most novel of excuses), standards have fallen way below par and a number of your important clients have been offended by their rather “unusual” sense of humour. All in all, they aren’t promoting your business in a good light and the directors would like to get rid.

Taken legal advice

To consider the company’s options and the potential risks, the advice of a specialist employment solicitor has been sought. A lengthy written report has been received and, before a decision can be made, the board needs to discuss it. Someone’s suggested that all correspondence be copied and attached to the agenda for the next meeting. That way everyone can read and digest it beforehand. This may sound like a sensible approach, but why could it land you in hot water?

Legally privileged

Before we can understand the potential pitfalls we need to look at the often misunderstood concept of “legal privilege”. Once established, this absolute right entitles you to refuse to disclose all communications with your solicitor to a third party, the tribunal, the courts and any regulatory body or enforcement agency on the grounds of confidentiality. It can only be overridden in limited situations, e.g. where fraud is suspected.

Risk. However, it’s very easy to lose this privilege and all the protection that goes with it.

What advice is covered?

Advice covered by legal privilege doesn’t just include an explanation of the relevant laws; it extends to any guidance that you’re given by your solicitor on what you should do in a particular set of circumstances, e.g. regarding dismissal of an employee. It also covers any commercial and strategic opinion of a legal nature.

What’s the problem?

But here’s the problem - if that same advice is passed beyond the client, the right to legal privilege no longer applies. This means all those we’ve listed - including the employee it relates to - have the right to see it (assuming they request it). So how might this happen? In the situation we’ve described, a person may attend the board meeting who is not a director, e.g. a senior manager. Alternatively, a recipient of the original documentation may forward it on, say, to the employee’s manager to “keep them in the loop”. Once this happens, it’s deemed to be no longer in your control and it loses its protection.

Tip 1. Rather than copying the documentation, a safer approach would be for the director who has been liaising with the solicitor to prepare a verbal report for the board. Any discussions relating to it should not be recorded in the minutes of the meeting - again, this document can be disclosable.

Tip 2. If the advice and/or any correspondence must be copied, always mark it “privileged and confidential - created for the purpose of obtaining legal advice” and have an “authorised circulation group”. This isn’t a fail-safe option, but will help if you’re later challenged on its status.