In Phoenix House Ltd v Stockman, the EAT were asked to determine whether Mrs Stockman's behaviour in covertly recording a meeting with HR amounted to misconduct and, if so, whether the compensation awarded by the ET should be reduced as a result.

In May 2013, Mrs Stockman, a financial accountant, covertly recorded a meeting with HR following an incident that had taken place earlier that day. A lengthy disciplinary process followed. In November, it was decided that the employment relationship had broken down beyond repair and Mrs Stockman was dismissed. The fact of this recording was only disclosed during Mrs Stockman's successful unfair dismissal claim in the ET. On appeal, Phoenix argued that any award of compensation should be reduced to Nil as it would have dismissed Mrs Stockman for gross misconduct if it had been aware of the covert recording at the time it was made.

The EAT dismissed the appeal. It considered the variations in expected behaviour between employers; one employer may attach particular importance to a standard of conduct while another might condone it or treat it leniently. Because of this, part of the assessment is the attitude of the employer in question towards the particular behaviour. The tribunal had (rightly, according to the EAT) placed reliance on the fact that Phoenix had not listed covert recordings in its disciplinary policy as amounting to gross misconduct, and the policy was not amended in light of these proceedings.

The purpose of the covert recording was also relevant. Mrs Stockman's evidence was that she had been flustered and uncertain if the device would even record. The EAT recognised that most people now carry devices capable of recording conversations that only take a moment to switch on. This fact, it thought, reduced the likelihood that a covert recording could be part of a calculated plan to entrap an employer or gain a dishonest advantage. This was aided by the fact that Mrs Stockman had only recorded a single meeting, had not relied on it at any point during the internal proceedings, and there was no suggestion that she had intended to entrap Phoenix.

Where an employer has a strong view that covert recordings constitute misconduct, the Phoenix decision will make it necessary for this attitude to be clearly conveyed to employees in some way. It is also good practice, as suggested by the EAT in obiter, for employees or employers to say if there is an intention to record a meeting and, if so, how.

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