Cheltenham Borough Council v Laird - Lessons learned

The recent decision of Cheltenham Borough Council v Laird must be one of the messiest local government bun fights to pass through the High Court.   Mrs Laird’s three tumultuous years as Managing Director of Cheltenham Borough Council involved allegations against the Lib Dem leader of the Council of calling her a ‘Tory nark’, allegations from an ex-employee that Mrs Laird had bugged his telephone, aborted Designated Independent Person (DIP) investigations by a leading QC, the circulation of anonymous letters detailing the reason for Mrs Laird’s departure from a previous employer, referrals to the police, the leader being heard saying over his mobile phone that ‘this is going to get nasty’ by a journalist from the local paper after mistakenly failing to cut the call, a Standards Board for England investigation and Mrs Laird bringing three claims against the Council and one against the leader for harassment.

Mrs Laird was offered the post, subject to medical clearance, as is common in local government appointments. Occupational health services declared her to be fit on the basis of her completed medical questionnaire.  Within a year her relationship with the leader had deteriorated to a point where the leader would only meet with her if a witness attended.

Various grievances were raised by the leader and senior officers against Mrs Laird. Mrs Laird raised a grievance against the leader and eight elected members.  After Mrs Laird requested that her email account was deleted, she was suspended.  At various stages, Mrs Laird became unwell and suffered from panic attacks. The Council obtained opinions from occupational health services and a psychiatrist.  These eventually resulted in her being granted ill health retirement. 

These opinions indicated that Mrs Laird had a history of depression and anxiety. The Council obtained an order from the Court for disclosure from Gloucestershire County Occupational Health Services of the pre-employment medical questionnaire that Mrs Laird completed at recruitment.  Medical evidence showed that Mrs Laird had suffered from three previous episodes of stress, anxiety or depression over the five years prior to her application.

The Council brought a claim against Mrs Laird in the High Court to attempt to recover over £500,000 for the time and expense it had incurred from disputes and almost £450,000 for the cost of her ill health retirement. This is thought to be the first time that a claim has been brought against an individual relating to pre-employment disclosure.  The Council argued that if Mrs Laird had disclosed details of her medical history, it would not have employed her.  The judge agreed this was highly likely.  However, on the basis of the brief and poorly drafted questionnaire, Mrs Laird was found to have answered honestly.

Mrs Laird brought various counter-claims in her defence.  The Council’s claim and Mrs Laird’s counter-claims failed.  The judge gave a view on the costs the Council would have been able to recover, if he had found Mrs Laird had answered the questionnaire fraudulently. He found that where the costs related to the disputes, these would have been recoverable. These included the cost of additional Human Resources support, legal advice, the DIP investigation, a medical expert report, some administrative costs and management time.

There are several interesting findings in the judgment:

• A job offer conditional upon medical clearance does not become a binding contract until that medical clearance has been received.
• Depending on the wording of the declaration in the pre-employment medical questionnaire, the completion of the questionnaire can create a duty of care on the employee to the employer.
• The information received by Gloucestershire Council Occupational Health Services was not imputed to the Council as the employer and the Council had no right to see the questionnaire without a Court order.
• Somewhat obviously, opening a meeting with the words “what would it take for you to go?”, without asking the employee if she wished to talk “off the record” is a breach of the mutual duty of trust and confidence.
• A retirement on the grounds of ill health does not automatically mean the employee is disabled for purposes of the Disability Discrimination Act 1995 (DDA).
• There is no right to mediation. Mediation may not be appropriate where the employer forms a reasonable view that it will serve no useful purpose due to the breakdown in relationships or to protect subordinate staff who had made allegations against the employee.

Our tips for dealing with recruitment and pre-employment questionnaires and for searching an employee’s office and investigating an employee’s email account are:

• Recruitment packs and offer letters should make it clear that any job offer is subject to satisfactory medical clearance.
• Pre-employment medical questionnaires should be detailed and ask several questions to ‘flush’ out any relevant aspects of the employee’s medical history and should include a ‘sweep up’ question about any reason the employee may not be fit for the job. 
• Pre-employment medical questionnaires should include a statement that the completion of the questionnaire is “to the best of the employee’s ability”, rather than the employee’s “belief or knowledge” as this can create a duty of care towards the employer.
• Employers should avoid falling foul of the Human Rights Act when carrying out investigations by taking steps such as restricting access to the employee’s office, changing locks and safeguarding the employee’s personal possessions.
• Employers should ask a third party to remove personal or legally privileged material from the employee’s email account and record this material to be returned to the employee.
• Ideally, the employer should inform the employee of the steps that it is taking to protect privacy before taking any action.

The judge ends his long and thorough judgment in hoping that the Council can get on with the business of governing Cheltenham and that Mrs Laird can get on with her life.  However, it does not close the door on this type of action being brought by employers. 

This case is likely to send disability discrimination alarm bells ringing.  Mrs Laird said in evidence that she was not disabled at the time of her recruitment.  Even so, the judge found that the Council would have breached the DDA, rather than appoint her because “this was too important a job...to take on someone with a significant impairment”.  

Rather than risk breaching the DDA, employers need to carefully consider reasonable adjustments where recruiting senior employees who disclose a medical history involving possible disabilities that raise concerns about suitability for the post.  Employers should pursue enquiries through occupational health services. If it appears that the employee may not be sufficiently robust to carry out the job, the employer may be able to argue that it would not be reasonable to make adjustments for its most senior managers to protect the employee from the harshness of life at the top, where this would have a detrimental effect on the leadership of the organisation.  The argument would be that any disability discrimination would be justified.  However this is a careful balancing act.