Salary information and confidentiality

Jagex Ltd v McCambridge

There is no implied term that salary details are confidential.

Background

Mr McCambridge found a document that had been left all day on the communal office printer which contained the salary of a senior employee and told a few colleagues about it. Unbeknown to Mr McCambridge, other members of staff also heard about this and it became the subject of office gossip. Although he was not responsible for any wider dissemination of the information, it was embarrassing for the employer when the level of the executive’s pay became more generally known in the office. There were no contractual provisions preventing discussion of pay but Mr McCambridge’s contract contained a relatively standard confidentiality clause. Mr McCambridge was one of three staff disciplined for disclosing this information. He was dismissed for gross misconduct (described as ‘unauthorised disclosure or misuse of confidential information’), notwithstanding an unblemished record. The other two employees (including someone more senior) had lesser disciplinary sanctions imposed on them. Among the claims which Mr McCambridge brought was one for wrongful dismissal (i.e. that his dismissal had been in breach of contract). A tribunal held that Mr McCambridge had not breached any express contractual term and nor did his actions amount to gross misconduct in common law. His employer appealed.

EAT decision

The employer’s appeal on this point was dismissed.

There was no express term of the contract that salary information was confidential, and nor could it be implied into the contract. For salary details to fall within a contractual confidentiality clause, it needs to be specified – it’s not information whose quality is by its essence confidential they said:

'Salary is not listed amongst the many specific examples of what is considered confidential. Is salary confidential? There is no universal answer – company law requires disclosure of directors' pay; many public sector salaries are in the public domain, e.g. the judiciary; where there is collective bargaining pay rates are generally known and published, as indeed they are in many private sector employers where formal pay structures exist, and starting salaries are often advertised in recruitment literature. But some employers are less transparent and open about pay and do not publish pay rates. Some have specific contractual provisions identifying pay and salary as a confidential matter. It cannot be implied into the contract that salary details are confidential and falls far short of the business efficacy, officious bystander or necessity test (emphasis added)’.

Even if it was wrong in this regard, the EAT said that the tribunal was entitled to find that even if there had been a breach of contract, it was not serious enough to amount to gross misconduct.

Link to judgment: https://www.bailii.org/uk/cases/UKEAT/2019/0041_19_1109.html

Comment

There is a balancing act for employers as the Equality Act 2010 makes it unlawful to prevent employees from having discussions with other employees to establish if there are differences in pay. However, an employer can require its employees to keep pay rates confidential from people outside of the workplace. Any confidential clause would have to be carefully worded.