Don't tread on me!

There were many ‘revelations' concerning Horkulak's alleged indiscretions, and not a few raised eyebrows following the £912,000 pay-out he duly received when the case was concluded.

In employment law terms, the case was something of a landmark for establishing standards to which all employers can now be expected to adhere, irrespective of work pressures and the industry involved. Security is not immune. Despite Cantor's recent (and successful) challenge in relation to the size of Horkulak's award, the subsequent heavy condemnation of management practices enforced by Cantor Fitzgerald remain valid to this day. Indeed, they will act as a useful ready-reckoner for every practising security manager.

Steven Horkulak began his career at Cantor Fitzgerald in 1997. Success in his initial role was rewarded with rapid promotion to the post of senior managing director come August 1999. Then, in 2000, Horkulak began to experience "difficulties" when dealing with Lee Amaitis, Cantor's chief executive and his immediate boss.

In Court, the Judge and the Jury heard all about Mr Amaitis' behaviour, which was alleged to have been volatile, domineering and somewhat extreme in nature. Apparently, Amaitis was given to shouting abuse at subordinates in order to express his displeasure, a reaction often well out of proportion to the issue involved at the time.

Horkulak claimed that Cantor had fundamentally breached his Contract of Employment due to the abuse and bullying he had suffered at the hands of his employer (in the shape of Lee Amaitis). To support this claim, he was able to rely on numerous serious incidents. Some of the most striking examples included the following occurrences:

l During a presentation given by Horkulak,

Amaitis shouted abuse at him. "It will never f*****g work" and "Get that s**t out of here". Eventually, Amaitis stormed out of the meeting in something of a rage...

• During a birthday party for Horkulak's daughter, Amaitis telephoned him and subjected his ‘subordinate' to a barrage of highly offensive swearing and verbal abuse. Amaitis even threatened to "break... [Horkulak] in two". His complaint concerned a bonus payable to another broker.

• On another occasion, Amaitis telephoned Horkulak while he was having luncheon with business colleagues to complain about brackets that had been left out of a schedule. He abused Horkulak, calling him a "stupid mother*****r", and used phrases such as: "What's this piece of s**t in front of me?"

Indeed, it was after this last incident that Horkulak left Cantor for good and subsequently sued the company for a breach of his Contract of Employment.

The Judge involved in the case found that Amaitis had - on behalf of Cantor Fitzgerald International - breached the terms of ‘mutual trust and confidence' that the law implies rests within every Contract of Employment, entitling Horkulak to resign and claim that he had (in effect) been dismissed. An occurrence perhaps better known as constructive dismissal.

The language of management

The Courts have long recognised that the use of foul or abusive language by a manager towards a member of staff can justify that member of staff resigning and subsequently claiming constructive dismissal. Depending upon the facts, even a single instance of abuse may be sufficient enough (fundamentally) to damage the relationship of mutual trust and confidence where the relationship needs to be one imbued with complete confidence.

Whether the term of mutual trust and confidence has been breached between an employer and employee due to the use of particular language has always been a largely subjective assessment based on all of the circumstances surrounding the relationship.

In the case of Horkulak, for example, the Judge rejected out of hand the suggestion that Amaitis' use of foul and abusive language could be justified in context. Foul language was common within the culture at Cantor. Nevertheless, the "frequent use of foul and abusive language did not", according to the Judge, "sanitise its effect". Nor did Horkulak's own use of similarly abusive language to another member of staff alter that conclusion. A modern view of the workplace must take account of the self-esteem and dignity an employee derives from his or her role. It now appears that abusive language towards a fellow employee which undermines that self-esteem cannot be justified, whatever the environment or type of job in question.

Stress-related disorders

Tribunals will take a dim view of managers who are put on notice of a wider problem with alcohol, but fail to address this as a medical issue. Where alcohol abuse is a longer term problem, tribunals normally expect an initially sympathetic approach towards employees who indicate an intention to improve

The wider principle from this case is that an abrasive and domineering management style - in whatever form - is likely to be viewed as bullying by the employee. The rise of stress-related psychiatric disorders at work means that the law now takes a broader view of employers' duty of mutual trust and confidence to their employees in order to protect the latter from "harsh and unacceptable employment practices".

For their part, employers also have a duty to preserve standards of dignity and respect towards their employees. If they fail to do so through a dictatorial style of management, they are likely to breach the term of mutual trust and confidence. A claim for constructive dismissal may then be justified.

Crucially, the Horkulak decision states that these minimum standards of dignity and respect apply irrespective of time pressures, work culture or other external factors. Cantor Fitzgerald tried to argue in the case that Amaitis' "direct" and "forceful" management style was appropriate to the industry in which he was working. Although the Judge accepted that an employer is entitled to set strict standards of performance, he rejected the idea that Amaitis' behaviour could be justified due to stress and pressure caused by the job, the senior position in the company occupied by Horkulak or the amount of money he was paid.

Alcohol abuse at work

Many employers assume that an employee attending for work under the influence of alcohol is committing one of the more obvious types of misconduct that justify summary dismissal. Mindful of the need to operate a safe system of work, employers assume that they are normally entitled to dismiss an employee who drinks at work in breach of company rules.

However, the law rarely takes such a black and white view of this issue. Indeed, employment tribunals tend to recognise that people turn to alcohol in moments of stress, and require their employer to look into the underlying reasons.

Mitigating circumstances will vary from case to case, but may include domestic or medical problems. A common underlying issue which tribunals expect employers to take into account is a problem with drink itself. Alcoholism is, of course, a disease, and wherever it is a consideration the arbitration service ACAS emphasises the need to treat the employee's condition as an illness.

To this end, the ACAS Handbook on Discipline and Grievances at Work states: "Consideration should be given to introducing measures to help employees - regardless of status or seniority - who are suffering from alcohol or drug abuse, or from stress. The aim should be to identify those employees affected, and then encourage them to seek help and treatment. For their part, employers should consider whether it is appropriate to treat the problem as a medical or a disciplinary matter."

An employee dismissed after refusing to make an effort to overcome alcoholism - or who fails to improve his or her behaviour and/or performance in the long term following assistance from their employer - is then much more likely to be dismissed fairly.

Addiction as a disability

While alcoholism is expressly excluded as a disability for the purposes of the Disability Discrimination Act 1995, those conditions which cause - or result in - alcoholism (such as clinical depression) can be disabilities. As such, employers need to be alive to the possibility that alcohol-related behaviour or performance issues (for example intermittent absence or unsatisfactory behaviour) may conceal a separate disability.

In summary, when dealing with an alcohol-related issue at work, employers and managers should bear in mind several points. First, if a strict prohibition on alcohol at work is necessary (for example, because of Health and Safety considerations) , it is vital that the reasons for this - and the associated penalties - are made clear.

Second, even where an employer normally operates a ‘zero tolerance' policy towards alcohol, automatically dismissing an employee without first looking into their background circumstances is a risky option. Consider whether mitigating factors such as serious domestic, familial or work-related problems presented by the employee are important, and therefore justify a penalty falling short of outright dismissal. If they include a wider background of alcohol dependence, you could obtain medical evidence and treat the matter (at the outset, at least) as a capability issue.

In addition, think about a separate policy for drugs and alcohol at work. Set down detailed, clear standards while differentiating between conduct issues and capability issues, and thereafter apply them consistently.

• Gareth Edwards and Clive Day are solicitors in employment law within the Human Resources Group at City firm Eversheds (www.eversheds.com)