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Budget News – reversal of changes to High Net Worth Individual and Self-certified Sophisticated Investor criteria

As highlighted in our recent news release, with effect from 31 January 2024, the government updated the exemptions which allow shares and other financial instruments to be marketed to High Net Worth Individuals and Self-certified Sophisticated Investors without the regulatory protections provided by the financial promotion regime.

Telling jokes in an office environment can be an important tool to creating a positive working environment.  “Research shows that leaders with any sense of humor are seen as 27% more motivating and admired than those who don’t joke around. Their employees are 15% more engaged, and their teams are more than twice as likely to solve a creativity challenge — all of which can translate into improved performance“ (Harvard Business Review).

But laughter can be insensitive, and a joke can be offensive.  If the above joke was aimed at a disabled employee regularly late for work because of their disability, and it was part of regular pointed references, they could feel that they were being victimised.

The potential difficulties for an employer are even more fraught when the office culture uses teasing and banter.  In 2018, a claim came before an Employment Tribunal  where the Claimant said that derogatory remarks had been made about him by his colleagues.  In order to succeed under the Equality Act, he would have to show that he had been subjected to unwanted conduct related to a protected characteristic such as race, sex or disability and that the unwanted conduct had the purpose of effect of violating his dignity or creating an environment that was intimidating, hostile, degrading, humiliating or offensive.

The derogatory remarks were based on the fact that the Claimant was overweight and had some links to the travelling community.  As the Claimant had failed to adduce evidence that his weight was connected to a disability, that left the Claimant’s allegations of race related harassment.

The Tribunal determined that the office culture was one where teasing and banter was common and, indeed, the Claimant himself would often reply in kind. The Tribunal found that such behaviour appeared to be accepted and treated as normal within the office, which the Tribunal described as “indiscriminatingly inappropriate.” The Tribunal decided that harassment within the meaning of the Equality Act had not been established. The Employment Appeal Tribunal (EAT) agreed. Whilst the comments made about the Claimant were plainly “derogatory, demeaning, unpleasant and potentially discriminatory”, that did not mean that the test for harassment was made out.  The EAT referred to an earlier decision in which the Judge stated, “Dignity is not necessarily violated by things said or done which are trivial or transitory, particularly if it should have been clear that any offence was unintended.”

The Claimant had been an active participant in the culture of banter, he had not been offended and the comments did not have the purpose of violating his dignity or creating an intimidating environment for him.

Contrast this with a 2015 decision where the Tribunal found that there was a culture of sexual banter and sexual behaviour in the workplace in which both the Claimant, Miss Smith and her manager actively participated. It concluded that Miss Smith was not shocked by the day-to-day banter between colleagues, and this did not go too far. However, it found that the comments made by her manager did go too far and the type of personal innuendo and questioning he engaged in was offensive to her and constituted unwanted conduct. While the Tribunal found that Miss Smith was relatively robust and not adverse to participating in, or even initiating, sexual banter, the conduct and comments of her manager went beyond what was acceptable to her.

The Tribunal took into account that it would be harder for Miss Smith to deal with and complain about the behaviour of her manager than that of her other colleagues. It also noted that, where a culture of sexual banter exists in a male dominated industry and is actively condoned by a male manager, a female employee may feel compelled to join in as a coping mechanism and not obviously take offence at language and conduct that they otherwise would find demeaning.

The Runnymede Trust, in partnership with the Fawcett Society, published a report in May 2022 on the workplace experiences of over 3,000 women from ethnic minority backgrounds categorised in the report as “women of colour”. It found that 75% of women of colour reported having experienced one or more forms of racism at work ranging from “banter” about ethnicity or culture, surprise at their ability to speak English and micro-aggressions such as repeated mispronunciation of their name or outright racial slurs.

Jokes and office banter can help to create a positive working environment but, if the end result is that an employee feels humiliated and demeaned, their whole purpose has been undermined.  Much safer for employers to find other ways of creating a positive working environment.

About the authors


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Nick Williams

Partner

Expert lawyer in flotations, fundraising, mergers and acquisitions, investment, corporate restructuring and governance.

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