Off the record is best

As well as being entertaining, the case raises interesting issues that face many people who fall out with their employer. One is whistle-blowing.

Middleweek is unlikely to be the last employee in the City of London to allege that his company is up to no good.

Anyone who goes down this route will usually have to manage their exit from the company at the same time.

Even if they are not sacked, their position will probably become untenable, so it is crucial to adopt the right tactics. One employment solicitor, who did not want to be named as his firm is involved in the Middleweek case, says an employee should usually go to great lengths to keep the alleged wrongdoing totally separate from negotiations about a pay-off for leaving.

This may be artificial, but it allows the employee to adopt an air of injured innocence if accused of blackmail (as Middleweek was). Of course, there is no link between the two, an employee can say. Both sides may in some situations know this is nonsense, but nothing can be proved.

Sometimes lawyers advise employees to merely drop hints about the wrongdoing that worries them, rather than making a formal allegation. That way the employer might give them a large pay-off in the tacit hope that they will drop the matter. Again, no connection can be proved. There is then nothing to stop the employee making his allegations about wrongdoing if he wants to.

An employer must also be careful about agreeing to a pay-off, even if it is genuinely unrelated to a whistleblowing threat.

There is a danger it might look like a quid pro quo for the employee's silence and the employer might then find themselves unfairly accused of bribery.

Bank staff in the UK should also consider where they stand with the Financial Services Authority (FSA).

An FSA spokesman says while there is no formal requirement for an employee to report a breach of FSA regulations by their employer, there is an "expectation" that they will do so.

Another interesting feature of the Middleweek case is covert tape-recording of a conversation. This looks like a useful tactic, but it should be used with care. John Keith, a solicitor at the law firm Lovells, says it could be a breach of the Data Protection Act for either an employer or employee to secretly record a conversation with the other party (or their lawyers, as in the Middleweek case), unless they have grounds to suspect criminal activity.

So an employee who records a conversation with their boss simply to demonstrate unfair treatment could find themselves legitimately facing disciplinary proceedings, or theoretically a criminal prosecution.

Then there is the practical point that such behaviour can look underhand unless there is a good reason for it. Anyone who does it risks losing the sympathy of a court or tribunal, if it decides to admit the tape as evidence at all.

Kate Brearley, a partner at the law firm Stephenson Harwood, says covert recording might also be a breach of human rights legislation.

Nevertheless, she believes it may be becoming more common in employment disputes. Another solicitor says an investment banker client who is planning to sue his employer never goes to work these days without a tape-recorder in his pocket.

If this catches on, it may be because tape-recorders are cheaper, smaller and more effective than they used to be. A shop assistant at Dixons, the electronics retailer, recommends a digital Olympus recorder, 3" (7.5cms) long and costing 80 (€114), as an ideal device for recording conversations with someone a few feet away, while lying concealed in the owner's pocket.

I tested it (though not in my office) and it works perfectly.

It may not be long before both sides in any employment dispute will have to assume that the other is recording their every word. One way round this could be to demand written (or tape-recorded?) confirmation that they are not doing so.