Confidential Information Injunctions

The Court of Appeal has handed down a decision confirming that a (new) employer who fails to give suitably swift undertakings not to use confidential information which an employee brings over from his (old) employer should pay the costs of any injunction application.

The (old) employer, on discovering that the employee had gone to work for a competitor, asked for undertakings that the (new) employer would not encourage the employee to breach an express term of his contract relating to confidential information. The (new) employer ignored the first letter and, in response to a second letter, simply wrote back and said it was investigating the position (without giving any undertaking). The (old) employer then issued an application for an injunction, following which the (new) employer gave an appropriate undertaking.

The Court of Appeal, overturning the judge, held that the (old) employer should be entitled to the costs of the injunction application in these circumstances. The (old) employer had effectively won the case by obtaining the undertakings. The judge's refusal to award costs was erroneous as a matter of principle.

The case provides comfort to those advising employers of departing employees, demonstrating that they can act swiftly and be confident that they will not be penalised in costs.

[Thanks to Neil Russell of BD Laddie, who acted for the successful Appellant, for telling me about this decision]

Fox Gregory v Spinks

Tribunal Award Limits - Annual Increases

The Employment Rights (Increase of Limits) Order 2006 has been laid before Parliament, containing the increase in limits to tribunal awards which come into force on 1st February 2007.

The key increases are as follows:

* compensatory award for unfair dismissal - £60,600 (from £58,400)

* a week's pay (for basic award, redundancy payments etc.) - £310 (from £290)

The Employment Rights (Increase of Limits) Order 2006

Local Authority Pensions

Michael Duggan from Littleton Chambers has Emailed me to point out another important set of Regulations dealing pensions. As I can't face doing my own summary, I simply reproduce his Email (with his permission)..

From: Michael Duggan
Sent: 17 November 2006 11:18
To: Daniel Barnett
Subject: Pensions and Age Discrimination

Dear Daniel,

Further to you newsletter this morning - there are also little publicised changes to local government pension schemes which will have an important impact on many thousands of people. As you know, one of the attractions of local government is that you get a decent pension and if you leave early, in some circumstances you get added years. The Government was initially doing away with the discretion in this respect but have now put in transitional provisions so that anyone made redundant before 1st April 2007 and who would have qualified under the 2000 regs will now be able to argue that the LA should exercise its discretion in their favour (and there appear to me to be strong arguments that, if they have always awarded added years, custom and practice etc applies).

Councils are still going to be able to make an award of added years by way of augmentation. The new regulations also provide that they need to have a written policy on how they will exercise their discretion. LAs will no doubt argue that, once the transitional provisions disappear after April 2007, it is likely to be discriminatory to award added years.

The upshot is that people who have worked for many years in Local Government are having benefits taken away from them by virtue of regulations which will benefit one group (however defined) on the basis of age but will actively disadvantage the older worker with many years of service.

Further, how does this all fit in with Schedule 5 of the Age Regs which appears to preserve existing rights; See Schedule 5 paragraph 9 -surely one of the most obscurely drafted provisions ever.

Since LAs must now have a written policy there are going to some interesting issues that arise as to how it will interact with the Age Regs. I would be interested in any views about what LAs can now do with regard to added years, what the policy should contain and what is happening 'on the ground'.

If you can bear to look at them the pension Regs are here: THE LOCAL GOVERNMENT (EARLY TERMINATION OF EMPLOYMENT) (DISCRETIONARY COMPENSATION) REGULATIONS 2006 S1 2006/2914

Michael

Unfair Contract terms act and Unreasonable Bonuses

The Court of Appeal has handed down an important decision in Commerzbank AG v Keen. It is important for two reasons.

First, section 3 of the Unfair Contract Terms Act 1977 does not apply to employment contracts. The point arose because the employer, a City bank, relied on a clause providing that the employee had to be in employment as at the date of the bonus to receive any bonus. The employee argued that such a clause amounted to an unreasonable exclusion clause seeking to avoid paying remuneration on a 'value received' basis for work done during the year.

At paragraph 101 of the lead judgment of Mummery LJ it says that as a matter of principle and construction it cannot be argued that under a term for remuneration (in this case a bonus payment), the employee "deals as a consumer" with their employer for the purposes of s3 of UCTA. To extend s3 to payment provisions in respect of personal services rendered by an employee would be inappropriate, artificial and unconvincing. The terms were not the standard terms of the business of banking, rather they were the terms of remuneration of certain employees of the Bank. Mummery LJ described the existing EAT authority on this point, Bridgen v American Express as "not entirely satisfactory" and "not binding on this court."

Secondly, and importantly, Mummery LJ also considered (at paras. 58-60) the hurdles an employee must surmount to show that a bank's discretionary bonus decisions were irrational or perverse. The burden was on the claimant to establish that no rational bank in the City would have paid him a bonus of less than his line manager recommended. He would also be expected to present independent evidence, expert or otherwise, supporting his claim.

Kommerzbank AG v Keen

Age Discrimination: Pensions Exemptions

Calm down everyone. The Employment Equality (Age) (Amendment No.2) Regulations 2006 have been laid before Parliament.

Coming into force in just a fortnight (1st December 2006), the regulations make substantial amendments to Schedule 2 of the main Age Regs. They clarify and extend many of the exemptions relating to trustees and managers of pension schemes.

Sorry - just paused a moment to yawn. Anyway, carrying on, it's always nice to see the government complying with the Cabinet Office's Better Regulation Guidelines (which say that companies should have a minimum of 12 weeks to comply with new regulations). Still, it's not like we haven't known age laws were coming since 2000...

And if anyone is still reading, the CBI have hailed these amendments as a great victory for common sense - see their press release.

The Employment Equality (Age) (Amendment No.2) Regulations 2006

Statutory Grievance Procedures: Time Limits

A great description by a High Court Judge of the 2004 procedures as "rebarbative" (go on, look it up here!).

In this case, the EAT rejected the argument that the three-month extension of time following sending a grievance does not engage if the grievance is sent before the effective date of termination.

Curiously, the argument is technically correct (if you suffer from a virulent strain of pedantry). But the result is absurd, and the EAT had no hesitation in dismissing the appeal. Underhill J. held that the extension of time for presenting a claim arises even when the grievance is lodged before the effective date of termination, and therefore not technically 'within the normal time limit'.

Curiously, the point arose in two cases on which judgment was handed down by the same judge on the same day. The main case is HM Prison Service v Barula, and the reasoning was affirmed then in Lewisham v Colbourne

DDA: Reasonable Adjustments on Redundancy

The Court of Appeal has handed down its decision in NTL Group Ltd v Difolco.

Mrs Difolco, who was partially paralysed and could only work part-time, was made redundant. She was offered the chance to apply for another job as being suitable alternative employment. This other job was advertised on a full-time basis but she was told that (should she be appointed) the employer would consider changing the role to part-time. However, she refused to apply unless the job was changed to part-time before she applied.

She claimed that by failing to convert the job to part-time, the employer had failed to make reasonable adjustments.

The Court of Appeal, disagreeing with the EAT, held that this could not amount to a failure to make reasonable adjustments. Until Mrs Difolco had applied for the job, no duty to make reasonable adjustments arose. As Laws LJ said: "If the mere fact of advertising for a full-time job can constitute an 'arrangement' for the purposes of the DDA then on the face of it it would potentially discrimination against the whole innominate class of possible disabled applicants for the job. That, it may well be thought, would be a reductio ad absurdum." (para. 13)

NTL Group v Difolco

New DTI Guide: Rights and Responsibilities of Employees

It's competition time...

The DTI has published a new 96- page guide for both employers and employees, entitled 'Rights and Responsibilities of Employees'.

It is an extremely impressive summary of employment law: comprehensible, thorough and written in plain English. View it here:
http://www.dti.gov.uk/files/file34565.pdf

So, who can do better? Why not send me your suggestions for 'rights and responsibilities for employees'. Who knows, I might even publish the most amusing...

Flexible Working for Carers

The DTI has, this morning, announced who will qualify as a 'carer' under the new right for carers to request flexible working (coming into force on 6th April 2007 under the Work and Families Act 2006).

The definition of 'carer' will cover any employee who is or expects to be caring for an adult who:

• is married to, or the partner or civil partner of the employee; or
• is a 'near relative' of the employee;
• falls into neither category but lives at the same address as the employee.

The 'near relative' definition includes parents, parent-in-law, adult child, adopted adult child, siblings (including those who are in-laws), uncles, aunts or grandparents and step-relatives. The DTI estimates that this definition will cover about 80% of carers.

View DTI Press Release

[Thanks to Eugenie Verney for telling me about this press release]

Non-compliance with Statutory Dismissal Procedure

The EAT has held that there is no free-standing right to bring a claim before a tribunal for breach of the statutory procedures.

The Claimant lacked the one-year qualifying period for claiming unfair dismissal. Nevertheless, he argued that he could bring a claim for breach of the statutory dismissal procedure, as contained in the Employment Act 2002. HHJ McMullen QC upheld the tribunal's decision to strike out his claim.

This decision is plainly correct and one would have thought relatively uncontroversial. However, the surprising number of times one sees Claimants running this argument in correspondence makes this case a useful piece of ammunition in rebuttal.

Scott-Davies v Redgate Medical Services

Collective Redundancies and Protective Awards

In an important decision, the EAT (Burton J. presiding) has held that employees who are not of a description in respect of which a trade union is recognised by their employer are not entitled to 'cash in' on a protective award obtained by the union.

Recognising that allowing such employees to obtain the benefit of a protective award would be a more elegant (and less litigious) alternative to requiring them to bring their own individual tribunal claims under TULR(C)A s189, Burton J. held that the wording of ss188 and 189 did not allow such employees to rely on the protective award obtained by a recognised trade union.

As this case involved an untested (and important) point, permission has been given to appeal to the Court of Appeal. It is. however, unclear whether any appeal will in fact take place as the amounts of money involved do not appear large and the EAT has strongly encouraged settlement.

TGWU v Brauer Coley (in administration)

New from ACAS - Sexual Orientation

Acas has just launched its eight e-Learning packgake - this one on Sexual Orientation. The course focuses on:

• defining sexual orientation and gender reassignment
• explaining the legal aspects of the sexual orientation Regulations
• explaining how the Regulations affect recruitment and existing employees
• exploring issues around gender identity

... and finishes up with a quiz so you can see how much you have learned. You can also find a sexual orientation audit tool on the Acas website.

Acas E-Learning Guides