The draft Employment Tribunals Act 1996 (Composition) Order 2012 has been published, expected to come into force on 6th April 2012.
It enables (as the presumed default) employment judges to sit alone in unfair dismissal cases - all part of the process of speeding up and reducing the cost of the tribunal system.
Here's a post I wrote a year ago on the issue of tribunal judges sitting alone.
Thursday, 16 February 2012
Wednesday, 15 February 2012
Compromise Agreements under the Equality Act 2010
Remember the furore over the drafting of s147 of the Equality Act 2010? Can certain compromise agreements ever be valid? Does the drafting of s147 preclude a complainant's lawyer from being an 'indepedent adviser'? Two top employment law QCs couldn't agree (see here for their Advices), although DBIS insisted there wasn't any problem.
Well, we can all sleep safely in our beds now. The Equality Act 2010 (Amendment) Order 2012, coming into force on 6th April 2012, amends s147 to remove the controversy.
A slightly anti-climactic ending, but there's not much else to say.
Well, we can all sleep safely in our beds now. The Equality Act 2010 (Amendment) Order 2012, coming into force on 6th April 2012, amends s147 to remove the controversy.
A slightly anti-climactic ending, but there's not much else to say.
Restrictive Covenants
What does "solicitation" mean in a post termination non solicitation clause?
In Towry EJ Limited v Barry Bennett and others, in a 350 page judgment handed down today Mrs Justice Cox held that it should be generally defined as meaning if an employee "directly or indirectly request[s], persuade[s] or encourage [s] clients of their former employer to transfer their business to their new employer" (para 440)
So far, so straightforward. However, how can an employer actually show that a former employee has solicited former clients in breach of a non solicitation clause? Can this solicitation be inferred only from the fact that a "tidal wave" of clients have moved across to the business where the old employees now work where there is no primary evidence of requesting, persuasion or encouragement by those employees?
In Towry, Mrs Justice Cox's answer was "no". The Claimnt was not able to show that those clients had not moved across out of a sense of loyalty towards their former employee rather than due to request/persuasion/ encouragement (para 884).
Mrs Justice Cox did not hold that a wholly inferential case would have been impossible (see para 893-4) just that the burden of proof rests firmly on the employer - who was placed in the unenviable position of cross examining a catalogue of its former clients.
This case demonstrates the key difference in strength between a "non dealing" post termination restriction and a significantly less strong "non solicitation clause". Had the employees had non dealing clauses in their contracts, their conduct would have been straightforwardly unlawful.
In Towry EJ Limited v Barry Bennett and others, in a 350 page judgment handed down today Mrs Justice Cox held that it should be generally defined as meaning if an employee "directly or indirectly request[s], persuade[s] or encourage [s] clients of their former employer to transfer their business to their new employer" (para 440)
So far, so straightforward. However, how can an employer actually show that a former employee has solicited former clients in breach of a non solicitation clause? Can this solicitation be inferred only from the fact that a "tidal wave" of clients have moved across to the business where the old employees now work where there is no primary evidence of requesting, persuasion or encouragement by those employees?
In Towry, Mrs Justice Cox's answer was "no". The Claimnt was not able to show that those clients had not moved across out of a sense of loyalty towards their former employee rather than due to request/persuasion/ encouragement (para 884).
Mrs Justice Cox did not hold that a wholly inferential case would have been impossible (see para 893-4) just that the burden of proof rests firmly on the employer - who was placed in the unenviable position of cross examining a catalogue of its former clients.
This case demonstrates the key difference in strength between a "non dealing" post termination restriction and a significantly less strong "non solicitation clause". Had the employees had non dealing clauses in their contracts, their conduct would have been straightforwardly unlawful.
Friday, 10 February 2012
Correction: Draft SI for Increasing Qualifying Period
Hopefully everyone spotted the deliberate (ahem) error in the bulletin an hour ago. The unfair dismissal qualifying period is increasing to two years, not one year. Corrected version below...
The draft Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 have been published.
In a nutshell, for all employees employed on or after 6th April 2012, the qualifying period for unfair dismissal (and requests a statement of reasons for dismissal) increases to two years. Employees whose period of continuous employment began on or before 5th April 2012 will still be subject to the one year qualifying period.
The draft Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 have been published.
In a nutshell, for all employees employed on or after 6th April 2012, the qualifying period for unfair dismissal (and requests a statement of reasons for dismissal) increases to two years. Employees whose period of continuous employment began on or before 5th April 2012 will still be subject to the one year qualifying period.
Draft SI for Increasing Qualifying Period
The draft The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 have been published.
In a nutshell, for all employees employed on or after 6th April 2012, the qualifying period for unfair dismissal (and requests a statement of reasons for dismissal) increases to two years. Employees whose period of continuous employment began on or before 5th April 2012 will still be subject to the one year qualifying period.
In a nutshell, for all employees employed on or after 6th April 2012, the qualifying period for unfair dismissal (and requests a statement of reasons for dismissal) increases to two years. Employees whose period of continuous employment began on or before 5th April 2012 will still be subject to the one year qualifying period.
Discrimination - Christian Beliefs v Gay Rights
The Court of Appeal has confirmed that Christian hotel owners Mr & Mrs Bull discriminated against civil partners Messrs Preddy & Hall by refusing to allow them to share a double-bed.
The Chymorvah Hotel in Cornwall operated a strict policy refusing double bedrooms to unmarried couples. Upholding the County Court's decision, the Court of Appeal held that the Claimants - having undergone a civil partnership ceremony - should be treated the same way as a married couple, and the only reason they were treated differently was because they were gay.
Of interest is the Court's decision to reject Mr & Mrs Bull's Article 9 argument, ie that the 'no unmarried couples' policy was simply a manifestation of their religious belief. The Court held that if they chose to run a business, they had to run it in accordance with the law - which includes an obligation not to discriminate against potential customers on grounds of their sexual orientation.
The Chymorvah Hotel in Cornwall operated a strict policy refusing double bedrooms to unmarried couples. Upholding the County Court's decision, the Court of Appeal held that the Claimants - having undergone a civil partnership ceremony - should be treated the same way as a married couple, and the only reason they were treated differently was because they were gay.
Of interest is the Court's decision to reject Mr & Mrs Bull's Article 9 argument, ie that the 'no unmarried couples' policy was simply a manifestation of their religious belief. The Court held that if they chose to run a business, they had to run it in accordance with the law - which includes an obligation not to discriminate against potential customers on grounds of their sexual orientation.
Wednesday, 8 February 2012
Unfair Dismissal - Territorial Jurisdiction
[Thanks to Rosa Dickinson of St Philips Chambers for preparing this case summary]
Is failing to be within one of Lord Hoffmann's three categories of employees who fall within the jurisdiction of employment tribunals (as per Lawson v Serco) fatal to a claim for unfair dismissal? No, according to the Supreme Court in the case of Ravat v Halliburton Manufacturing and Services Limited.
The question in every case is whether the right not to be unfairly dismissed applies to the particular case notwithstanding its foreign elements. Tribunals should assess whether the connection with Great Britain is strong enough to overcome the general but not absolute - rule that the place of employment is decisive. This will be a question of fact and degree. In this case, Mr Ravat (who was based in Libya) did not fall within any of Lord Hoffmann's 3 categories but his claim did fall within the tribunal's jurisdiction as there was a stronger connection with Great Britain than with Libya. This was due to factors such as Mr Ravat residing in the UK and getting his travel expenses paid, and his salary being paid in Sterling to a UK bank account.
Is failing to be within one of Lord Hoffmann's three categories of employees who fall within the jurisdiction of employment tribunals (as per Lawson v Serco) fatal to a claim for unfair dismissal? No, according to the Supreme Court in the case of Ravat v Halliburton Manufacturing and Services Limited.
The question in every case is whether the right not to be unfairly dismissed applies to the particular case notwithstanding its foreign elements. Tribunals should assess whether the connection with Great Britain is strong enough to overcome the general but not absolute - rule that the place of employment is decisive. This will be a question of fact and degree. In this case, Mr Ravat (who was based in Libya) did not fall within any of Lord Hoffmann's 3 categories but his claim did fall within the tribunal's jurisdiction as there was a stronger connection with Great Britain than with Libya. This was due to factors such as Mr Ravat residing in the UK and getting his travel expenses paid, and his salary being paid in Sterling to a UK bank account.
Team Moves and Springboard Injunctions
[Thanks to Katherine Appsof Littleton Chambers for providing this case summary]
Harry Potter, Bat Phones, Fantasy Football and Three bells on the fruit machine; unlikely facts for a team move case but all feature in QBE Management Services (UK) Ltd v Dymoke and others. The Claimant succeeded in obtaining, after an expedited trial, 'springboard' relief to restrain three former employees and their financial backer from commencing a competing business. The case is believed to be the first example of springboard relief being granted as final relief on the basis of breach of fiduciary duty and breaches of an employee's duty of fidelity. In addition to injunctive relief, QBE also recovered damages and indemnity costs.
The Judgment is a useful 'one stop shop' for the legal principles which apply in team move cases. Mr Justice Haddon-Cave undertakes an extensive review of the case law in particular on the duty to self report or to report the misconduct of others (see paras 169-216). He additionally considers the extent of the relief that may be granted to neutralise a springboard advantage. Eight principles of springboard relief are distilled at paras 239-247; these are analysed at 248-294.
Mr Justice Haddon-Cave found that two employees, one of whom owed fiduciary duties, had solicited a third and planned a competing business which would "rip the heart" of out of part of QBE's marine insurance business. Confidential information was used in order to garner financial support for an external backer. The eventual plan involved the use of an external recruitment agent which the cour found to have been a sham to conceal the solicitation of fellow employees.
Harry Potter, Bat Phones, Fantasy Football and Three bells on the fruit machine; unlikely facts for a team move case but all feature in QBE Management Services (UK) Ltd v Dymoke and others. The Claimant succeeded in obtaining, after an expedited trial, 'springboard' relief to restrain three former employees and their financial backer from commencing a competing business. The case is believed to be the first example of springboard relief being granted as final relief on the basis of breach of fiduciary duty and breaches of an employee's duty of fidelity. In addition to injunctive relief, QBE also recovered damages and indemnity costs.
The Judgment is a useful 'one stop shop' for the legal principles which apply in team move cases. Mr Justice Haddon-Cave undertakes an extensive review of the case law in particular on the duty to self report or to report the misconduct of others (see paras 169-216). He additionally considers the extent of the relief that may be granted to neutralise a springboard advantage. Eight principles of springboard relief are distilled at paras 239-247; these are analysed at 248-294.
Mr Justice Haddon-Cave found that two employees, one of whom owed fiduciary duties, had solicited a third and planned a competing business which would "rip the heart" of out of part of QBE's marine insurance business. Confidential information was used in order to garner financial support for an external backer. The eventual plan involved the use of an external recruitment agent which the cour found to have been a sham to conceal the solicitation of fellow employees.
Monday, 6 February 2012
Employment Status
[Thanks to Jahad Rahman of Kervin & Barnes Solicitors for preparing this case summary]
Were 'Leaders' engaged to conduct Weight Watchers meetings employees of Weight Watchers Ltd for the purposes of PAYE and NI contributions?
Yes, says the Upper Tribunal (Tax and Chancery Chamber) in the case of Weight Watchers (UK) Ltd v HMRC.
In this case, Leaders engaged by WWUK signed contracts describing themselves as independent contractors and not the servant of Weight Watchers. They were required to pay their own tax and national insurance. The Leaders were only paid if they personally conducted their own meetings and they were required to obtain WWUK's specific approval in relation to time, date and place of any meetings. Although the contract contained an express substitution clause, the Leaders were obliged to find a suitably qualified replacement if they did not want to lead a meeting.
The Upper Tribunal dismissed WWUK's appeal and concluded that the Leaders were employees of WWUK rather than self employed contractors. The Upper Tribunal held that the Leaders were required to provide their services personally and that WWUK imposed a high degree of control as they were required to follow WWUK's programme and expected to turn up and conduct the meetings at a certain time and place each week.
Whilst WWUK had written a 'substitution clause' into the contracts, the Upper Tribunal adopted a purposive interpretation of the contracts in accordance with the decision of the Supreme Court in the case of Autoclenz v Belcher and concluded that in reality, the right to substitute was "fettered" because the Leaders were required to find a suitably qualified replacement and show good reason for proposing not to take a meeting.
Were 'Leaders' engaged to conduct Weight Watchers meetings employees of Weight Watchers Ltd for the purposes of PAYE and NI contributions?
Yes, says the Upper Tribunal (Tax and Chancery Chamber) in the case of Weight Watchers (UK) Ltd v HMRC.
In this case, Leaders engaged by WWUK signed contracts describing themselves as independent contractors and not the servant of Weight Watchers. They were required to pay their own tax and national insurance. The Leaders were only paid if they personally conducted their own meetings and they were required to obtain WWUK's specific approval in relation to time, date and place of any meetings. Although the contract contained an express substitution clause, the Leaders were obliged to find a suitably qualified replacement if they did not want to lead a meeting.
The Upper Tribunal dismissed WWUK's appeal and concluded that the Leaders were employees of WWUK rather than self employed contractors. The Upper Tribunal held that the Leaders were required to provide their services personally and that WWUK imposed a high degree of control as they were required to follow WWUK's programme and expected to turn up and conduct the meetings at a certain time and place each week.
Whilst WWUK had written a 'substitution clause' into the contracts, the Upper Tribunal adopted a purposive interpretation of the contracts in accordance with the decision of the Supreme Court in the case of Autoclenz v Belcher and concluded that in reality, the right to substitute was "fettered" because the Leaders were required to find a suitably qualified replacement and show good reason for proposing not to take a meeting.
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