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Employment Law E-BulletinCasesThe fine line between resignation and dismissal The Sandhu v Jan de Rik Transport Ltd case is founded upon a very simple issue: was the appellant dismissed or did he agree to his own resignation? The case, however, presents much more complex circumstances. The appellant, Mr Sandhu, was not faced with a 'resign otherwise be dismissed' situation nor did he choose to resign rather than be subject to disciplinary procedures. Mr Sandhu attended a meeting with his employers, fully aware of the allegations against, and discussed his departure from the company and a financial package to accompany it. Claims for unfair dismissal would have been founded if Mr Sandhu had been dismissed outright, but the negotiations for a severance package cast an altogether different light on the case. The Respondent, Jan de Rijk Transport Ltd, is a Dutch company with its headquarters in Roosendaal in Holland, but with a number of offices throughout Europe. It is an international road transport operation, its core work being to transfer air cargo by road between European airports. Whilst not a major European conglomerate, the respondent is a substantial organisation, and, according to the appellant's statement before the Tribunal, employs a staff of approximately 130 people, together with some 300 drivers. The appellant was employed in the respondent's London office as an operations manager. He had held that post since 2000. Following allegations of misconduct and compromising the integrity of the company, the appellant was telephoned by Mr. Heeren's secretary, and told to attend a meeting with Mr. Heeren and Mr. Wijngaards in Roosendaal on Friday 6 December 2002. The allegations were not investigated and Ms Sandhu was not made aware what the meeting was concerned until his arrival. The opening comments of the meeting by Mr Heeren: "Your contract, we are going to finish it", imply that Mr Sandhu would be dismissed. However the terms of severance that were subsequently agreed appear to form a resignation agreement. The Tribunal concluded that, although the situation started off as a dismissal by Mr Heeren's statement, Mr Sandhu in fact left because of the favourable terms he negotiated. It was similar to where an enforced resignation becomes a voluntary one where an employee negotiates satisfactory financial terms and leaves because of them. The EAT has handed down an important decision in the case of GAB Robins v Trigg, dealing with a calculation for a compensatory award for a constructively dismissed employee who had been off work sick. The issue, on which there was no direct authority, was whether such an employee's loss of earnings has been caused by the constructive dismissal or, instead, caused by her long-term sick absence. The employer argued that since the employee had been off work for four months prior to her dismissal, her absence after the dismissal had not been caused by that dismissal. GAB Robins Ltd is a nationwide company specialising in loss adjustment. The Claimant, Ms Trigg, commenced employment at their Romford office on 6 September 1999; at the effective date of termination (EDT) of her employment, 15 March 2005, she worked as secretary/PA to the 2 investigators at that office, Messrs Carter and Woffindin. Ms Trigg shouldered an excessive workload; this was noted and reported by her colleague Mr Carter to Mr Baldock. . On 6 August 2003 the Claimant collapsed at home. Her doctor signed her off work for one week with stress. Although Mr Carter and Mr Woffindin continued to raise the matter with Mr Baldock she remained overworked. An audit report presented in February 2004 identified a need for a nominated assistant to help the Claimant with her workload; the Respondent provided none. Mr Baldock's treatment of Ms Trigg amounted to bullying as he was on occasions loud and abusive towards her. Her doctor signed her off sick with stress and depression, later diagnosed as anxiety and depression. No one from senior management contacted her; she became frightened to go out alone and spent time at home sobbing uncontrollably and sleeping for long periods. The Employment Tribunal pointed to the implied terms of mutual trust and confidence between the Employer and Employee, and they agreed that in this case the relationship had reached 'the final straw'. The Tribunal concluded that the Claimant had too much work and the Respondent did not aid her by ignoring the observations of Mr Carter. Moreover, the way in which Ms Triggs was treated by Mr Baldock increased the pressure she felt she was under, and he was not supportive to her in any way. All trust and confidence finally broke down when the Respondent quite simply failed to carry out an adequate and proper investigation into her grievances about her workload and the pressure she was under because of it and because of Mr Baldock's manner towards her. The manner in which Mr Baldock behaved towards Ms Triggs and in the procedures may be seen as victimisation. View full Bailii report Restrictive covenants clauses will need to be reviewed to ensure precision as a result of this case. Beckett Investment Management Group Ltd (BIMG) is the holding company within a group of companies (the Beckett Group) which provides financial services. Beckett Financial Services Ltd (BFS) is a subsidiary which provides advice and services to clients. Beckett Asset Management Ltd (BAM) is another subsidiary. Its purpose is to provide investment advice and management services. Mr Hall is an independent financial adviser, registered with the Financial Services Authority. His expertise is in the fields of investment advice and pensions. He had been employed within the Beckett Group for some years before entering into a contract with BIMG dated 1 January 2004. By that contract he was employed as Sales Director by BIMG. He was also a director of BFS and of BAM. He was based at the Leicester office of BFS. Mr Yadev is also registered as an independent financial adviser. His expertise is the provision of investment advice. He had been working within the Beckett Group for some time before 1 January 2004 but, on that date, he too entered into a new contract with BIMG. His status was that of financial consultant. He was based at the Leicester office of BFS. BIMG had no dealings with clients and provided no direct financial advice. All that was done by BFS. The contracts which Mr Hall and Mr Yadev had with BIMG contained identical clauses under the heading "Restrictions after Termination of Employment". On 28 April 2006 Mr Yadev submitted a letter of resignation to take effect on 31 May. It was addressed to Mr Hall, to whom Mr Yadev had indicated that he intended to establish his own business. At the time of receiving Mr Yadev's resignation, Mr Hall's own position was fluid and his employment with BIMG came to an end on 11 August 2006. Meanwhile, Mr Yadev had obtained a shell company called Trueway Finance Ltd which was incorporated on 8 June and on 24 July 2006 its name was changed to Hyrifa Ltd (Hyrifa). It was the vehicle through which Mr Yadev was to run the new business. On 14 August, Mr Hall joined Hyrifa. In the present litigation, BIMG, BFS and BAM have sought to establish that Mr Hall, Mr Yadev and Hyrifa have behaved unlawfully in the setting up and running of Hyrifa and have inflicted loss and damage on the claimant companies. Both men claim not to have acted in breach of the agreement; they state that the clients independently requested that the men act on their behalf. The 12 month non-solicitation clause in the agreement states that they cannot seek to deal with the Company's clients. Messrs Hall and Yadev argue that they did not seek to deal with clients, but clients sought to deal with them - a possibility not addressed by termination agreement. The terms 'deal' and 'client' were brought into contention, it was considered that 'deal' meant "do business with" and client meant "someone for whom for the time being the professional person is in any contractual relationship under which he is to provide some service". The Tribunal upheld the correctness of these constructions, but cast some doubt on the construction 'Prohibited Services'. It is defined in the agreement as 'of a type provided by the Company in the ordinary course of its business at the date of termination of the Employee's employment with it". However the Employment Tribunal accepted a different construction namely: 'of a type provided by the Company in the ordinary course of its business'. The "Company" being BIMG, and as BIMG was only a holding company, this freed Mr Yadev and Mr Hall to offer financial advice as they so wish. Back to lead article on 'without prejudice' |
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