Employment Law Matters

1. Constructive Dismissal: Last Straw

Williams v Alderman Davies Church in Wales Primary School - the EAT held that a claim for constructive dismissal could succeed despite the last act complained of being ‘entirely innocuous’. The final straw may have contributed to the decision to resign even though in and of itself it was harmless. So long as there has been previous conduct which amounts to a fundamental breach, [the breach has not been affirmed], and the employee resigns at least partly in response to it, constructive dismissal is made. That is so, even if other more recent (and innocuous) conduct (the last straw) also contributed to the decision to resign.

2. Wrongful dismissal and length of service

East Coast Main Line Company Ltd v Cameron - Is an employee's length of service relevant to the question of whether they have been wrongfully dismissed? No.

The claimant had been employed by the respondent since 1981. In late 2015 he was involved in a serious safety incident. An investigation concluded that he had failed to carry out adequate safety checks and he was summarily dismissed in April 2016. The claimant brought claims for discrimination, unfair dismissal and wrongful dismissal. The tribunal upheld his wrongful dismissal claim, placing weight on the fact that he had been employed for a considerable length of time. The Respondent successfully appealed that decision.

The EAT held that the tribunal was wrong to have relied on the claimant's length of service as a factor in determining whether the claimant had been wrongfully dismissed – it held that he had not.

3. Restrictive covenants and garden leave

Square Global Limited v Leonard - Is the absence of a garden leave set-off clause fatal to a non-compete clause? No.

The High Court held that a garden leave clause without a provision for set off against the duration of a non-compete clause did not prove fatal to the enforceability of the latter.

The Claimant resigned on 19th November 2019 with immediate effect. The Court accepted that he was in breach of a six-month notice period, during which the employer could put him on garden leave and require him not to perform any work. A non-compete clause then applied for a further six months. The absence of any provision for a set-off between any period of garden leave and the period of time during which any non-compete covenant would apply did not (on the facts of the case) render the six-month non-compete clause void as unreasonable.

4. Breaching a COT3 confidentiality provision

Duchy Farm Kennels v Steels - Can an employer avoid paying out on a settlement if an employee breaches a confidentiality clause? Not necessarily.

The County Court held that the 'boilerplate' confidentiality clause in a COT3 was not a condition of the contract, so a breach would not have permitted the employer to avoid paying up. The High Court noted that a confidentiality clause could be expressly made a condition of a COT3, particularly if confidentiality was the significant benefit that the employer got under the settlement (rather than avoiding a tribunal claim), but labelling the term a 'condition' would not automatically make it one.

5. TUPE: Changing terms and conditions

Ferguson and ors v Astrea Asset Management Ltd - Are contract variations beneficial to an employee void if made by reason of a TUPE transfer? Yes, if made by the transferor.

The Claimants were directors of a company which lost an estate management contract. Prior to the service provision change, they varied their own contracts to give themselves generous bonuses and termination payments. When the transferee discovered this shortly before the transfer, it refused to allow some of the claimants to transfer and dismissed the others for gross misconduct. The EAT held that, although these changes were beneficial to the claimants, they were void because they had been made by reason of the TUPE transfer.

6. Continuity of employment

O'Sullivan v DSM Demolition Ltd - Did unofficial work prior to a formal start date count towards a period of continuous employment? No, not on the facts.

A period of continuous employment begins "with the day on which the employee starts work” under a contract with the employer. An employment tribunal found that Mr O'Sullivan had done work on site in the week of 26th October 2015. But a statement of terms of employment had been drawn up with a 2nd November 2015 start date. Additionally, Mr O'Sullivan was not put on to the payroll until that date. It was only from that date that worksheets were completed. DSM's client was not charged for Mr O'Sullivan's work in the week of 26th October and Mr O'Sullivan was paid £100 in cash in hand for the that week’s work.

The EAT held that (on the particular facts) Mr O'Sullivan had worked in the week of 26th October 2015 under an 'unofficial' arrangement, and not under a contract of employment. The result was that Mr O'Sullivan fell short of the necessary two-year qualifying period for his claim for unfair dismissal.

7. Redundancy: Competitive interview process

Gwynedd Council v Barrett - Can an employer reasonably use an interview process when considering redundant employees for alternative employment? It depends.

The claimants were teachers who, following a reorganisation of school services, were made redundant. Rather than using a selection/scoring process, the employer used an interview process to consider applications for alternative employment. The claimants were actually applying for their old jobs in a new school on the site of their former school. There was no consultation over the proposals and no appeal against dismissal.

The EAT found the dismissals to be unfair and contrasted redundancy processes where (i) employees were considered for alternative jobs using a 'forward looking' selection process e.g. by competitive interview for a new and different post with (ii) a process of consultation and selection (where staff were effectively asked to apply for the same or substantially the same job, rather than a new post). Where staff are required to apply for their own jobs, this is closer to selection from within a pool and is neither 'forward-looking' nor appropriate for an interview process.

8. Disciplinaries and Grievances during the Coronavirus pandemic

Have you read the Acas guidance for employers on managing disciplinary and grievance processes during the Coronavirus crisis? It is the gold-star standard and errs on the side of caution. It's worth a read.

9. Compelling employees to take annual leave on furlough

Compelling employees to take annual leave while on furlough is attractive because it can prevent accruing eight months’ worth of holiday (given the maximum furlough period can last from 1st March to 31st October 2020) being due when they return to work or their employment ends (subject always to carry over and correct notification provisions).

Government guidance now supports the view that employer’s can compel their employees to take their accrued holiday during their furlough leave:

The relevant part of the guidance states:- "If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday."

There still remains some legal debate about the lawfulness of compelling annual leave where the individual cannot fulfil the fundamental purpose of holidays: to rest, relax and recharge. Each case will turn on its own facts and legal advice is recommended.

10. Employment Tribunal fees

And finally, are tribunal fees looming, once again, on the horizon? An article published in the Times, on Monday 15th June 2020, reveals that the Ministry of Justice has written to the Law Commission inviting it to “provide recommendations for creating a coherent system for charging and updating [tribunal] fees in the future”.

Fees were abolished in July 2017, with some lawyers predicting that the government would try to introduce a new fees regime at some stage in the future. And they may have been right: with its substantial majority, the government could introduce fees by way of primary legislation and avoid scrutiny by the courts. We could see a new employment tribunal fees regime introduced in as soon as the next 18-24 months. Watch this space….

This article does not constitute legal advice and liability for reliance on the views and opinions expressed is excluded. Specific advice on your own particular circumstances should always be sought.

If you require specific legal advice please contact Katie Bird at Burnetts on 01228 552222 or kbi@burnetts.co.uk and she will put you in touch with Employment team who will be happy to assist you.