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LEYTON EMPLOYMENT SERVICE - MAY UPDATE

LOCK V BRITISH GAS SET FOR COURT OF APPEAL

 

In our February Newsletter we reported on the decision of the EAT in Lock v British Gas which confirmed that holiday pay should include commission payments.

 

We also indicated that British Gas were set to pursue an appeal to the Court of Appeal; we now know that the appeal will be heard between 11 and 13 July 2016.

 

At the appeal British Gas will continue to argue that it is wrong to try and interpret UK legislation about holiday pay in accordance with the EU Working Time Directive.

 

It remains to be seen whether the Court of Appeal will take a different view to that of the first instance employment tribunal and the Employment Appeal Tribunal. Certainly the direction of travel in these cases so far has been the expansion of holiday pay entitlement.

 

That is further underlined by the recent decision in White and others v Dudley Metropolitan Borough Council in which a first instance tribunal has held that voluntary overtime (as opposed to compulsory overtime which was considered in the Bear Scotland case) will also need to be reflected in holiday pay in certain circumstances.

 

Whichever way the decision goes, it is hoped that employers (and employees) will have a greater degree of certainty about how holiday pay should be calculated.

 

UNLUCKY (PRISON) BREAK FOR EMPLOYER

 

A Scottish bakery employee has successfully persuaded an employment tribunal to award him compensation, having been dismissed for not turning up at work for two months.

 

The reason for his non-attendance? He had been serving a two month prison sentence.

 

It is reported that, on his release from prison, the employee got back in touch with his employer whose only response was to send him a letter saying that his employment had been terminated as his contract had been ‘frustrated'.

 

Leaping to that conclusion, without following any process (e.g. giving the employee an opportunity to explain his circumstances), was held to have been unfair.

 

The case is an example to employers of the need to follow proper procedures, even if the outcome appears at first sight to be a foregone conclusion.

 

In the relatively rare event that an employee has to serve a prison sentence, the best course for the employer is to treat the situation as a case of unauthorised absence and follow its published disciplinary procedure.

 

Scenarios which are more likely to occur might be catching an employee ‘red-handed' commiting a disciplinary offecne, or an employee admitting to such an offence during an investigatory meeting. Where this happens employers still need to remember to carry out the process to its conclusion. In the case of a disciplinary, that means holding a further meeting where the employee has told in advance of the allegation against them and the evidence relied on. It may well be that there is some reasonable explanation for the conduct, or at least some mitigation, that the employee is able to offer.

 

Employers who act without giving the employee that opportunity run the risk of an unfair dismissal finding.

 

There is some good news for employers to take away though. This case also illustrates something that has been discussed in this newsletter before, i.e. the fact that, even where an employer has failed to follow a fair process, if the employee has contributed to their own downfall or the lack of a fair process made no difference, that can be reflected in the compensation award. In this case an award that could, reportedly, have been in the region of £14,000 was reduced to little more than £600.

 

So at least the bakery saved a little dough.

 

THE NEED FOR RESTRAINT IN ‘RESTRAINT OF TRADE'

 

One issue that employers can find notoriously difficult is drafting restrictive covenants preventing their employees from competing with them when they leave.

 

Often the natural instinct is to draft clauses with as many restrictions as possible so that there is no ‘wiggle room' for the employee. Unfortunately that is precisely the wrong approach.

 

Courts and tribunals will only enforce restrictive covenants where they both:

•             protect a legitimate business interest, and ;

 

•             go no further than necessary to protect that interest.

 

As a rule of thumb, as far as restrictive covenants are concerned, less is definitely more.

 

A good example of that can be found in the recent case of Bartholomews Agri Food Limited v Thornton.

 

Mr Thornton was an agronomist for the Claimant company. When he left to work elsewhere his employer asked the High Court to issue an injunction, preventing him from working, relying on the following provision:

 

‘Employees shall not, for a period of six months immediately following the termination of their employment be engaged on work, supplying goods or services of a similar nature which compete with the Company to the Company's customers, with a trade competitor within the Company's trading area, (which is West and East Sussex, Kent, Hampshire, Wiltshire and Dorset) or on their own account without prior approval from the Company. In this unlikely event, the employee's full benefits will be paid during this period.'

 

The Employer said that the provision was necessary to protect confidential information about the business which the employer was privy to, as well as the relationships the employee had with its customers.

 

The judge held that, contrary to the employer's arguments, the covenant went much further than necessary. Specifically:

•             it applied to all customers of the company even though the customers the employee actually dealt with only contributed around 1% of total revenue, and

 

•             those customers the employee did deal with were mainly in West Sussex and that there were no such customers at all in Wiltshire, Dorset or Kent.

 

The court was also very sceptical as to whether there was a legitimate business interest to protect given that the employer was unable to adduce any compelling evidence of the confidential information it relied on.

 

Finally, the court noted that the covenant was entered into in 1997 when the employee was a mere trainee. That was a problem for the employer because the reasonableness of restrictive covenants is to be judged at the time they are entered in to, not at the time of enforcement. As a trainee the employee would not have had the type of confidential information and business connections that the employer sought to protect, so the covenants could not be justified.

 

The lesson for employers is that they should think carefully about restrictive covenants at the outset of the employment relationship (or when an existing employee takes on a new role), clearly identify the business interest they need to protect and tailor the restrictions so that they achieve that goal with the minimum impact on the employee's post termination activities.

 

 

MISUSE OF COMPUTER SYSTEMS AT THE HIGHEST LEVEL

 

It is unlikely that you missed the news stories last year concerning top Judges being dismissed for viewing pornography at work, on their work computers. No less than three Judges were dismissed around the same time in March 2015, with a fourth apparently resigning before investigations were complete.

 

One of the Judges has now been splashed across the news in recent weeks, as he has brought an unfair dismissal and disability discrimination claim against his employers, the Ministry of Justice. Former immigration Judge Warren Grant contends that he suffered from a mental illness which led him to view pornography at work. His claim is that this condition amounted to a disability, that his employers should have taken this into account, and that his dismissal was unfair as a result.

 

The claim is (unsurprisingly) being defended by the Ministry of Justice, who will almost certainly be denying that the former Judge has a disability at all, and are further contending that the dismissal was fair. They have stated that the Judge's actions were an ‘inexcusable misuse of their judicial IT accounts' and amounted to ‘wholly unacceptable conduct'. It seems that there isn't any claim that the viewing of pornography led to any issues with the Judge's work, however some newspapers have reported that the pornography was accessed several times a day for around 14 months.

 

It is pretty universal amongst employers and employees that accessing and viewing pornography at work is unacceptable. It is perhaps more serious when someone in charge of enforcing the law is caught doing it. Whatever your viewpoint on whether it is an action worthy of dismissal or not, the decision in this case will be very interesting for two reasons; the first to determine if viewing pornography at work is something which can amount to the symptoms of a disability, and the second to see how far the Tribunal's decision is influenced by the high position the Claimant held.

 

A decision is expected soon so watch this space! In the meantime employers should ensure that their IT policies are clear on this topic so that no confusion can arise. It may also be prudent to consider good Firewall protection to avoid pornography sites from being accessed at all.

 

 

 

 

Please note that this Newsletter has been prepared for information purposes only and does not constitute advice or legal advice for the purposes of any individual case, and it cannot be a substitute for specific advice based on the circumstances of any such case.  Whilst every care has been taken in the preparation of this document, Leyton UK Partners LLP cannot accept any liability for any loss or damage, whether caused by negligence or otherwise, to any person or organisation using this document.

 

Leyton UK Partners LLP (registered number OC388386) is an Alternative Business Structure (ABS) authorised and regulated by the Solicitors Regulation Authority (SRA) under licence number 619453 in respect of legal work. Leyton UK Partners LLP also carries out R&D funding related consultancy services and these R&D funding services are not regulated by the SRA.