Preparing to Compete - Gross Misconduct?

Is preparing to compete with an employer Gross Misconduct?

Not necessarily says the EAT. In their judgement in Khan v Ladsker Child Care Limited the EAT provided a healthy reminder that in order for this to be gross misconduct and therefore justifying summary dismissal, an employer must demonstrate a fundamental breach of contract such as a breach of trust and confidence.

Whether or not actions would constitute a breach of contract would need to be balanced between a restraint of trade which is unenforceable and protecting the reasonable business interests of the employer. Without going into too much detail about the judgement itself, it is a healthy reminder to have properly drafted restrictive covenants and confidentiality clauses within contracts of employment.

If you wish to fully protect your business and need advice in terms of restrictive covenants, please contact us on 07716 346 708 or email me on gda@cheshirelawassociates.com

Subjective Redundancy Criterion

Is it appropriate for an employer in a redundancy situation to apply subjective reasoning in terms of redundancy selection?  Yes says the Employment Appeal Tribunal ("EAT").

The EAT has handed down its judgement in Mitchells of Lancaster (Brewers) Ltd v Tattersall. The EAT held at paragraph 21:

'...just because (subjective) criteria...' '...are matters of judgement, it does not mean that they cannot be assessed in a dispassionate or objective way...', 

 They further noted that:- 

'...the concept of a criterion only being valid if it can be "scored or assessed" causes us a little concern, as it could be invoked to limit selection procedures to box-ticking exercises...'.

What is important however is to ensure that the criterion isn't what the Tribunals would class as exceptionable and employers should still be prepared to be dispassionate and objective. That being said there is no reason why an employer cannot measure what the likely impact on the business is to be when dismissing one person above another and thus make a judgement call on that basis.

If you are planning or approaching a redundancy situation in Manchester or London and need to instruct expert Employment Lawyers then please feel free to call us on 07716 346 708.

 

Employment Law Snapshots - Introduction

We at Employment Litigator Online wanted to provide employers and employees with a little snapshot of our knowledge in respect of Employment Law. We hope to kick off with the thorny issue of what is a 'Constructive Dismissal' and what is not.  As many of you know I work with Cheshire Law Associates LLP who are a full service firm of Solicitors based on Wirral. Our practice is spread nationally with work coming in from Manchester, London, and Edinburgh and we appear at the Employment Tribunals nationally for employers and employees.

We hope that you like our work and that it provides a suitable insight to our knowledge and depth of experience.

PILON and Discovery of Pre Termination Gross Misconduct

If an employer dismisses a member of staff with payment in lieu of notice ("PILON") but then later learns that prior to termination of employment they had committed an act of Gross Misconduct, can they withold that PILON payment?

No, says the Court of Appeal. They have recently handed down their judgement in Cavenagh v William Evans Limited.

This concerned a Managing Director who had been made redundant and was due to be paid a payment in lieu of 6 months notice.  Prior to making the payment the company discovered that the MD had committed an act of gross misconduct and witheld the payment of notice on the basis that had he still been in employment and discovered the gross misconduct they would have been entitled to dismiss him summarily without notice.

The Court of Appeal held that the MD had acquired an accrued right to the PILON payment as his contract had been terminated lawfully under relevant provisions of his contract of employment (or service agreement) - They further held that there was no general principle in contract law barring him from exercising his right to recover the payment as a debt owed to him.  The principle that a claim for wrongful dismissal could be defeated by relying on evidence of misconduct after dismissal did not provide the company with a defence to the MD's claims to a money claim.

One observation from this is that, had the company dismissed him unlawfully they would have had a defence to his claims (Boston Deep Sea Fishing v Ansell (1888)) but because they did not wrongfully dismiss him, they are considerably worse off.

To prevent similar situations employers should consider updating their contract of employment to include a clause that enables them to withhold notice pay should the employer discover prior acts of gross misconduct.

Employee Discipline and Baby P

Can an employee be disciplined for the same offence twice? Yes in extreme circumstances says the Employment Appeal Tribunal ("EAT"). The Appeal Tribunal has recently handed down its decision in Christou & Ward v London Borough of Haringey

Ms Ward was the social worker responsible for Baby P. Ms Christou was her supervisor, whom Sharon Shoesmith promised would not lose her job over the death of Baby P. Both employees were subject to  Haringey Councils 'Simplified Disciplinary Procedure'. The maximum penalty under the Simplified Disciplinary Procedure was a written warning, which they both received.

After the media coverage alongside the OFSTED inspection and the subsequent dismissal of Sharon Shoesmith, the Council revisited the disciplinary allegations and decided to dismiss Ms Ward and Ms Christou.

Both Claimants issued proceedings in the Employment Tribunal ("ET") submitting that to discipline them twice for the same allegation and already having been subject to a sanction was legally impermissible and unfair. The Employment Tribunal disagreed and held that they had been fairly dismissed.

They appealed to the EAT and they upheld the original judgement of the ET. 

Slade J (presiding) upheld the majority decision of the employment tribunal that the dismissals were not unfair. It held there was no concept of 'double jeopardy' or 'res-judicata' in internal disciplinary proceedings. It further held that whilst it would be highly unusual for a second set of disciplinary proceedings to follow a first arising out of the same facts, this was an extremely 'rare' case and the tribunal was entitled to hold that the employer's actions were fair in the light of the media spotlight and the new management regime which took a different view of the seriousness of the employees' conduct (see para 112).

Employers should not take this case as being authority for the proposition that an employer can revisit previous disciplinary proceedings and choose to dismiss when a sanction has already been decided and acted upon. The key phrases in this case are 'rare case' and 'highly unusual'. What does remain is the employers duty to always act within a range of reasonable responses.

If you need assistance with disciplinary issues our Free Employment Law Helpline is available to you on 07716 346 708. Failing that you can email us on gda@cheshirelawassociates.com

  

Beecroft Report

We have obtained a copy of the Beecroft Report for your perusal. What do you think of its proposals? Is it an erosion of Employment Rights or is it a genuine reform?

http://www.bis.gov.uk/assets/biscore/employment-matters/docs/r/12-825-report-on-employment-law-beecroft.pdf

Feel free to comment.

Enterprise and Regulatory Reform or Erosion of Employment Rights? (You decide)!

The Enterprise and Regulatory Reform Bill has yesterday been presented before Parliament and begins its process to becoming law.  The Bill can be found here

Essentially it proposes the following:

1. A mandatory period of Acas conciliation before instituting tribunal proceedings (with heavy reliance on as yet unpublished detail by way of Regulations)
2. Extension of limitation periods to allow for pre-issue Acas conciliation
3. Introduction of 'legal officers' to make decisions in certain cases if all parties agree in writing
4. EAT cases to be heard by a judge alone, unless ordered otherwise
5. power for Secretary of State to limit unfair dismissal compensatory award to a maximum between the national median earnings and 3 x median earnings.
6. According to Daniel Barnetts update and his conversations with Rowena Robson of the Department of Business, Innovation and Skills, the DBIS is working from a median average earnings figure of £26,000. That means (if the power is exercised) that the compensatory award will be capped at somewhere between £26,000 (one year's earnings) and £78,000 (three years' earnings). 
7. Alternatively, power for the Secretary of State to limit unfair dismissal compensatory award to one year's earnings
8. Power for a tribunal to impose a penalty on employers of 50% of any financial award, subject to a minimum of £100 and maximum of £5,000, where there are "aggravating features" (not defined), with a 50% discount for payment within 21 days
9. Defintion of 'qualifying disclosure' in whistleblowing legislation to be restricted to disclosures "in the public interest" (not defined)
10. 'Compromise agreements' to be renamed 'settlement agreements

Whatever your political persuasion this represents a massive erosion of Employment Rights. I am not entirely sure that this drastic reduction will achieve its aims but whatever your view, there are likely to be some interesting times ahead.