Frontline UK Employment Law Update Edition 1 2021 - Case updates
Written By
1. Mrs S Steer v Stormsure Ltd: UKEAT/0216/20/AT (V)
2. Angard Staffing Solutions Ltd and another v Kocur and others
3. Quilter Private Client Advisers Ltd v Falconer and another [2020] EWHC 3294
4. Adedeji v University Hospitals Birmingham NHS Foundation Trust [2021] EWCA Civ 23
6. Zoll Medical UK Limited v Trebilcock (2020)
1. Mrs S Steer v Stormsure Ltd: UKEAT/0216/20/AT (V) - LINK
In this case, the Employment Appeal Tribunal (“EAT”) held that the lack of availability of interim relief in discrimination claims under the Equality Act 2010 (“EQA”) was a breach of the European Convention on Human Rights (“ECHR”) as EU Member States should provide a remedy for discrimination that is effective and equivalent to the remedies available for similar claims, such as whistleblowing.Interim relief is a remedy currently only available in claims of automatic unfair dismissal for whistleblowing. It enables a claimant to obtain an interim order from the Employment Tribunal (“ET”) for the continuation of their employment pending a full hearing of their claim, if the ET concludes that their whistleblowing claim is likely to be successful. There is no statutory basis for claims of interim relief in discrimination claims.
The Claimant employee complained that she had been sexually harassed at work and that there hadn’t been a proper investigation into her complaint. She subsequently asked to work from home. The Respondent accepted this request but then attempted to install monitoring software to observe her work levels, and also cut her hours due to child-care responsibilities.
The Claimant argued that this behaviour amounted to a fundamental breach of contract entitling her to resign and claim constructive dismissal. She also alleged that her dismissal was direct sex discrimination, as the Respondent had made unwarranted sex-based assumptions about her ability to work and manage child-care responsibilities.
The Claimant claimed entitlement to interim relief under the Employment Rights Act 1996 and the EQA, arguing that the difference in protections available for discrimination claims compared to whistleblowing claims breached EU law and article 14 of the ECHR, which prohibits discrimination. The ET held that it had no jurisdiction to hear claims of interim relief in a discrimination case.
The EAT ultimately rejected the Claimant’s arguments relating to EU law but held that the lack of interim relief available in discrimination claims was discriminatory in itself and therefore a breach of the ECHR. Hesitant to effectively quasi-legislate by granting interim relief itself, the EAT granted the Claimant leave to appeal to the Court of Appeal (“CA”), which has the power to make a declaration of incompatibility of domestic legislation with EU law.
If the CA makes a declaration of incompatibility, this will likely necessitate an amendment to the EQA to make interim relief available in discrimination claims. Given the significant number of discrimination claims issued in the ET, this could result in a large increase in interim relief applications in future. These applications are resource intensive and time-critical and would add to the already large workload of the ET system.
2. Angard Staffing Solutions Ltd and another v Kocur and others - LINK
In this case, the Employment Appeal Tribunal (“EAT”) clarified the protections afforded to agency workers with regards to their ability to apply for internal postings with an end user, and the extent to which they must be afforded equal working conditions to comparable direct employees.The Claimants were agency workers employed by Angard, a subsidiary of Royal Mail (the Respondents). They brought a total of twelve Employment Tribunal (“ET”) claims against the Respondents with respect to alleged breaches of the Agency Workers Regulations 2010 (“AWR”).
One of the claims was for a breach of regulation 5 AWR, which provides agency workers with the right to the same basic working and employment conditions (including as to the duration of working time) as they would be entitled to as an employee after 12 weeks on an assignment. The Claimants asserted that agency workers’ shifts were 12 minutes longer than comparable employees’ shifts and this was contrary to regulation 5. They also claimed breach of regulation 13 AWR, under which agency workers have the right to be informed of any relevant vacant posts with the end user, on the grounds that they were told they were ineligible to apply for internal vacancies posted on the Leeds Mail Centre notice board, and could only apply for external postings in the same way as external candidates.
The EAT found in favour of the Respondents, holding that:
- the right to be informed of internal vacancies under regulation 13 does not constitute a right to be entitled to apply for, and be considered for, these vacancies on the same terms as employees; and
- under the AWR there is no requirement that shift lengths must be equal for agency workers and comparable employees, although if the hirer has a maximum shift length for employees then it must have the same in place for agency workers. The entitlement to equal treatment in respect of the duration of working time under regulation 5 only means that if the end user sets a maximum period when a comparable employee could be required to work, it cannot set a different maximum for agency workers.
This case provides useful clarification to employers who hire agency workers, suggesting that the ET should take a pragmatic approach to the comparison between agency workers’ working conditions and those of comparable direct employees, and that identical treatment is not required for compliance with the AWR.
3. Quilter Private Client Advisers Ltd v Falconer and another [2020] EWHC 3294 - LINK
In this case, the High Court found a suite of non-compete, non-solicitation and non-dealing clauses to be unenforceable as an unreasonable restraint of trade.The First Defendant, Ms Falconer, was a financial adviser who joined the Claimant company under a contract containing various post-termination restrictions. After six unhappy months, she gave her notice and joined the Second Defendant, Continuum. She was only required to give two weeks’ notice as she was still in her probationary period, during which the Claimant placed her on garden leave.
The High Court granted an interim injunction against Ms Falconer to enforce her restrictive covenants. The case then went to a full trial, where it was found that Ms Falconer had breached her contract in a number of ways - for example, among other things, she had contacted the Claimant’s clients during her gardening leave without permission and she had failed to show her new employer her employment contract containing her restrictions.
However, the Court found her restrictive covenants to be invalid under the doctrine of restraint of trade. For example, her 9-month non-compete clause applied regardless of the short period she had worked for the Claimant and the Court found she had not been there long enough to have built relationships with clients, so as to justify the imposition of a non-compete. Furthermore, the non-compete went beyond what is necessary to protect the Claimant’s legitimate business interests by preventing her from not only working with the Claimant’s existing clients, but prospective clients as well. Ms Falconer’s non-dealing restriction was also very onerous as it prevented her from soliciting or dealing with former clients with whom terms and conditions had been in place during the last 18 months prior to her termination, which clearly encompassed a significant period prior to the start of her employment with the Claimant.
This case highlights how post-termination restrictions cannot be drafted with a "one size fits all" approach and must be bespoke to an employee’s role and status, as well as the relevant factual scenario. Employers should consider whether narrower restrictions might be appropriate for employees during the initial few months of their employment, with wider restrictions only applicable when they have been in post for a longer period.
4. Adedeji v University Hospitals Birmingham NHS Foundation Trust [2021] EWCA Civ 23 - LINK
In this case, the Court of Appeal (“CA”) found it was not just and equitable to extend time to allow a race discrimination claim, presented three days after the expiry of the limitation period, to proceed in circumstances where there had been an alleged misunderstanding of early conciliation rules.The Claimant was employed by the Respondent as a consultant surgeon. After a capability and conduct process, he resigned and brought claims of constructive unfair dismissal and race discrimination. Following a misunderstanding of the early conciliation rules, his claims were presented three days outside the primary limitation period, despite him being advised twice by solicitors of the correct deadline.
At a preliminary hearing in the Employment Tribunal, the Employment Judge held that both the unfair dismissal and the discrimination claims had been presented outside the primary time limits and declined to grant any extension. The Claimant appealed to the Employment Appeal Tribunal, which dismissed the appeal.
The Claimant was granted leave to appeal to the CA, but only as regards the race discrimination claim. Whilst the primary time limit for issuing a discrimination claim is three months from the date of the act complained of, an Employment Tribunal has discretion to extend time to allow submission within such other period as it considers “just and equitable”.
The CA upheld the lower courts’ refusal to extend time for the race discrimination claim. The CA held that tribunals should assess all relevant factors in a case, including the length of, and the reasons for, the delay. Although the delay had only been short in this case, the CA noted that Claimant was "a highly educated man” with legal advisors, whose advice he chose to ignore. Also, the disputed events took place long before they were complained of. The Appellant could have complained of them as soon as they occurred or immediately following his resignation.
Whilst tribunals have a significant margin of discretion in determining whether it is “just and equitable” to allow a discrimination claim to proceed when submitted outside the primary time limit, this case underlines that all relevant factors should be taken into account. Claimants who are legally advised are likely to be held to a higher standard than those without representation.
5. Clark v Harney Westwood & Riegels and others: UKEAT/0018/20, UKEAT/0019/20 and UKEAT/0576/19 (21 December 2020) - LINK
In this case, the Employment Appeal Tribunal (“EAT”) considered which legal entity was the correct employer when there was a dispute over its identity.The Claimant employee was employed under a written contract of employment that stated that offshore law firm Harney Westwood & Riegels (“HWR”) was her employer. However, in order for to enable her work legally in the Cayman Islands, purportedly for HWR, applications for temporary and full work permits were made on her behalf and without her knowledge, by Harneys Gill (“HG”), an entity created through a merger between HWR and Cayman Islands firm C S Gill & Co. The Claimant’s temporary and full work permits were issued by the Cayman Islands Department of Immigration, naming HG as her employer.
The Claimant was later dismissed and brought a claim in the English Employment Tribunal (“ET”) against HWR. Her initial claim was dismissed for being out of time but also for lack of jurisdiction on the basis that, despite the wording of the contract of employment, Ms Clark was actually employed by HG, not HWR. Ms Clark appealed to the EAT.
The EAT held that HWR was the Claimant’s legal employer, as the employer named in her employment contract, and not HG as the employer named on her work permits. It found that the parties’ relationship was consistent with this conclusion. It was held that documents created separately from the written agreement without an employee's knowledge and which purport to show that another party is the employer, should be viewed with caution. In this case, the Claimant was unaware of the other documents, and in a situation like this it would be extremely unlikely that a document about which a party has no knowledge could contain persuasive evidence of the intention of that party. The EAT also commented that lending too much weight to a document drawn up solely by one party without the other's knowledge or agreement, could create a situation where there is too much focus on the intentions of that one party and not on what was actually agreed by both parties.
This case provides useful guidance on identifying the correct employer in a case where there is dispute, and emphasises that the terms of the written contract of employment will be persuasive unless there is evidence that it is a sham which does not reflect the true intentions of the parties, or that the circumstances have changed since the contract was entered into. It also emphasises that in order to avoid uncertainty, employment contracts and associated documentation should be as consistent as possible.
6. Zoll Medical UK Limited v Trebilcock (2020) (judgment not yet publicly available)
In this case, the Claimant employer sought orders from the High Court requiring the Defendant, a senior ex-employee, to preserve, deliver up and destroy confidential information that it alleged had been retained unlawfully after the end of his employment, to confirm that he had done so and to give an account of his use of the information. The Defendant argued that he was entitled to the information in order to support a whistleblowing claim against the Claimant. The Court ruled that this did not justify the transfer of confidential documents for his own retention.The Claimant’s UK business is focussed on the marketing, sale and maintenance of medical resuscitation products. The Defendant was employed until October 2020 as the Claimant’s most senior UK employee.
In June 2020 the Defendant incorporated a company (“D”). The Claimant alleged this was done without its prior permission, and it led to the Defendant’s dismissal. Upon review of the Defendant’s company property including his company laptop and email account, the Claimant found that from March to September 2020, the Defendant had emailed confidential company information to his personal email address and an address for D. The Claimant also discovered that the Defendant had accessed confidential and commercially sensitive information by connecting a USB device to his company laptop both during and after his employment had ended.
The Claimant issued proceedings, on the basis that the Defendant was in in possession of confidential information including business, financial and strategic plans, customer lists and contact information and employment terms and staff contact details, and that he had acquired it in breach of his contractual and equitable obligations to the Claimant. The Defendant did not deny that he had retained confidential information but argued that its retention was necessary for the purpose of enabling him to bring a whistleblowing claim against the Claimant. The Claimant argued that the confidential nature of the information created reasonable grounds for suspicion that it would be used by the Defendant for an unlawful purpose. Therefore, the Claimant sought preservation, delivery-up and deletion orders for the information, as well as an information order forcing the Defendant to confirm he had complied with those orders and further to give an account of his use of the confidential information.
The Defendant’s justification for retaining the information was rejected and it was held that the prospective whistleblowing proceedings could not justify the appropriation and retention of confidential documents. In addition, it was held that the delivery-up and deletion orders sought were proportionate and did not prevent the Defendant from making protected disclosures as a whistleblower.
Although a confidentiality obligation is void insofar as it purports to prevent a worker from making a “protected disclosure” under whistleblower legislation, this case confirms that employees do not have carte blanche to misappropriate confidential information for the purposes of a claim against their former employer.
