Summary A unilateral change of contractual terms should not be treated as having implied consent, even where employees have continued to work for some years under the changed terms, unless the employer can show unequivocal acceptance of that variation by those employees. Law This case relies on the principles of contract law, and was heard in a civil court, rather than in the employment tribunal system. Facts Under various staff handbooks and the civil service Code of pay and…

Summary The Court of Appeal upheld a contractual provision giving more favourable income protection payments (IPP) to an employee absent on long-term sick than the IPP insurance policy paid out under the policy at the time of payment. Law Jowitt v Pioneer Technology (UK) Ltd [2003] Where an employee is not aware of an underlying insurance policy, an employer’s contractual commitment to pay for long-term disability pay cannot be contingent on the terms of that policy. Villella v MFI…

Summary A contractual clause specifying a calculation to be made when deducting from employees pay for missing stock was unenforceable, as it was not based on actual loss to the business. Applying such a clause is a fundamental breach of the implied term of contract of mutual trust and confidence.  Law 13(1A) of the Employment Rights Act 1996 - Right not to suffer unauthorised deductions. (1)An employer shall not make a deduction from wages of a worker employed by him unless— (a)the…

Summary The Employment Appeal Tribunal was asked to consider whether or not the claimant was dismissed by the respondents’ actions in terminating his employment early during his notice period, which he was serving as a result of his resignation. Law Section 95 Circumstances in which an employee is dismissed Employment Rights Act (ERA) 1996 (1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (a)the contract under which he is employed…

  Summary The Supreme Court has ruled that employers cannot attempt to bypass an agreed collective bargaining process by offering incentives to staff to do so. Bargaining procedures must be completely exhausted before making direct approaches to employees.   Law Section 145B Trade Union and Labour Relations (Consolidation) Act 1992: (1)A worker who is a member of an independent trade union which is recognised, or seeking to be recognised, by his employer has the right not to have an offer…

  Summary The Court of Appeal has upheld earlier decisions of the ET and EAT in another gig economy case, confirming that the ability to offer a piece of work to a substitute does not mean that the service is not provided personally, and therefore does not mean they cannot be found to be a worker. Law Section 230(3) of the Employment Rights Act 1996 defines a worker as someone who has “entered into or works under a: contract of employment or any other contract, whether express or…

Summary An employment tribunal (ET) has held that an employer unfairly dismissed their employee who refused to agree to proposed employment contract changes due to coronavirus. To avoid a claim for unfair dismissal an employer must have a potentially fair reason to dismiss, acted reasonably in treating this reason as sufficient to justify dismissal, and followed a fair procedure. For a dismissal to be fair, the employer must show that the employee was dismissed for one of the following five…

The Employment Appeal Tribunal (EAT) has provided clarity on identifying the correct organisation that has employed a claimant when this is disputed. When a dispute arises regarding employment of an individual, such as the duties they are expected to complete and the rights available to them, the starting point for tribunals to look to is the contract. However, as outlined in the case of Autoclenz v Belcher, the contract may not reflect the true relationship between the parties. As a result of…

Summary The High Court has provided further clarity on how the Job Retention Scheme works during a situation of company insolvency. In situations where organisations become insolvent and therefore enter administration, administrators normally have 14 days following their appointment in which to dismiss that organisation’s workers. This is important to avoid liability for their employment and their wages. In March 2020, as a result of the coronavirus outbreak, the government introduced the…

Summary In a landmark ruling, the Supreme Court has confirmed that unreasonably wide wording in a post-termination covenant can be removed, and the covenant still enforced, if this does not generate any significant change to the overall effect of the restraint. Despite the common myth, organisations are able to use and enforce non-compete restrictions in order to protect their business interests when employees leave the business. However, a restrictive covenant which serves to restrict trade…

Summary The Employment Appeal Tribunal (EAT) has ruled that an employee who covertly recorded a meeting did not automatically break the implied term of mutual trust and confidence. In a contract of employment, there exists an implied term of mutual trust and confidence between the organisation and its employee. This means that if either party conducts themselves in such a way that undermines or destroys the employment relationship, the other party can regard their actions as a fundamental…

Summary The Court of Appeal has ruled that mistakenly referring to a different termination date than specified in an employment contract will not vary the date if there is no basis for inferring this intention. In this case, the employee joined an insurance broker in 2005 under an ‘Executive Employment Agreement’. This agreement was subsequently varied pursuant to a written addendum in 2012, which outlined that his employment would not expire before 31 December 2016 unless either party chose…

Summary The Employment Appeal Tribunal (EAT) has ruled that an employee was entitled to a written statement of terms despite only working for the organisation for six weeks. This case concerned three European claimants who were employed by a hotel as waiting staff and claimed they were poorly treated. Following a complaint to management about numerous issues, such as shortfalls in their wages, falsification of their wage slips and late payments, they were summarily dismissed. Section 1 of…

Summary The Supreme Court has clarified when written notice of dismissal becomes effective in the absence of an express contractual term. Facts This case concerned an associate director in the provision of community services for two NHS primary care trusts. Following a merger with the local NHS foundation trust, she was informed by letter that she was at risk of redundancy. She was offered alternative employment, but rejected the posts on the grounds they were at a lower salary and would…

Summary Where an employee knows the contract of employment is not temporary, in contravention of immigration laws, does this make the contract unenforceable from the outset because of illegality? In Hall v Woolston Hall Leisure Ltd, three categories of cases of illegality were identified. The first two render the contract unenforceable from the outset: where the contract was entered in to with the intention of committing an illegal act or where the contract is expressly or implicitly…

Summary To act fairly when deciding not to renew an employee’s fixed-term contract, are employers only required to comply with the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002? The Regulations provide protection for fixed-term employees against less favourable treatment in comparison to a comparable full-time worker. This includes the right to not be treated less favourably regarding the opportunity to secure permanent positions with their employer.…

Summary Will the implied term of mutual trust and confidence be breached when an employer gives a false reason for dismissal? Facts Rawlinson commenced employment as Group Legal Counsel in December 2014. Before his appointment, the organisation used a variety of legal firms based on the required advice. Following the appointment of a new Chief Executive Officer in January 2015, concerns with Rawlinson’s performance were raised. Rawlinson was aware of this but no detailed concerns were…

Summary Service continuous by arrangement and custom Facts Mackay had been employed as a waitress in a hotel in the north of Scotland over a number of years, working during the summer seasons only, as the hotel was semi-closed during the winter months.   Each year, her employment was terminated at the end of the summer season and the contract revived again in the early spring. When her services were dispensed with, she claimed unfair dismissal, arguing that her contract with the hotel…

Summary Contract of apprenticeship is a one-off contract EAT The EAT held in this case that a contract of apprenticeship was a one-off contract which, once completed, could not logically be renewed. Consequently, the employer's decision not to offer the individual a contract of employment following the completion of his apprenticeship training did not amount to a dismissal in law.

Summary Here the court decided that a restrictive covenant in an employment contract was too wide in scope and inappropriate for the employee involved when originally drafted, and so was unenforceable when the employer applied for a court injunction on the basis of it 19 years later.   Post-termination restrictions in employment contracts are intended to prevent employees from misusing confidential information, working for a competitor organisation or soliciting clients when they leave…

Summary Court of Appeal decided that a provision set out in an employee handbook (here an absence management procedure) had the same effect as an employment contract term. This meant the employer was bound by the provision, and would be in breach of contract if it decided not to comply with it. The employer imposed a new absence management procedure, after it failed to achieve agreement through negotiations, which changed the points at which various warnings, and ultimately dismissal, was…

Summary Here an employee failed to prove his bonus, which was lower than his colleagues’, was ‘irrational and perverse’, because the contractual rules permitted the employer to treat the employees differently   A derivatives trader’s contract of employment stated he was entitled to be considered for a discretionary bonus. The factors to be used when determining the level of bonus, such as the bank’s overall performance and his individual contribution, were described in his contract and in…

Summary Court injunctions have not usually been used when whole teams leave a company to join a competitor in the absence of restrictive covenants. But in this case a springboard injunction was granted to the company suffering the loss preventing the competitor from enticing more employees away from a business.   One of the key tests for a court considering an application for an injunction is whether there is anything to be gained by the applicant if it is granted.   The head of a…

Summary A senior employee of a company was found to have breached his contract by investing in a potential competitor being set up by his sons.   Every employment contract contains the implied term that the employee will serve their employer with good faith and fidelity. This term may extend beyond the termination of the employment contract if the employee holds a position of particular responsibility or seniority. Company directors, for example, have more onerous duties and…

Summary Employers can change terms post-appointment with careful contract drafting but in this case the EAT decided that the letter of appointment did not give the employer the right subsequently to vary the employment terms unilaterally.   Where changes are made to employment contracts, employees must be given a written statement containing particulars of the change (Employment Rights Act 1996). If an employer fails to provide this statement, or provides one which is inaccurate or…

Summary An employee was found to have accepted a variation of her employment contract by implication through continuing to work for a prolonged period without expressly objecting to the change. Facts A senior museum curator, originally employed on civil service terms and conditions, was placed on a lower grade in 2003. Pay protection was discussed but not finalised at the point at which she accepted the new role, and she wrote indicating she understood her terms would remain…

Summary In this case, the EAT had to decide whether a contractual term, or an HR officer's assurances, gave an employee the automatic right to a pay increase if her performance was satisfactory.   Earle was the successful applicant for a job which came with a salary range, within which there were a number of incremental steps from the lowest level (where she started) to the top. Her contract stated: “Progression through the salary range will be reviewed annually on or around 1 October in…

Summary An employer which has the responsibility of exercising discretion over bonus payments, even bonuses based on formulas, must do so rationally.   The claimants in this case were equity derivative dealers working for a bank. Their contracts provided for a bonus payment each year, to be calculated as a percentage of the value added to the business as a result the deals generated by the equity derivative arm.   During the first three years of the bonus scheme there was some dispute…

Summary After an employee left without notice to work for a competitor, and refused to return to work, his former employer stopped paying his salary and asked the court for an injunction holding him to the notice period and binding him to his restrictive covenants.   This case was brought by a derivatives brokerage firm against one of its employees. Rodgers walked out of the broker’s London office in March 2014, without notice, having accepted a position with a competing business based in…

Summary In this case, the Supreme Court had to consider whether the illegality of the contract under which she was working prevented a young Nigerian woman, who had been illegally trafficked to the UK to work as an au pair, from claiming unlawful race discrimination.   Courts are prevented from assisting those claimants whose claim is founded on an illegal act. The illegality principle is intended to preserve the integrity of the legal system, and it has been said that the principle is…