Team poaching and springboard injunctions

Springboard injunctions are often granted in circumstances in which senior or key sales employees leave to work for a competitor. The name derives from the case of Bullivant v Ellis (1987) in which Mr Justice Falconer stated that the purpose of the injunction was “to prevent the defendants from taking unfair advantage of the springboard which…they must have built up by their misuse of the information in the card index”.

Most such injunctions are sought with a view to preventing misuse of confidential information (such as customer connections and contacts), serious breaches of contract or other unlawful conduct. Unsurprisingly, in the vast majority of cases the application for an injunction will be based on alleged breaches of post-termination covenants, such as those which are stipulated by non-compete and similar clauses.

However, there are limited instances in which an injunction may be obtained, even in the event that there are no such contractual provisions. In Willis v Jardine Lloyd Thompson, in a refreshingly brief judgment, the Court of Appeal disagreed with the decision of His Honour Judge Seymour to refuse to grant an interim injunction. He took the view that there was no point in granting an injunction because, in effect, the horse had bolted with the defection of a large number of employees to a competitor.

Willis is a major international insurance broker. It has a highly respected Fine Art, Jewellery and Specie Gifts Division and is the world leader in this sector with sales amounting to tens of millions of dollars each year. In a witness statement made by Willis’ CEO of Market Services, David Thomas, on 13 April 2015 he stated that some 30 employees from the department had left in the last 10 days. 22 left on Maundy Thursday, four left on 9 April, three on 10 April and two on the 13th. Those leaving included almost all the senior management team and key sales staff. Some 30 more junior staff were left. It turned out that they had all left to join a direct competitor, Jardine Lloyd Thompson (JLT). Mr Thomas thought that there would be a second wave of resignations and that this was as part of a coordinated attack. It was suspected that the underlying strategy was to weaken the department by the mass defections, thereby enabling JLT to acquire the whole department at a discounted price. 


Ordinary parental leave – an update

I was recently updating the subscription zone for our subscribers to Canter Levin & Berg Employment Solutions when I was reminded that, in addition to taking into account the new arrangements for shared parental leave there are knock on effects for what was previously referred to as parental leave.

Most of us who deal with maternity absences are familiar with the general provisions applicable to maternity leave and they are set out in detail in our subscription zone so subscribers know exactly what to do in that regard.

However, what was previously parental leave is now known as as ordinary parental leave. The main reason is to avoid confusion with shared parental leave.

From April 2015 the entitlement applies in respect of any children before their 18th birthday and the specific provisions relating to disabled and adopted children no longer apply.

The main point about ordinary parental leave is that, although the entitlement is for up to 18 weeks per child, it is unpaid. Accordingly, it is unlikely to be at the forefront of the minds of those considering their parental leave arrangements. However it should not be disregarded, particularly in terms of planning for staffing requirements.

There is still a requirement for employees to have been employed for at least one year before having the entitlement. It is also important to remember that the entitlement to shared parental leave is not contingent on ordinary parental leave – both are free standing rights. Bearing in mind that the entitlement can span a period of 18 years there will be many cases in which employers can do little more than trust that the information provided to them by their employees (particularly in respect of former employment) is correct.


Carrying over holiday pay when sick

Extended absence from work on sick leave can create odd situations, such as the accumulation of holiday entitlement. Most employers know that employees on maternity leave continue to accrue holiday entitlement and this is often added at the end of the maternity leave period.

In this month’s Employment Appeal Tribunal decision in the case of Plumb v Duncan Print Group the question was whether Mr Plumb, who had been off work for nearly four years, could claim all his accumulated holiday entitlement.

Mr Plumb was employed as a printer. He had an accident on 26 April 2010. He remained on sick leave until his employment was terminated on 10 February 2014. According to the terms of his employment his leave years ran from 1 February to 31 January. He was refused a request for holiday leave from 5 August 2013. When his employment was terminated he claimed holiday pay for 2010, 2011 and 2012. His request was refused in the basis that he could not demonstrate that he was unable, by reason of his medical condition, to take annual leave within the leave years.

Regular readers are aware that European law has dictated that holiday pay can accrue during sickness absence but there should be a cut off point. I wrote about this in the blog in 2011.

The employment tribunal took the view that Mr Plumb could not demonstrate that he was unable, by reason of his medical condition, to take annual leave while he was on sick leave and therefore dismissed his claim. That was not the basis on which the European decisions had excluded claims because they were based on the need for a cut off point.

The tribunal’s approach was wrong:


Does time taken travelling to and from work count as working time?

It has long been the case that time spent in travelling to and from work does not form part of the working time of employees. Occasionally, specific issues have been considered, such as when an employer relocates, but the main principle has not altered.

However the European Court of Justice has now had its say in the case of Federación de Servicios Privados del sindicato Comisiones Obreras. This case, on referral from the Spanish national court, concerned workers who were required to travel to different locations to work. The Advocate General described them as “peripatetic workers, that is to say workers who are not assigned to a fixed or habitual place of work [and] spend time travelling from home to the first customer designated by their employer and from the last customer designated by their employer to their homes”.

It was noted that, under Spanish law, working hours should not exceed 40 hours of “actual work” per week, calculated on an annual basis. There has to be at least 12 hours between the end of one working day and the beginning of another and  normal working hours should not exceed nine per day.

The employees concerned were technicians who worked for security system installation and maintenance services. They were allocated to areas and they used company vehicles to travel to homes and industrial and commercial premises where they were required to carry out work. Unsurprisingly the distances from a worker’s home to the first workplace varied considerably and were sometimes more than 100 km. They were also required to travel at least once a week to the offices of a transport logistics company to collect parts. Their place of work each day was notified to them by messages sent to company issued Blackberrys provided to each of them.

For the purpose of calculating working time the employer did not include time spent on the first journey of the day, from home to work, and the last journey of the day, from work to home. Instead, time was calculated with reference to the time of arrival at the first job and the time of departure from the last job.

In the view of the national court this arrangement meant that workers could not adjust their private life and their place of residence for the purpose of proximity to the place of work. Travelling time could not therefore be regarded as rest time, having regard also to health and safety issues. Equally it was not time that the worker was at the employer’s disposal so that he could be assigned to other work. It was therefore not clear whether this was working time or a rest period, hence the referral to the European Court.


Qatar Airways under pressure to scrap policy that allows it to sack pregnant cabin crew

Although our blog is primarily concerned with cases that fall within the jurisdiction of England and Wales there are occasionally international cases which warrant comment. One such is the recent ruling of the International Labour Organisation, part of the United Nations, that Qatar Airways has discriminated against its female employees. Qatar Airways describes itself as the “World’s Best Airline”. Operating to over 140 destinations worldwide it has offices in Kensington, London and operates a premium lounge as part of its “five star service” for corporate customers at Heathrow Airport. Part of its website is devoted to social responsibility, including  environmental awareness, commitment to limiting its carbon footprint and social projects to benefit children. However, the treatment of its female employees leaves a great deal to be desired.

Although the airline operates from its hub in Doha, it undertakes recruitment in the United Kingdom, as demonstrated by a pending recruitment fair at Heathrow on 11 and 12 July. On 16 June the ILO announced that, following a year long investigation it had concluded that the contract of employment for cabin crew breaches its convention against discrimination at work. The contract includes the following clause:
The company reserves the right to automatically terminate your contract as a flying cabin crew member should you become pregnant.
In effect there is no maternity leave; pregnancy equals loss of employment. Failure to disclose pregnancy would constitute a breach of contract by the employee concerned. The ILO also asked Qatar Airways to explain a requirement in the contract that employees must “obtain prior permission from the company in case [he or she] wishes to change marital status and get married” – a clause which has since been dropped. According to a report in The Guardian 80% of Qatar Airways 9000 cabin crew are female and 90% are migrants.


Christian who told lesbian work colleague that homosexuality is a sin was victim of discrimination

It seems that barely a month passes without religion and law conflicting in the area of protection from discrimination. I have written recently about the obvious dilemma when seeking to provide protection in respect of conflicting protected rights and by far the most obvious conflict is between religion or philosophical belief and the others. This month provides another very clear example, and one which should assist employers when confronted with this very tricky issue.

In Mbuyi v Newpark Childcare (Shepherds Bush) Limited, a case which was heard in the Watford Employment Tribunal, the claimant was a Belgian national and an evangelical Christian who worked for the employer from April 2013. Her position as a nursery assistant at the employer’s Shepherds Bush site was made permanent in September 2013. Following her permanent appointment there were a few apparently minor issues. For example she said to another employee (referred to as LP in the proceedings) that she had “hair too short for a woman”. On 3 or 4 September Miss Mbuyi was alleged to have said to LP “Oh my God, are you a lesbian?”. LP was a lesbian and living in a civil partnership. It appears that there were no significant incidents thereafter until, following a return from sickness absence, Miss Mbuyi gave LP a bible as a gift. In the bible Miss Mbuyi had written a note referring to LP’s struggle or difficulties. In the run up to Christmas the staff held a secret Santa gift exercise. Miss Mbuyi gave LP a book written from a Christian perspective by Joyce Meyer. The book contained a similar message to that written in the bible. Subsequently, in early January, Miss Mbuyi and LP were discussing the church that the claimant attended. She pointed out that, according to the church’s teachings, homosexuality is a sin. It appeared that she said this because she thought that LP would view her sexuality as a bar to her attendance at the church. LP was upset by the discussion and left the room. Due to her upset she was sent home.

Miss Mbuyi was already required to attend a disciplinary meeting as a result of lateness. After her conversation with LP the scope of the disciplinary meeting was extended so that it covered lateness and “alleged discriminatory conduct in regard to co-workers”. At the outset of the hearing Miss Mbuyi was informed that dismissal was a possible outcome. In her version of events Miss Mbuyi stated “During the conversation about my church Laura asked me if she would be welcomed at church and if God is okay with what she is doing. I believe in God and as a Christian I follow the bible. So I told her that God is not okay with what you do”. She went on to say “I can only tell the biblical truth. I am not a homophobic person but I believe homosexuality is a sin and God doesn’t like that”.


“Fit notes” have not reduced sickness absence

In 2010 I reported the introduction of fit notes as a way of focusing on making arrangements for employees to return to work rather than just being signed off without more. In 2014 the system was backed up with the launch of a Health and Work Service. However its scope has been restricted and there have been delays in implementation. Although scheduled to commence nationwide in April 2015 the scheme is currently being rolled out and appears to be limited to a telephone advice service. It requires the consent of employees/patients to participate.

In the meantime the EEF has published its Sickness Absence Survey 2015. Its conclusion is clear: “Five years on [from its introduction] – the government’s fit note isn’t working”. The comprehensive survey, conducted with 345 employers and covering 83,654 employees, is the twelfth national survey of its kind and SMEs accounted for 82% of respondents. According to the research, as at September 2014, only 5000 GPs from a pool of 40,584 had received training in health and work.

The survey revealed that 43% of employers said that the fit note had not helped employees to return to work, up from 35% shortly after the scheme was introduced in 2010. Employers also reported that the quality of GP advice on fitness for work has deteriorated.

It was noted that GPs and medical professionals are still issuing low numbers of “may be fit for work” fit notes and over a quarter of the businesses responding had not received any.

In terms of overall absence trends there is a sickness absence rate of 2.2% which equates to 5.1 sickness absence days per employee per year. However, as in previous years, over half of employees had no absence because of sickness. There was a notable increase in long-term sickness absence with the main cause being back problems and other musculo-skeletal disorders. However, for businesses with more than 500 employees the most common cause is stress and other mental ill health disorders.


Holiday pay doesn’t include voluntary overtime, does it?

I rarely report decisions of the Northern Ireland courts because they are not binding in England and Wales. However, this is the second consecutive month in which a Northern Irish decision is worthy of comment, this time from the Court of Appeal in Patterson v Castlereagh Borough Council.

Mr Patterson, a lead claimant for the purposes of a multiple claim, alleged that there was an unlawful deduction from his wages because he was no longer paid holiday pay relating to casual work as a recreation assistant in addition to his post as an assistant plant engineer. His claim was amended to allege that his holiday pay did not take into account the voluntary overtime he worked in his full time post.

His claim relating to his casual work was successful and this was not challenged. Consequently his appeal was limited to the voluntary overtime aspect. In this case Mr Patterson was asked to work overtime by his employer and could choose whether or not to do so because it was not a contractual obligation. Hence its classification as voluntary. There was a technical point concerning whether Mr Patterson had established the earnings he received pursuant to the voluntary overtime but both parties agreed that the point of principle should be determined.

Assuming that the earnings were established evidence submitted for the appeal suggested that they would have amounted an average additional pay of £60 per week. Having considered the relevant sections of the Working Time Directive the Court went on to consider the relevant case law. In British Airways plc v Williams (2012) the Supreme Court considered whether, for the purposes of calculating holiday pay, a pilot’s remuneration should be treated as basic pay or whether it should be based on “normal remuneration”, i.e. including payments “intrinsically linked” to the performance of the employee’s duties. Having referred the question to the European Court of Justice the answer was that it should be based on normal remuneration.

In Lock v British Gas (2014) that principle was extended to include commission payments and in Bear Scotland Limited and Others (2015) employees were successful in having included in the holiday calculation overtime which they were required to work, but which the employer was not obliged to offer.


Who does a vicar work for?

Every now and then the very different worlds of ecclesiastical and employment law overlap, particularly in the context of considering employment claims by the clergy.

In 2011 a female Methodist minister won the right to bring a claim for unfair dismissal since she was held to be an employee of the President of the Methodist Conference. However in 2013 another case concerning a Methodist minister resulted in a decision of the Supreme Court (by four to one) that ministers are office holders and, as such, not employees. The case and its background were analysed by barrister Emily Walker.

The thorny question fell to be considered once again in the recent case of Sharpe v The Bishop of Worcester in which Reverend Sharpe sought to maintain a claim for constructive unfair dismissal after a campaign of victimisation. Reverend Sharpe lost his claim against the Bishop in the employment tribunal on the basis that he failed to meet the threshold tests (for eligibility to bring a claim). However he was successful on appeal to the Employment Appeal Tribunal and, from there, the matter found its way to the Court of Appeal.

Lady Justice Arden noted that the Church of England is not a legal person but it and its officers are governed by ecclesiastical law, including canon law. The office of rector or vicar in a particular parish is known as a benefice which carries with the freehold interest in the parsonage house. Pursuant to The Ecclesiastical Offices (Age Limits) Measure 1975 vicars have to retire at the age of 70. They may also be removed as a result of disciplinary proceedings. Appointment of vicars is made by patrons of the parish pursuant to a right known as “advowson”. Mr Sharpe was offered his appointment in October 2004. Following his appointment he was provided with “the Bishop’s Papers” containing information and advice “on matters spiritual and temporal” including his stipend, other financial matters, information about taking holidays and sick pay. However the Bishop was not in the practice of issuing instructions in the sense of an employer or a line manager.

Taking these and other features into account the employment tribunal concluded that there was no formal contract, let alone an employment contract. The appeal judge in the Employment Appeal Tribunal effectively reached on opposite conclusion based of the same facts. There were numerous indicators of an employment relationship, sufficient for one to be established. Having considered the evidence in considerable details Lady Justice Arden admitted that her mind wavered between both interpretations. She also referred to the Magna Carta, noting that its very first clause provides that the English Church should be free. “That would, I think, include freedom of thought and conscience for individual incumbents, free from interference by parishioners or the Church’s hierarchy.” She accordingly concluded that there was no employment contract between Reverend Sharpe and the Bishop. Similarly, there was no contract and he could not therefore be regarded as a worker.


Is a settlement payment taxable?

One of the most frequently asked questions in HR is whether or not a settlement payment is taxable. Several different and apparently conflicting answers can all be correct, depending on the circumstances. In 2014 I wrote about the £30,000 tax exemption which does not apply in all circumstances and in 2011 I highlighted a potential trap for employers.

Now we have a further and significant contribution in the form of a decision by the Tax Chamber of the First Tier Tribunal in the matter of Mr A v HMRC. It is a basic principle of tax law that earnings are taxable. Unsurprisingly HMRC interprets “earnings” widely as including any payments in respect of which earnings are involved (section 62 Income Tax (Earnings and Pensions) Act 2003). As a result severance payments are frequently regarded as taxable (subject to the £30,000 exemption pursuant to sections 401 to 404A of the 2003 Act when applicable).

Mr A worked as a trader for a Bank in London. His job title was managing director and he was on a basic salary of £120,000 plus eligibility for the Bank’s bonus scheme. In the period from 2003 to 2007 he received significant bonuses based on the bank’s overall performance. In 2007 there was a dispute concerning his bonus and when the Bank was bought out he was made aware of imminent redundancies. He raised grievances including allegations of race discrimination (based on inappropriate comments made by the bank’s chairman and vice chairman).

In early 2008 he raised further grievances including the fact that other directors had received bonuses and he had not. A questionnaire was sent to the employer in accordance with the relevant provisions of the Race Relations Act (as it then applied). On March 2008 the Bank informed Mr A that he was to be made redundant and he was offered £1650 in statutory redundancy pay and a further ex gratia redundancy payment of £48,898. A couple of days later Mr A was offered a further payment if he agreed to sign a compromise agreement (now referred to as a settlement agreement). The agreement provided that in addition to the payments already offered he would receive a further payment of £600,000 in settlement of all outstanding claims. The terminology used will be familiar to those who have dealt with settlement agreements:
The parties have entered into this Agreement to record and implement the terms on which they have agreed to settle all outstanding claims which the Employee has or may have against the Employer…arising out of or in connection with or as a consequence of his employment and/or its termination. The terms…are without any admission of liability on the part of the Employer…
Unsurprisingly HMRC queried the £600,000 payment and asked for a detailed breakdown of what it consisted of.