In this Employment Law Update Elizabeth Judson outlines the recent rates and limits increases and a number of recent cases affecting holiday pay, rights for agency workers, rights for a whistleblower, events that happened after a decision had been made and fire and rehire.
Annual rates and limits increases
The rates and limit changes for this April are set out below.
- From 1 April 2022
- National Living Wage for those over 23: increasing from £8.91 to £9.50.
- National Minimum Wage for those aged 21 to 22: increasing from £8.36 to £9.18.
- National Minimum Wage for those aged 18 to 20: increasing from £6.56 to £6.83.
- National Minimum Wage for those aged under 18: increasing from £4.62 to £4.81.
- Apprentice Rate: increasing from £4.30 to £4.81.
- From 3 April 2022
- The weekly rate of statutory maternity pay (SMP) and maternity allowance will be £156.66 (up from £151.97).
- The weekly rate of statutory paternity pay (SPP) will be £156.66 (up from £151.97).
- The weekly rate of statutory shared parental pay (ShPP) will be £156.66 (up from £151.97).
- The weekly rate of statutory adoption pay (SAP) will be £156.66 (up from £151.97).
- From 6 April 2022
- The weekly rate of statutory sick pay (SSP) will be £99.35 (up from £96.35).
- Week’s pay (basic award / redundancy payment) – £571 (up from £544).
- Maximum unfair dismissal compensatory award – £93,878 (up from £89,493).
Restrictive covenant prevented solicitor from joining competitor
In the High Court case of Law by Design v Ali, the court confirmed that a solicitor could be prevented from joining a competitor due to the existence of a non-competition covenant in a service agreement.
The Claimant’s employment with Law by Design began in 2013 and in 2016 she became a shareholder and signed a shareholder agreement. In 2021, she entered into a service agreement at the same time as receiving a pay rise. Both the shareholder agreement and the service agreement contained restrictive covenants.
These restrictive covenants effectively prevented the Claimant from working in England and Wales in relation to any business that the firm was involved in. The service agreement prevented her from being involved in any business which was in competition with the parts of the firm that she had been involved in to a material extent in the 12 months preceding termination.
The shareholder agreement prevented her from being engaged, concerned or interested in a business which competes with a business of the company in a territory in which the company operated within the previously 12 months. Law by Design sought undertakings following the Claimant’s resignation but she refused to enter into them. The company sought an injunction. The High Court held that the covenant in the shareholder agreement was wider that reasonably necessary in order to protect the company’s business interests.
However, it held that in relation to the covenant in the service agreement, the Respondent had shown that it had a legitimate business interest to protect. The covenant was drawn no more widely than necessary and was therefore reasonably enforceable.
This case is a useful reminder that, in certain cases, where restrictive covenants are carefully drafted so as to not go beyond the genuine business interests that a company needs to protect, non-competition clauses can be found to be enforceable.
Cricket Club groundsman not entitled to holiday pay
In the Employment Appeal Tribunal (‘EAT’) case of Waters v The Mote Cricket Club, a groundsman was found not to be a worker and therefore not entitled to holiday pay.
The Mote Cricket Club has two pitches in Maidstone and, from about 2000, employed a groundsman. The groundsman was an employee of the club and had a licence to live in residential premises on the club’s property. Mr Waters assisted the groundsman as a volunteer/casual worker.
In 2011 he started a business carrying out gardening and grounds services and he maintained another pitch. The groundsman left his employment in 2016 and Mr Waters was engaged by the club on a self-employed basis to replace him. The parties fell out and Mr Waters claimed that he was a worker and was therefore entitled to holiday pay.
The employment tribunal concluded that Mr Waters was genuinely in business on his own account and that the club was a customer of that business. The club was substantially the main customer of the business but the financial contribution of the club to the business’ annual turnover was £22,000 out of a total turnover of £40,000. The EAT found that the tribunal’s assessment was correct and that it was entitled to find that the self-employed agreement between the parties was not a sham.
No right for agency workers to apply for directly employed vacancies
In the Court of Appeal case of Kocur v Angard Staffing Solutions Limited, it was held that the Agency Workers Regulations 2010 do not entitle agency workers to apply for directly employed vacancies with the hirer.
The Claimant was employed as an Operational Post Grade. Angard is a subsidiary of Royal Mail and only supplies its workers to Royal Mail. When the Royal Mail had directly employed Operational Post Grade vacancies available, permanent employees of Royal Mail carrying out different roles were permitted to apply for the roles before the Angard agency workers.
It was argued that the right under the Agency Workers Regulations 2010 for agency workers to be notified of any vacancies within the hirer extended to the right to apply for those jobs. The Court of Appeal rejected this argument on the basis that the recitals to the Agency Workers Directive make no hint of this ever having been considered.
Whistleblower not entitled to remove confidential documents from employer
In the High Court injunction case of Nissan v Passi, the High Court held that a whistleblower was not permitted to remove confidential legal documents from their employer for the purposes of taking legal advice.
Mr Passi had taken and refused to delete or return over 100 legal documents that he had taken from his employer which he said he had taken for the purposes of taking legal advice and was unwilling to return due to his belief that his ex-employer would not disclose them in his whistleblowing litigation. The High Court granted an interim injunction for return and deletion of the documents. It determined that Mr Passi had no proprietary interest in the documents and that there was no justification for allowing him to pre-empt what might happen during disclosure in the pending litigation.
Wrong to consider events taking place after decision to dismiss had been made
In the Employment Appeal Tribunal (‘EAT’) case of Citizens Advice Merton and Lambeth Limited v Mefful, it was held that, when considering a claim for unfair dismissal, it was wrong for the employment tribunal to consider events which happened after a decision to dismiss had been taken.
Mr Mefful was a Citizens Advice Bureau manager. He was made redundant in August 2012 and brought claims for unfair dismissal, whistleblowing, discrimination and victimisation. The tribunal found that the decision to dismiss the Claimant was taken, without his knowledge, on 12th March 2012 due to his lack of capability and engagement, that it was a done deal and that the redundancy consultation was a sham. Mr Mefful became disabled in April 2012 and the employment tribunal found that the dismissal was tainted by disability discrimination, referring to events taking place after April 2012.
The EAT held that the disability could not have affected the dismissal due to the fact that the Claimant was not disabled at the point in time at which the decision to dismiss had been made. The employment tribunal should not have found that the dismissal was disability-related. The EAT also held that it was wrong for the tribunal to find that the Claimant’s dismissal was due to him having whistleblown. The tribunal had found that the dismissal was due to the Claimant’s lack of capability and engagement and therefore, the fact that the Claimant had whistleblown could not be the principal reason for his dismissal, as required under the relevant legislation. The EAT did comment however that a victimisation claim under the Equality Act 2010 could potentially succeed as the protected act need only have a ‘significant influence’ on the employer’s treatment of the Claimant.
The case was remitted to an employment tribunal for reconsideration.
High Court grants injunction against Tesco Stores Limited restraining ‘fire and rehire’
In the High Court case of USDAW and ors v Tesco Stores Limited the High Court has granted an injunction preventing Tesco from ‘firing and rehiring’ employees in order to remove a contractual entitlement to enhanced pay which had been previously negotiated as a permanent retention incentive.
Between 2007 and 2009, USDAW and Tesco agreed an arrangement for ‘Retained Pay’ which became an individual contractual entitlement. Tesco was reorganising its distribution centres and Tesco offered the Retained Pay in order to reduce the risk of it losing all of its existing employees through redundancy. The retained pay was offered as an alternative to redundancy pay and as an incentive to encourage staff to relocate. The Retained Pay was protected and would remain for as long as the employees were employed in their current role. It was clear that it could not be negotiated away and that it was a permanent feature of an individual’s contractual entitlement which could only be changed through mutual consent, on promotion or in the case of an employee requesting changes to working patterns.
In January 2021, Tesco announced its intention to remove Retained Pay. It offered a lump sum payment of 18 months’ Retained Pay in advance in return for giving up the entitlement, failing which employees would be dismissed and offered new terms excluding Retained Pay. USDAW applied to the High Court for a declaration that the affected employees’ contracts were subject to an implied term preventing the removal of the Retained Pay by Tesco and an injunction preventing Tesco from terminating the affected contracts of employment under the circumstances. The High Court granted the relief sought. The High Court did refer to the ‘extreme’ facts of the case in making this decision and made it clear that Tesco could of course terminate the employment of employees for just cause, such as a genuine redundancy situation or for gross misconduct. Therefore, whilst this course of action is now clearly an option available to employees when an employer is proposing to ‘fire and rehire’ employees, such an injunction will only be granted in extreme circumstances such as these.
For advice on Employment Law or HR matters please contact Tom Evans at tom.evans@dtmlegal.com or Elizabeth Judson at elizabeth.judson@dtmlegal.com
