ELiAction News: August 2019
Welcome to this month’s edition of the Employment Law in Action newsletter
We hope that you are having a great summer! During the holiday season we have been busy providing onsite HR support to a number of our clients, giving hands-on help where and when it is needed the most. Tribunals continue to sit through the summer months and some interesting decisions have been reported. Please see below an overview of some key developments to keep you up-to-date.
We hope you enjoy reading this month’s edition. If you need any further information, please do give us a call to discuss the support we can offer your team, whether this is through our advice line or via our ad hoc HR Consultancy service.
With best wishes
Julia and Ros
In this month’s issue:
It is becoming increasingly common for employees to secretly record meetings at work. Although it is in breach of data protection rules, Tribunals will often treat such recordings as admissible if they are deemed to be relevant to the issues; the exception being if an employee leaves a device in a room to record a meeting that they are not attending.
In the case of Phoenix House Ltd v Stockman the EAT were asked to decide whether or not this constituted gross misconduct and in the course of their decision they gave an opinion on the subject in general. On the facts of the particular case, the employer contended that by making the covert recording the employee was in breach of the implied term of trust and confidence, warranting dismissal. The EAT disagreed and considered that there were a number of reasons why an employee might record a meeting; it could be to keep a record or if the employee feels that they may be misrepresented, none of which would necessarily be a breach of trust and confidence. Whereas recording a meeting with the aim of entrapping the other person or to gain dishonest advantage would be a breach. It may also depend on whether they had been specifically told not to record a meeting and had done so or lied about it.
To make it easier to take disciplinary action, including dismissal, against an employee who is making covert recordings, an employers could add it to the list of examples of gross misconduct in their disciplinary procedure and/or have a policy of reminding people at the start of every meeting that they should not record meetings without the knowledge and permission of the people in attendance.
Supreme Court considers Restrictive Covenants
Where employees have access to information and contacts that could be useful to a competitor, it is prudent to ensure that they have signed a covenant restricting their ability to use such information to compete either for another organisation or in business on their own account. Such restrictions can either be incorporated in to a contract or a separate agreement. Failure to do so could mean that a former employee could set themselves up in competition with you, and within months poach your key customers or employees, without any risk of action.
For the restrictive covenant to be enforceable it must be reasonable and it must protect legitimate business interests; balancing them against the former employee’s right to continue their career in the sector of their choice.
In the case of Tillman v Egon Zehnder  the Supreme Court considered a request for an injunction to stop a former executive from breaching the covenant in her contract that prevented her from working for a competitor for 6 months after her employment had ended. The clause stated that for the relevant period she would not ‘directly or indirectly engage or be concerned or interested in any business carried out in competition with’ her previous employer. The Court decided that the employer had shown that they had legitimate business interests that required protection, but Ms Tillman argued that ‘ being directly interested in’ could include holding a single share and that this was not necessary to protect her former employer’s interests and this invalidated the whole clause.
The Supreme Court agreed that this was an unreasonable restrictions but that it was possible to simply remove the offending words from the sentence and still enforce the clause in relation to being engaged directly or indirectly by a competitor. In other cases, judges have been reluctant to use their ‘blue pencil’ to remove offending words if their removal will modify other words or the meaning of the clause.
In this case, the decision in the employer’s favour was a pyrrhic victory as the Supreme Court’s decision was made two years after Ms Tillman had left their employment, so well after the restriction had expired.
We are happy to advise on whether you should use restrictive covenants and where appropriate, provide you with suitable wording for such covenants or to review your existing wording.
Disclosing Criminal Offences
The Ministry of Justice has announced proposed changes to the rules on what ex-offenders must disclose to employers, with the aim of reducing the barriers to employment faced by ex-offenders. Under the proposals, the period when sentences have to be disclosed will be reduced. There will be exemptions for employees in sensitive roles such as those working with children or vulnerable adults or national security and the changes will not apply to the most serious sentences including serious sexual, violent or terrorism offences.
New Measures to Restrict the Use of Non Disclosure Agreements (NDAs)
The Government has recently published proposals to provide tighter regulation of NDAs. No date has been given for these proposals to become law, but they are designed to address workplace sexual harassment.
These proposals will apply to clauses signed at the start of employment and to clauses included in Settlement Agreements. Such clauses cannot prevent the individual making disclosures to the police, healthcare and legal professionals and they must make this clear.
Where a clause is in a Settlement Agreement, the employee will take legal advice before signing them and there will be a duty on legal advisers to explain any confidentiality provisions. Employees rarely take legal advice before signing a contract, and as has been reported in the news recently, some employers in the leisure and hospitality sector ask employees to sign such agreements at the start of or during their employment.