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Employment Law Newsletters

From time to time, and particularly when there are any significant developments in the field of Employment Law, Knight-Webb Solicitors publish a newsletter. To subscribe to this newsletter, please email sunita@knightwebb.com.

You can read previous newsletters online by clicking on the links below:

Employment Law Newsletter Autumn 2021

Employment Law Newsletter Spring 2020

Summer 2022 case update

Interim injunction to enforce 12 month non-compete clause refused – time is of the essence when seeking injunctive relief

When enforcing a restrictive covenant, a court must consider the doctrine of restraint of trade. Any contractual term restricting an employee’s activities after termination will be void for being in restraint of trade and contrary to public policy, unless the employer can show that it is no wider than is necessary to protect the legitimate business interests of the employer.

One of the remedies available to an employer when seeking to enforce restrictive covenants is to apply for an interim injunction which may be granted as a temporary measure to “hold the ring” until matters can be fully explored at trial.

In Planon Ltd v Gilligan [2022] EWCA Civ 642, the Court of Appeal (CA) dismissed an appeal from the High Court’s refusal to grant an interim injunction to enforce a non-compete clause, but for reasons different to those of the High Court. The Court of Appeal’s views on the effect of delay are a reminder to those seeking injunctive relief that time is of the essence.

Planon develops and sells software for managing facilities and its customers include universities, hotels, public buildings and large office blocks. Mr Gilligan was employed as an account manager, and later promoted to sales manager. His contract contained post-termination restrictions which included a non-compete clause which provided that he would not, for 12 months after the termination of his employment, be involved in any capacity with any business concern which was, or intended to be in, competition with any part of Planon’s business which he had been involved with to a material extent in the six months before his employment terminated. Mr Gilligan resigned and joined a competitor, ServiceNow.

The parties were agreed that the effect of the non-compete clause was, in short, to stop Mr Gilligan from working in facilities management software for the 12 month period of the restraint.

In the Court of Appeal, Elisabeth Laing LJ noted that by the time of the hearing before the CA, Mr Gillingham had been employed by the competitor for seven months; the period of restraint had only about four months to run. This was a weighty factor which meant it would now be contrary to the balance of convenience to grant an injunction to enforce it. Much of the damage to Planon’s legitimate interests would already have been caused.

Bean LJ took a difference view of the initial period of delay. He considered that if Mr Gilligan’s job with ServiceNow posed as severe a threat to Planon’s protectable trade secrets or customer connections as the company asserted, the damage would have been done in the first few days, and certainly well before the lapse of two months (which was the time it took between learning of his employment by ServiceNow and the High Court hearing). He said that the status quo should be preserved and that the High Court judge would have been justified in refusing an interlocutory injunction on this ground.

The case is a reminder that the longer the delay to a court hearing the better the chance that the former employee may successfully argue that the damage is done and that the status quo should allow them to continue in their new employment.

November / December 2021 case update

Unfair dismissal whistleblowing claim – Not enough that selection for redundancy was ‘materially influenced’ by protected disclosures.

The recent Employment Appeal Tribunal judgement in the case of Secure Care UK Limited v R Mott illustrates some of the hurdles employees face when bringing whistleblowing claims for automatic unfair dismissal.

The Claimant worked as a Logistics Manager for the Respondent, which provided transport services for NHS patients with mental health problems. He made nine alleged protected disclosures, relating to matters such as inadequate staffing. He was put at risk of redundancy and dismissed.

The tribunal accepted that three of the disclosures qualified as protected disclosures. It found that there was a genuine redundancy situation but that the Claimant’s disclosures had had a material impact on his selection. The tribunal held the Claimant was unfairly dismissed.

The EAT disagreed. The tribunal had applied the wrong test – it had used the ‘materially influences’ test, which applies to s47B Employment Rights Act claims for whistleblowing detriments (as opposed to dismissal), rather than the sole or principal reason test required for s103A ERA claims for automatic unfair dismissal.

The EAT also found that the tribunal had failed in the causation assessment. It had failed to distinguish the impact of the three protected disclosures (and whether these caused the dismissal) from the impact of all nine disclosures.

Knight-Webb Solicitors are specialists in employment law. We pride ourselves in providing a first-rate, cost-effective and personal service to clients. We can advise you on employment law matters including furlough arrangements, redundancies and settlement agreements.

Contact Sunita Knight-Webb on 020 7207 6195 or at sunita@knightwebb.com