Lost job today, bit of advice please
Discussion
Breadvan73 said:
UK Courts enforce restrictive covenants daily.
I'd be very interested to see reports of these cases.I know there are reported cases of Gardening Leave being enforced, but the employee is being paid then.
The notion that someone could be prevented from following their chosen profession and therefore prevented from earning money seems far-fetched. What would happen if they had a family to support and tried to sign on for benefits? I'm also struggling to imagine that the Human Rights Act couldn't be brought to bear in such cases.
I daresay courts may have granted injunctions from time to time though - lower court decisions are often random. The problem an ordinary person would have is meeting the cost of challenging such a decision.
Edited by Deva Link on Sunday 20th March 12:05
Deva Link said:
Breadvan73 said:
UK Courts enforce restrictive covenants daily.
I'd be very interested to see reports of these cases.I know there are reported cases of Gardening Leave being enforced, but the employee is being paid then.
The notion that someone could be prevented from following their chosen profession and therefore prevented from earning money seems far-fetched. What would happen if they had a family to support and tried to sign on for benefits? I'm also struggling to imagine that the Human Rights Act couldn't be brought to bear in such cases.
I daresay courts may have granted injunctions from time to time though - lower court decisions are often random. The probablem an ordinary person would have is meeting the cost of challenging such a decesion.
It is nonsense to say that Human Rights legislation does not affect contractual law.
It is superior legislation. Which means it over rules any contract.
In the UK a contract cannot legally overrule statutory rights.
That is just a fact.
Look at the Discrimination law and try and devise a contract to frustrate it.
It cannot be done.
Look at Equal Rights law and try to frustrate it with a clever contract.
Cannot be done.
A contract to limit employment rights cannot remove the individuals right to work in an industry.
There may be opportunities for an employer to protect his rights to retain the specific detailed knowledge that an employee has gained from employment and to prevent copyright material being abused.
But no employer can permanently prevent a worker seeking alternative employment in an industry. Such a contract would be wholly unenforceable.
Think of the recent Security Services and Armed Services Employment cases that have been widely reported and invariably held in favour of the claimant.
Thus the Armed services now have a major problem with discriminating against same sex relationships, and rightly so. They cannot do it under English law.
The Law of the Land will ALWAYS over rule contract law.
If you think about it its bound to otherwise an illegal act would become legal because it is made legal by being in a contract. This cannot be.
This is really not a problem for the individual concerned in the UK today.
OP, I'd take Breadvan up on his kind offer and get some feedback from somebody who is well versed in the subject and based on the exact wording of your contract.
My initial view is that it is unlikely to be enforceable on the basis that-
1. You have been there only 6 months;
2. you are a relatively junior employee with little specialist or confidential knowledge;
3. they are only paying you for a few days but want to enforce a period much greater then that; and
4. the decision to leave was not yours.
I stress that you should either get some proper advice though or atleast take up Breadvan on his offer, but my initial react is that the Courts would regard this as overly onerous and unfair.
My initial view is that it is unlikely to be enforceable on the basis that-
1. You have been there only 6 months;
2. you are a relatively junior employee with little specialist or confidential knowledge;
3. they are only paying you for a few days but want to enforce a period much greater then that; and
4. the decision to leave was not yours.
I stress that you should either get some proper advice though or atleast take up Breadvan on his offer, but my initial react is that the Courts would regard this as overly onerous and unfair.
Any court action would surely be based upon the concept of damage to their company. I think they'd be hard pushed to show that based on what is, with no disrespect meant to the OP, effectively a shop assistant (albeit a knowledgeable one).
If their HR processes involved this sort of clause in all contacts, they were probably a bunch of
s anyway.
If their HR processes involved this sort of clause in all contacts, they were probably a bunch of
s anyway.
Thank you for all your replys, didn't think it would get this much debate going! I will post up the exact wording of the section on My contract when I get back to my computer (posting on phone at the moment).
Once again thanks for your replys and thoughts. Will get back to you later on tonight with the exact wording.
Once again thanks for your replys and thoughts. Will get back to you later on tonight with the exact wording.
davepoth said:
Any court action would surely be based upon the concept of damage to their company. I think they'd be hard pushed to show that based on what is, with no disrespect meant to the OP, effectively a shop assistant (albeit a knowledgeable one).
If their HR processes involved this sort of clause in all contacts, they were probably a bunch ofs anyway.
I entirely agree with this reasonable view but perhaps not the descriptive language.If their HR processes involved this sort of clause in all contacts, they were probably a bunch of
s anyway.I also agree with the penultimate poster.
With regard to Tonker I am interested in your view.
Your contribution contains the remarks:
'An employer should distinguish between information and knowledge that the employee has acquired during the course of employment and information or knowledge that may be regarded as the employer's property (Hays Specialist Recruitment (Holdings) Limited and Another v Ions and Another [2008] EWHC 745 (www.practicallaw.com/resource.do?item=:44372703) and Pennwell Publishing (UK) Ltd v Ornstien [2007] EWHC 1570 (QB) (18 June 2007)). The courts will not prevent an employee from using experience and skill gained on the job.'
Which in my view is precisely the point in this case.
The individual concerned was employed for less than 6 months and not on apermanent contract. I cannot see the remotest chance of successful legal action GIVEN THE FACTS of this case.
HOWEVER from the detail and extent of your comments you clearly know the subject in some detail: could you supply examples please of cases where your
comments:
'to be honest Steffan, I can't let you mislead people on this. You are wrong. A contract can and often does contain terms that mean a disapplication of statutory rights. Given what you've posted elsewhere, you know that too. It is of course true that certain stautory rights are inalienable, but that isn't what you said.' can actually be applied'
Thank you
Steffan, I have regular practical experience of this field and, as I noted above, am co author of a leading textbook on the subject. A permanent covenant could never be enforceable, but that's not the issue here. A covenant reasonable in scope and duration will be enforced to protect a legitimate business interest. There is no relevant overriding statute in this field. The HRA has little or no application in employment law and is not cited in restrictive covenant cases. If you say otherwise, which article of the Convention do you say applies and can you cite a single case in which the Convention has been used to defeat a covenant? I reiterate that injunctions enforcing covenants are regularly granted by the High Court, not just by lower Courts. For recent examples, see TFS Derivatives and numerous other cases.
H Kan's view on the OP's case seems sensible, although I say this subject to seeing the actual covenant in question.
H Kan's view on the OP's case seems sensible, although I say this subject to seeing the actual covenant in question.
Edited by Breadvan73 on Sunday 20th March 18:37
Breadvan73 said:
Steffan, I have regular practical experience of this field and, as I noted above, am co author of a leading textbook on the subject. A permanent covenant could never be enforceable, but that's not the issue here. A covenant reasonable in scope and duration will be enforced to protect a legitimate business interest. There is no relevant overriding statute in this field. The HRA has little or no application in employment law and is not cited in restrictive covenant cases. If you say otherwise, which article of the Convention do you say applies and can you cite a single case in which the Convention has been used to defeat a covenant? I reiterate that injunctions enforcing covenants are regularly granted by the High Court, not just by lower Courts. For recent examples, see TFS Derivatives and numerous other cases.
H Kan's view on the OP's case seems sensible, although I say this subject to seeing the actual covenant in question.
You haven't responded to Tonker's post, which clearly states that the restrictive covenant is void unless the employer can fulfil certain criteria.H Kan's view on the OP's case seems sensible, although I say this subject to seeing the actual covenant in question.
Edited by Breadvan73 on Sunday 20th March 18:37
Which means it's not surprising that plenty of employers do go to court, because unless the facts are considered it's impossible to have certainty, but that doesn't mean they're successful. I'm intrigued as to what proportion of cases are found in favour of the employer.
In my experience, most claims on covenants succeed (perhaps 7 out of 10 or so) but it is impossible to say how many employers decided not to sue because they are unsure of their ground. Most cases do not go beyond the interim stage as they settle after the grant or refusal of an interim injunction.
One of the problems here is that noddy textbooks and law courses have not kept pace with the law in practice. They tend to over emphasise problems of enforcement. Clued up employers have carefully drafted covenants. There's still scope for argument about the extent of confidential information and the like, but on an interim basis the covenant often gets the nod. Turner v British Commonwealth, referred to above, was an example of a non-compete clause being upheld despite being quite extensive.
One of the problems here is that noddy textbooks and law courses have not kept pace with the law in practice. They tend to over emphasise problems of enforcement. Clued up employers have carefully drafted covenants. There's still scope for argument about the extent of confidential information and the like, but on an interim basis the covenant often gets the nod. Turner v British Commonwealth, referred to above, was an example of a non-compete clause being upheld despite being quite extensive.
Edited by Breadvan73 on Sunday 20th March 20:02
Right, contract wording as follows
23.6
You may not, at any time within the period of 6 months following the termination of your employment hereunder, whether as principal, partner, shareholder, director, employee, independent contractor, agent or otherwise, take up employment with or be directly or directly engaged, concerned or interested in any of the following competitor companies:
(Names pretty much every main motor factors and any members of the aftermarket bodies)
Or any other business within the united kingdom which is engaged in a business or activity which competes with the business or activities carried on by the company at the date of termination of your employment in which you were directly concerned in the course of your employment at any time during 6 months prior to termination of you employment.
23.7 you confirm the restrictions set out above are fair and reasonable in all the circumstances as at the date of this agreement and are necessary to protect the goodwill and customer connections of the company.
23.8 you knowledge and agree that you shall be obliged to draw the provisions of this clause 23 to the attention of any 3rd party who at any time before or after the termination of your employment offers to employ, engage or in any way involve you in business and for whom or with whom you intend to work, enter into business, act as a consultant or otherwise be involved during the period for which the restrictions in clause 23 are in force.
That's all printed in the contract which is relevant to this issue
23.6
You may not, at any time within the period of 6 months following the termination of your employment hereunder, whether as principal, partner, shareholder, director, employee, independent contractor, agent or otherwise, take up employment with or be directly or directly engaged, concerned or interested in any of the following competitor companies:
(Names pretty much every main motor factors and any members of the aftermarket bodies)
Or any other business within the united kingdom which is engaged in a business or activity which competes with the business or activities carried on by the company at the date of termination of your employment in which you were directly concerned in the course of your employment at any time during 6 months prior to termination of you employment.
23.7 you confirm the restrictions set out above are fair and reasonable in all the circumstances as at the date of this agreement and are necessary to protect the goodwill and customer connections of the company.
23.8 you knowledge and agree that you shall be obliged to draw the provisions of this clause 23 to the attention of any 3rd party who at any time before or after the termination of your employment offers to employ, engage or in any way involve you in business and for whom or with whom you intend to work, enter into business, act as a consultant or otherwise be involved during the period for which the restrictions in clause 23 are in force.
That's all printed in the contract which is relevant to this issue
That is wide on any view, and in the context of employment on a counter is likely to be seen as too wide and so as unenforceable. The duration of the employment is not an issue going to enforceability, as that has to be determined as at the inception of the contract, but duration could be a discretionary factor.
There was no friction between us, our reasons for parting differ. The letter says I wasn't good enough, which looks like a standard letter but with my name pasted into it.
I believe, as does everyone else in my area of the business that they simply had too many sales employees. As the branches monthly target is set on the number of people in sales, and they were nowhere near hitting it, the easy solution is to reduce the head count. A guy like me on 6 month probation is easier to get rid of than someone on full contract.
I was no worse than the other 2 guys on the counter figures wise, I was snack in the middle.
I believe, as does everyone else in my area of the business that they simply had too many sales employees. As the branches monthly target is set on the number of people in sales, and they were nowhere near hitting it, the easy solution is to reduce the head count. A guy like me on 6 month probation is easier to get rid of than someone on full contract.
I was no worse than the other 2 guys on the counter figures wise, I was snack in the middle.
A clause of that kind could in principle could be enforceable, provided that the employer could demonstrate a sufficient interest in confidential information or trade connection to be protected. A Potential drafting weakness is that the term "core business" could be ambiguous - is it defined in the contract? Trials on covenants are rare, but I've taken two three month non competes to trial for employers in the last three years, with success on each occasion, and several more to the interim injunction stage, but each case is of course fact sensitive. Both of the cases at trial concerned senior sales employees, although only earning about 50K, so you can see how these disputes could be ruinous for an employee who is not backed by the new employer.
This is all the fault of Lord Denning in Littlewood v Harris. Speaking personally, I think that nowadays non compete clauses are too readily enforced, and the test used for the grant of interim injunctions unduly favours the employer.
In the OP's case, it may be that the employer has a one size fits all contract. The restriction might be appropriate to a sales manager, but wouldn't be to a counter bloke.
This is all the fault of Lord Denning in Littlewood v Harris. Speaking personally, I think that nowadays non compete clauses are too readily enforced, and the test used for the grant of interim injunctions unduly favours the employer.
In the OP's case, it may be that the employer has a one size fits all contract. The restriction might be appropriate to a sales manager, but wouldn't be to a counter bloke.
Breadvan73 said:
A clause of that kind could in principle could be enforceable, provided that the employer could demonstrate a sufficient interest in confidential information or trade connection to be protected. A Potential drafting weakness is that the term "core business" could be ambiguous - is it defined in the contract? Trials on covenants are rare, but I've taken two three month non competes to trial for employers in the last three years, with success on each occasion, and several more to the interim injunction stage, but each case is of course fact sensitive. Both of the cases at trial concerned senior sales employees, although only earning about 50K, so you can see how these disputes could be ruinous for an employee who is not backed by the new employer.
Cheers for taking the time to come back to me.That clause comes from a 'manager grade' contract for an employee at a firm of accountants. I don't know whether 'core business' is defined anywhere in the contract, but I would think that it would be reasonable to assume that it is going to mean that employment at another firm of accountants would be covered by the clause.
Restraints on professional service employees have to be carefully drafted if they are not unduly to restrict the ability of the employee to practise his or her profession. The clause arguably goes too far as it appears to prevent the employee from practising accountancy, without geographical limit. A non solicitation of and non dealing with clients clause would be more appropriate in my view.
If the employee is not an accountant and could work as a manager in another type of business, the clause may be less objectionable, but it would still need a firm basis in protectable information or trade connection.
If the employee is not an accountant and could work as a manager in another type of business, the clause may be less objectionable, but it would still need a firm basis in protectable information or trade connection.
Edited by Breadvan73 on Monday 21st March 10:02
The employee is a chartered accountant and the subsequent clause (not posted) goes on to restrict 'soliciting/enticing away' of clients and colleagues which is fine.
The clause regarding restrictions on working for competitors is apparently standard for all staff of that grade at the firm. Seems unreasonable to me, too.
The clause regarding restrictions on working for competitors is apparently standard for all staff of that grade at the firm. Seems unreasonable to me, too.
Edited by nsi on Monday 21st March 11:11
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