Recent weeks have seen a number of significant cases on a variety of employment issues.Equal opportunitiesThe decision in R v Secretary of State for Employment, ex p.

Equal Opportunities Commission [1994] The Times, 4 March, made headline news - and for good reason.

The House of Lords ruled that certain 'threshold' provisions of the Employment Protection (Consolidation) Act 1978 were incompatible with EU law.Briefly, those provisions exclude part-time workers from the right to claim unfair dismissal or statutory redundancy pay unless - in the case of those working for eight hours per week or more - they have been continuously employed for at least five years, rather than the normal period of two years.A majority of the law lords (Lord Jauncey dissenting) held that the Equal Opportunities Commission (EOC) had locus standi to bring the proceedings because, if the threshold provisions - which were admittedly discriminatory because the great majority of part-time workers are women - were not objectively justified, then steps taken by the EOC to achieve a change in the law could be regarded as taken in the course of working towards the elimination of discrimination.Judicial review was available for the purpose of securing a declaration that the UK primary legislation was incompatible with European law in the light of decisions such as Factortame Ltd [1990] 2 AC 85.

A declaration that the threshold provisions were incompatible with European law was consistent with Factortame and the Divisional Court was an appropriate forum to decide the substantive issues in the light of Bilka-Kaufhaus GmbH v Weber von Harz [1987] ICR 110.However, the individual applicant (a part-time cleaner who had been made redundant by a local authority before she had been continuously employed for five years) who had been brought into the proceedings was not entitled to seek judicial review.

Hers was a private law claim which had been entrusted by statute to the industrial tribunals.The law lords concluded that the secretary of state had failed to discharge the onus of showing that the threshold provisions were objectively justified.

The secretary of state argued that the effect of the provisions was that more part-time work was available than would be the case if employers were liable to compensate part-timers for unfair dismissal, and to make redundancy payments to them.

Legislation that permitted a significant pay differential nationwide between full-timers and part-timers would, however, be a gross breach of the principle of equal pay, and the House of Lords concluded that it 'could not possibly be regarded as a suitable means of achieving an increase in part-time employment'.Similar considerations applied to legislation that reduced the indirect cost of employing part-time labour.

The evidence before the Divisional Court had not established that the threshold provisions had actually resulted in greater availability of part-time work than would be the case without them.Not surprisingly, the EOC has hailed this as a major victory for part-timers, although some employers argue that heavy job losses will occur as a result.

The government has, in any event, agreed to implement the House of Lords' judgment.

Practitioners who have previously advised part-timers - including those who work less than eight hours per week - that, because of the threshold provisions, they were unable to present complaints to an industrial tribunal, may now wish to reconsider that advice - even if the normal statutory time limit for preventing such complaints has expired.

Clearly, if late claims are to be presented in the light of EOC, no time should now be lost in presenting them.InsolvencyThe Court of Appeal's decision in Powdrill v Watson [1994] The Times, 1 March, better known as the Paramount Airways case, seemed less obviously newsworthy.

However, the ruling that, where an administrator of a company continues more than 14 days after his or her appointment to employ staff and pay them in accordance with their previous contracts, he or she is impliedly adopting those contracts, has caused a furore in the insolvency world.Administrators were appointed to the company on 7 August 1989.

On 14 August they sent a letter to all employees stating that the company would continue to pay salaries for the interim, but that they did not and would not adopt or assume personal liability in respect of the employees' contracts.

In September the administrators wrote a letter to all captains and first officers stating that additional payments would be made to them provided they remained in employment as at 31 October.

It was reiterated that the administrators were not adopting any or all terms of any employment contracts.By 13 November, the administrators realised that they would not find a buyer and, on 5 December, letters of dismissal were sent to all staff terminating their contracts retrospectively from 13 November.

Two captains issued a petition under s.27 of the Insolvency Act 1986 and the administrators issued a summons seeking directions from the court.The administrators argued that, to adopt the contracts of employment, they had to do something positive.

The Court of Appeal rejected that proposition: the whole function of administration normally requires administrators to carry on the business of the company with a view either to trading out of difficulties into profit or to find a buyer.

Employees are therefore necessary and, if the administrators want to use the existing staff, they must either adopt the existing contracts or negotiate new contracts.The letter of 14 August 1989 was too obscure to be construed as an offer to employees of employment on new contracts.The Society of Practitioners in Insolvency described this decision as 'the most serious threat to business rescue in the experience of its members' and argued that it might force administrators and receivers to sack all employees and close down businesses if a sale could not be achieved within a fortnight of their appointment.

As a result, the government announced that it would legislate to overturn the decision, with the new rules becoming effective from midnight on 14 March 1994.Restrictive covenantsTwo recent decisions deserve careful consideration by practitioners called upon to draft restrictive covenants in employment contracts.

In Hanover Insurance Brokers Ltd v Schapiro [1994] IRLR 82, the Court of Appeal refused to reinstate an injunction restraining four defendants from soliciting or enticing any employees of their former employers to terminate their employment.

The former employers were insurance brokers and they argued that the goodwill of their business depended on their staff.'So, in a sense, it does,' said Dillon LJ, 'as with any other company, but that does not make the staff an asset of the company like apples or pears or other stock in trade.' Nor did it entitle the former employers to impose a covenant against competition on the defendants.

The restriction as drawn would have applied to all the plaintiffs' employees, irrespective of expertise or juniority, and would apply to those who were employees at the time of the solicitation or enticement even if they had only become employees after all the defendants had left the plaintiffs' service.However, orders against two of the defendants enforcing covenants against canvassing, soliciting or endeavouring to take away the business of customers were not unreasonably wide.

Although the covenants referred to customers of any company within the plaintiffs' group, the terms of those covenants could be construed as applying only to the business and customers of the plaintiffs.

Nor was the order against the defendant, who had formerly been the plaintiffs' chairman, discharged, even though the covenant in question precluded him from acting for people who had been his customers before he joined the plaintiffs, and whom he had then introduced as customers to the plaintiffs.The Court of Appeal followed the robust approach of Denning LJ in M & S Drapers (a firm) v Reynolds [1957] 1 WLR 9, in which he said: 'A managing director can look after himself.' As Dillon LJ said, a chairman is 'at least as well placed as the managing director'.

Interestingly, Nolan LJ accepted that there was an apparent difference between 'the unsympathetic approach' towards the construction of excessively wide covenants adopted by the Court of Appeal in JA Mont (UK) v Millers [1993] IRLR 172, and 'the more flexible and supportive approach' adopted by Lord Denning MR and, less explicitly, by Megaw LJ in Littlewoods Organisation Ltd v Harris [1987] 1 WLR 1472.

If that difference were to be reconciled or resolved, however, that would have to be done by a full court at a final hearing.The Court of Session's ruling in Living Design (Home Improvements) Ltd v Davidson [1994] IRLR 69, is also significant.

Lord Coulsfield said: 'A restrictive covenant which is phrased so as to operate on the termination of the employment of an employee, however that c omes about, and whether lawfully or not, is manifestly wholly unreasonable.' Observations to that effect in Briggs v Oates [1990] IRLR 472, albeit obiter, were approved.

Yet practitioners will be aware that many employment contracts contain restrictive covenants which purport to apply even in the event of unlawful termination.

Given that even a 'saving clause' did not avail the petitioners in Living Design, it may be necessary to advise some employer clients to reconsider the terms upon which they seek to restrain their employees' activities once the employment has ended.Illegal contractsThe application in employment law of the old doctrine of ex turpi causa non oritur actio has given rise to much debate.

Annandale Engineering v Samson [1994] IRLR 59, concerned a greyhound kennel-hand who received sums varying between £10 and £100 about six times a year which he did not regard as subject to income tax.

When he claimed unfair dismissal, his former employers argued that the contract of employment had been illegally performed and that he was therefore not entitled to enforce it.The employment appeal tribunal (EAT) sitting in Edinburgh agreed with an industrial tribunal that an occasional payment to an employee without deduction of tax does not necessarily render the contract unenforceable as an illegal one, or one which is being illegally performed.

The question depends on the particular facts and circumstances, including the amount and frequency of the payments and the reasons for which they are made.

One way of looking at it may be to ask whether the payment can properly be said to form part of the employee's remuneration, in the sense of the remuneration defined in the contract or implicit in its performance.Different facts led to a different outcome in a Scottish case heard a few days earlier, Salvesen v Simons [1994] IRLR 52.

An employed estate manager also obtained private income from certain properties and a farming consultancy service in which he was a partner.

During his employment, he persuaded his employers to divide his remuneration in two - part taxable salary and part management fee paid to the partnership without deduction of tax.An industrial tribunal concluded that the arrangement was technically illegal but that none of the parties knew, believed or suspected that it was illegal.

A majority of the tribunal therefore held that 'the minor and technical breach of tax collection rules' was not sufficient to defeat the claim.

The EAT, after an extensive review of the authorities, allowed the employers' appeal.Ignorance of the illegal character of the agreement does not prevent the application of the ex turpi causa rule: although not a direct or obvious fraud, the arrangement involved a misrepresentation to the Inland Revenue that there was a proper basis for the payment to the partnership.

The EAT acknowledged that the legal principle of ex turpi causa 'must be applied pragmatically and flexibly rather than rigidly and automatically'.Nevertheless, bearing in mind that the employee had initiated the illegal arrangement, he was not permitted to pursue his unfair dismissal complaint.

The EAT acknowledged that this meant that he suffered 'a severe penalty for a minor illegality which cannot, in all probability, have cost the Revenue any significant sum in lost tax', but concluded that: 'It is not necessarily inequitable that persons who seek to take advantage out of the tax system, misguidedly or otherwise, should not be entitled to be treated as if they were employed under a normal contract of employment.' That will no doubt, for some, be a sobering thought.1994