Employment law

Storer v British Gas plc, The Times, 1 March 2000The Court of Appeal has ruled that a tribunal hearing conducted in the office of the regional chairman, within a secure area, was not a public hearing.

The test of whether a hearing is in public is not whether any member of the public is prevented from attending, but if he would have been able to enter had he wished to do so.

The tribunal's obligation to sit in public is a matter of jurisdiction.

Restrictive covenantsInternational Consulting Services (UK) Ltd v Hart (2000) IRLR 227An employee's contract restrained him from dealing or contracting with any person who, during the 12 months immediately prior to the date of termination, was negotiating with the employer for the supply of services of the type with which the employee was concerned and where the employee or one of his subordinates had dealt with that party.

The High Court held that this covenant was not too vague to be enforced, while recognising there may be cases where it is hard to say if communication with a prospective customer amounts to 'negotiations'.

In this context, 'negotiations' means more than a customer expressing an interest in engaging the employer's services.

What is required is a discussion between the parties about the terms of the contract which both parties have in view and which is a real possibility.

In most cases, it would be clear where there have been negotiations.

Where it is not, the court has to form a view.

Here, the employer had a legitimate interest in preventing approaches to prospective customers with whom there had been negotiations, as opposed to actual customers.

Because of the complexity of the subject matter of the negotiations and the long period over which they were often conducted, the company legitimately regarded the connection with customers resulting from negotiations as forming part of the goodwill of their business requiring protection.

The restriction was reasonable even though it operated where the employee's contact with the customer was unconnected with the negotiations and might not have been within the previous 12 months.

Because of the employee's central and influential position, it was reasonable to say that any previous contact might have given him a rapport with the customer and that he might have had some input into the preparation of a proposal for negotiations, even if he had no actual customer contact in connection with the negotiations.

Transfer of Undertakings (Protection of Employment) (TUPE)Lightways (Contractors) Ltd v Associated Holdings Ltd (2000)IRLR 247The Court of Session ruled that, in deciding whether there was a transfer of an undertaking when the appellants won a maintenance contract previously carried out by the respondents, a tribunal was entitled to take into account that the appellants had tendered for the contract on the basis that TUPE applied.

It is legitimate to have regard not only to the events directly constituting the transaction but also to the circumstances, which may include the attitudes adopted by a party in anticipation of the transaction.

The Court of Appeal had taken the right approach in the case of ECM (Vehicle Delivery Services) Ltd v Cox (1999) IRLR 559.

If the evidence is that a transaction has been deliberately structured to avoid TUPE, a tribunal is entitled to scrutinise with care whether that attempt has been successful.

A declared intention that TUPE will apply, made prior to the transaction by the alleged transferee, may make an inference of transfer easier because it sheds light on the true nature of the transaction.

by Martin Edwards, Mace & Jones, Liverpool