Employment law

Terms of employment

Cantor Fitzgerald International v Bird & others (2002) IRLR 867

This case concerned poaching in the highly competitive London finance sector.

The apparently charmless nature of life in that sector emerges from the judgment; Mr Justice McComb referred to 'the machismo image of Hollywood [being] imported into real life'.

The judge held that the employers were in breach of the implied contractual term of trust and confidence in the manner in which they sought to persuade two of the three employee defendants to accept a change in the way they were remunerated.

The 'hard sell' of the new terms went 'far too far' and amounted to conduct calculated or likely to damage seriously or destroy the relationship of trust and confidence.

The promotion was aggressive and the explanations of the new proposals perfunctory and misleading.

There was much use of swearing and obscenities even by the robust standards of this particular business.

On one occasion the language and comments of the chief executive may well, on their own, have amounted to repudiatory conduct.

Salaries were stopped, albeit only for one day, and large sums of money, virtually unexplained, arrived into the employees' bank accounts.

They did not know where they stood and were concerned that they might be being tricked into accepting the new terms in spite of their express refusal to do so.

There was no consultation of any sort.

Taken overall, the combination of events amounted to a repudiation which the employees were entitled to accept by resigning.

They had not affirmed their contracts by waiting more than two months before resigning with immediate effect.

According to the judge, affirmation is essentially the legal embodiment of the everyday concept of 'letting bygones be bygones', and this was not what occurred.

On the other hand, the employers were not in breach of the implied term of trust and confidence in relation to the third defendant.

He was not intimidated, insulted or threatened and, although he had lost confidence in the management, that is not the same as having the trust and confidence between employer and employee seriously damaged or destroyed.

His contract was not repudiated and thus his own resignation constituted a repudiatory breach.

Accordingly, the non-compete covenant in his contact would be upheld.

Finally, his new employers had unlawfully induced him to breach his contract in circumstances in which they were recklessly indifferent as to whether there were proper grounds to justify his actions.

Compromise agreements

Royal National Orthopaedic Hospital Trust v Howard (2002) IRLR 849

An employee left her job and complained to a tribunal of discrimination on the grounds of sex and marital status and constructive dismissal.

An Advisory, Conciliation and Arbitration Service-conciliated settlement provided that she would be paid a sum 'in full and final settlement of these proceedings and of all claims which the applicant has or may have against the respondent (save for claims for personal injury and in respect of occupational pension rights), whether arising under her contract of employment or out of the termination thereof ...

or arising under the Employment Rights Act 1996, the Sex Discrimination Act 1975 or European Community law'.

Subsequently, she was asked to help a surgeon for one day at the hospital where she had worked.

Her former employers refused to allow this and she brought a claim for victimisation under the Sex Discrimination Act.

The employers argued that the terms of the compromise agreement precluded the victimisation claim.

The Employment Appeals Tribunal (EAT) upheld the tribunal's decision rejecting this argument.

As a matter of public policy, there is no reason why a party should not contract out of some future course of action.

The law does not decline to allow parties to contract that all or any claims, known or not, shall be released.

The question in each case is whether, looking at the compromise agreement objectively, that was the intention of the parties, or whether in order to correspond with their intentions some restriction has to be placed on the scope of the release.

If the parties seek to achieve such an extravagant result that they release claims of which they have and can have no knowledge, whether those claims have already come into existence or not, they must do so in language which is absolutely clear and leaves no room for doubt as to what it is that they are contracting for.

The wording used in the compromise agreement did not preclude the further claim of victimisation.

Tribunal procedure

Hobson v Hackney London Borough Council, The Times, 22 October 2002

The Court of Appeal said that comments by an employment tribunal as to the 'undue sensitivity' or 'hyper-sensitivity' of a witness were best avoided in relation to findings on allegations of discrimination, which is a delicate area in which strong feelings are aroused.

The complainant had a belief that the conduct complained about was offensive and sexually discriminatory, and that subjective view must be taken into account by the tribunal.

But if the tribunal concluded, having considered all the relevant circumstances, that the conduct complained of did not amount to a detriment, whether because on an objective view it could not be taken to be offensive or sexually discriminatory, or for any other reason, the tribunal should so indicate.

It should, however, do so without casting aspersions on the complainant's excessive sensitivity.

Disability discrimination

Kirton v Tetrosyl Ltd (2002) IRLR 840

This decision of the EAT indicates surprising limits to the definition of 'disability' in the context of a 'progressive condition'.

The EAT upheld a tribunal's ruling that an employee's incontinence, following an operation for prostate cancer, did not have 'a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities' within the scope of the statutory definition.

The tribunal was entitled, in this respect, to take account of its members' own experience as one of the factors in deciding that the limited incontinence revealed by the evidence did not meet the definition.

However, this decision is roundly criticised by the editor of the Industrial Relations Law Reports: 'It is unlikely that the drafters of the DDA [Disability Discrimination Act 1995] intended that a fundamental distinction should be drawn between a case where an applicant's impairment was the result of a surgery they underwent and not as a result of the progressive condition which necessitated the surgery.'

Unfair dismissal

J Sainsbury Ltd v Hitt, The Times, 14 November 2002

The Court of Appeal ruled that the range of reasonable responses applied by a tribunal in determining an unfair dismissal claim applies to the conduct of an investigation to determine whether the dismissal was reasonable, as much as it applies to other procedural or substantive considerations.

If the correct approach was taken by an employer in deciding to dismiss, the only conclusion that a reasonable tribunal could have come to was that the investigation into the alleged misconduct was reasonable in all the circumstances.

By Martin Edwards, Mace & Jones, Liverpool