The recent decision of the High Court in Re-use Collections Limited v. Sendall & May Glass Recycling Ltd. serves as a useful reminder for employers: restrictive covenants introduced during the employment relationship (rather than at the point of hiring) require specific consideration if they are to be enforceable. Under UK law, changes to employment terms require consideration if they are to be relied on. The fact the employee keeps their job does not amount to consideration, unless the employee would genuinely have been dismissed if they did not agree. UK law would only rarely justify termination for failure to agree new post-termination restrictions.
It is good practice to periodically review restrictive covenants, to reflect the latest UK case law and any changes to the employee’s role or the business. To give the best chance of enforcing restrictions, employers should however take care to link any new covenants to some form of benefit for the employee. This can be monetary (e.g. linking the new restrictions to pay review) or other benefit (e.g. a promotion) for existing employees. In the instant case, the continued employment of the employee was not considered a benefit, as there was no suggestion that the employee would have been dismissed if he refused to agree to the covenants.