The Employment Appeal Tribunal (‘EAT’) reminds us that in order for there to be gross misconduct the employee must have committed a fundamental breach of contract.  

The following are the key points:  

  • Two employees were dismissed for gross misconduct on the basis that they were preparing to compete with their employer.
  • The tribunal found that the employees had been fairly dismissed.
  • The EAT allowed the appeal and stated that as a matter of law there must have been a fundamental breach of contract.
  • The employee may, in the course of his employment, have acquired additional skills and knowledge of the trade in which he had been employed, with the result that he is a more formidable competitor upon termination of his service, but that additional skill and knowledge belonging to him and their exercise cannot be lawfully restrained by the employer.  

Key point: This case serves as an important reminder to employers of their limits in restricting the activities of their employees if this would lead to a restraint of trade. Khan & Anor v Landsker Child Care Ltd (2012)