• Employment Tribunal fees: Tribunal fees system struck down as unlawful: in the case of R (on the application of Unison) v Lord Chancellor the Supreme Court, in a landmark judgment, ruled that the fees system operating in the Employment Tribunals and the EAT was unlawful under both domestic and EU law because it had the effect of preventing access to justice. The consequence was that the fees system was rescinded with immediate effect and all fees paid between 29 July 2013 and 26 July 2017 were to be refunded by the Government (at a cost of around £30 million). A reimbursement scheme has since been rolled out and both claimants and respondents who paid fees under the system can apply for a refund. This includes any fees paid by way of a costs order, but it does not extend to any fees paid as part of a settlement agreement. At the time of writing, the Ministry of Justice has reported that under £2 million worth of fees have been refunded to date. As expected, the number of claims lodged with the Employment Tribunal has significantly increased since the abolition of the fees system. The latest Tribunal quarterly statistics (covering July – September 2017) indicate that the number of claims lodged by single claimants has increased by 64% when compared with the same period one year earlier. You can read our full report on the decision here.
  • TUPE: employee liability information (ELI) extends beyond contractual particulars of employment: in the case of Born London Ltd v Spire Production Services Ltd the EAT decided that information about the employment particulars of the transferring employees is not confined to contractual employment particulars. The decision highlights that transferor employers need to take a broad approach to the provision of employment particulars, to cover both contractual and non-contractual entitlements. Upon receipt of the ELI, the transferee employer will need to assess the information and may need to undertake further due diligence to obtain comfort as to the correct nature of the entitlements. The transferee may also be able to rely on contractual warranties and/or indemnities from the transferor regarding the contractual status of the employees' entitlements. However, these solutions may not be readily available to a transferee in a second generation outsourcing situation. This, in turn, can be problematic for the client looking to reassign the contract, since the incoming contractor may insist on relevant indemnities to be given directly by the client. In these situations, the best approach for clients is to ensure such issues are addressed in the original outsourcing agreement. The original outsourcing agreement should ensure that the contractor: (i) is obliged to comply with an incoming contractor's due diligence questions; and (ii) provides warranties and/or indemnities to the client in respect of any inaccurate ELI information which, at least, mirror the warranties and/or indemnities that the client will provide to the incoming contractor. You can read our full report on the decision here.
  • Collective redundancy consultation: the territorial scope of TULRCA 1992: in the case of Seahorse Maritime Ltd v Nautilus International (a trade union) the EAT held that the Lawson v Serco principles which apply to determining the territorial scope of rights under the Employment Rights Act 1996, also apply to the territorial scope of rights to a protective award for failure to consult under s.188 of TULRCA 1992. In this case it meant that seafarers employed under employment contracts governed by English law and living on ships stationed in the UK were international commuters who had a "sufficiently strong connection" to the UK to be able to bring claims before the Employment Tribunal. In practice, this means that employers will be obliged to carry out a collective consultation exercise if, at any one establishment anywhere in the world, it is proposing to dismiss as redundant 20 or more employees within a period of 90 days, who each individually have a sufficiently strong connection with the United Kingdom. The decision has been appealed and is due to be heard by the Court of Appeal on 11 and 12 April 2018.
  • Restrictive covenants: non-compete covenant void for preventing the employee from holding minor shareholdings in competing businesses: in the case of Egon Zehnder Ltd v Tillman the Court of Appeal held that a 6-month non-compete covenant was invalid because it prohibited the employee from holding a minor shareholding in a competing business for investment purposes. This meant that the covenant was impermissibly wide and unenforceable. Turning to the question of severance, the Court held it was only able to sever separate covenants, which was not the case here. It was not prepared to rewrite the covenant to make it work. This decision reminds us that careful drafting is of the utmost importance when it comes to restrictive covenants. Employers should check their restrictive covenant wording to ensure it is tailored to the individual concerned and not impermissibly wide. The language used should be carefully thought through, as broad terms such as "interested in" will be interpreted widely and mean the covenant may fail. Non-compete covenants should also include an appropriately worded carve out permitting minimal shareholding in other companies. You can read our full report on the decision here.