Cases in point - bitesize employment law April 2010

Suzanne Horne of Morrison and Foerster gives her legal round up of case law affecting human resource practitioners.

1. Tullett Prebon v BGC Brokers LP - Team Moves & Constructive Dismissal
2. British Airways Plc v Williams and Others - Holiday Pay ruling may impact all aviation sectors
3. Dunn v AAH Limited - Failure to Obey Instructions Justified Dismissal for Gross Misconduct
4. Sameer Sarkar v West London Mental Health NHS Trust - Informal Action Means Dismissal Unfair
5. Darnton v Bournemouth University - Penalty for breach of ICE Regs.

1.  Tullett Prebon v BGC Brokers LP - Team Moves & Constructive Dismissal

In a decision already featured on HRzone.co.uk, 'Workforce poaching: it's happening', the High Court has held that BGC had conspired with former senior employees of Tullett to poach teams of brokers and induce them to breach their contracts. Tullett employees were targeted and offered more than £40m in signing-on bonuses and fixed-term contracts to move to BGC. The arguments by individual brokers that they were no longer bound by their existing contracts of employment as BGC had breached the implied duty of trust and confidence were unsuccessful.  

Point of interest: Unique features of the broking world may mean that the general lessons to be learned from this case are relatively limited but it does serve as a good illustration of the tactics and strategy that more aggressive competitors may adopt and should prompt HR to consider if the organisation's top talent are on suitably worded contracts of employment which protect the business' legitimate business interests both during and after termination. 

2. British Airways Plc v Williams and Others - Holiday Pay ruling may impact all aviation sectors

As British Airways continues to hit the headlines this month due to the on-going strike action, it is quite used to going to Europe but perhaps not to the European Court of Justice (the 'ECJ'). Under existing arrangements, BA pilots are paid less when on holiday than when working normally. The Supreme Court has this month referred five questions concerning the right to paid holiday for the pilots to the ECJ, requesting clarification of the EU Working Time and Aviation Directives. 

Point of interest:  Although the case relates to how to calculate 'paid annual leave' for airline pilots of British Airways, commentators view the decision as potentially impacting tens of thousands of workers across the aviation sector. 

3. Dunn v AAH Limited  - Failure to Obey Instructions Justified Dismissal for Gross Misconduct

The Court of Appeal has held that an employer was entitled to dismiss two company directors because their actions in failing to report evidence of serious fraud against their employer was a repudiatory breach of the implied duty of trust and confidence. 

The two directors of the UK subsidiary had been instructed to report all risks that could impact profit to the parent company. The UK subsidiary subsequently lost £26m in a fraud by one of its suppliers and the directors only notified the parent company some five months later.

Point of interest: It is unusual for an employer to cite a breach of the implied duty of trust and confidence against an employee. However, even though the facts are relatively extreme it may be a useful decision for HR when considering how best to deal with issues at board level and director performance.

4. Sameer Sarkar v West London Mental Health NHS Trust - Informal Action Means Dismissal Unfair

The Court of Appeal has upheld an employment tribunal decision that where an employer had initially used an informal procedure which was designated for fairly low-level misconduct, the subsequent abandoning of that procedure and dismissal for gross misconduct was unfair as it was not within the range of reasonable responses. 

Mr. Sarkar was a consultant psychiatrist. Complaints were raised about his treatment of colleagues. The NHS Trust implemented its Fair Blame Policy under which the most serious sanction was a written warning. The procedure broke down and Mr. Sarkar was sacked for gross misconduct. The Court of Appeal took the view that it was inconsistent with the Trust's decision to use the Fair Blame Policy.

Point of interest: This is an interesting case in light of the emphasis placed on informal action in the ACAS Code of Practice on Disciplinary and Grievance Procedures. HR should be mindful of the risks attached from taking informal action to resolve a dispute or workplace issue and ensure that it has reserved the right to implement the full range of sanctions when considering the actions of the employee even at the investigation stage.   

5. Darnton v Bournemouth University - Penalty for breach of ICE Regs

The EAT has handed down a decision that a breach of the Information and Consultation of Employees Regulations 2004 (the 'ICE Regulations') should cost the employer £10,000.

Mr. Darton made a request under regulation 7 of the ICE Regulations which triggered the procedure for the negotiation of an Information and Consultation Agreement. Although the university operated the procedure, obtained legal advice and subsequently put an Information and Consultation Agreement in place, it got the date of the original request by Mr. Darnton wrong and it was held to be in breach. 

Point of interest: This is only the second decision where a penalty has been fixed under the ICE Regulations. It illustrates that when dealing with statutory timetables it is better for HR to err on the side of caution as even minor mistakes can be costly.

On a lighter note… Weight Watchers came off worse in its 'weigh-in' with HMRC this month. Weight Watchers had claimed that its group meeting leaders were self-employed but the Tax Tribunal held that in fact the leaders were employees. The weight loss is reported to be in the region of £23m in PAYE and national insurance contributions.

Suzanne Horne of Morrison and Foerster