Lawyers Afternoon Update Thursday 14th September 2017 - - PowerPoint PPT Presentation

Partners Employment Lawyers

Afternoon Update

Thursday 14th September 2017 www.partnerslaw.co.uk 02073746546 - 07809694400

Hina Belitz

Hina Belitz is a senior employment lawyer, author and trainer with over 20 years’ experience. She has headed up employment teams at a number of City firms, including DLA Piper, Dentons and Pinsent Mason, and has, for the last eleven years, been managing partner of her own City of London law firm – Partners Employment Lawyers – now part

• f Excello Law. She works with a team including solicitor

She and her teams have been listed in the Legal 500. Hina acts for a wide range of companies including financial institutions, IT, service and property organisations, charities and educational establishments, as well as for international royalty, and UK-based embassies advising on employment law, supporting on strategy and board level decision

• making. She also advises senior executives on termination

and settlement agreements. She has personally conducted the advocacy in over 80 claims at Employment Tribunal, Employment Appeal Tribunal and the High Court, often partnering with barristers to assist with representation. The most substantial part of her work is working with executive teams to advise on employment law when viewed alongside commercial strategy ensuring the smooth running

• f their organisations, especially when faced with

redundancies, TUPE and corporate re-organisations. Partners Employment Lawyers, founded by managing partner Hina Belitz in 2006, has merged with national, new-model law firm Excello Law. Based in the City of London with a significant portfolio of corporate and executive clients, the merger will see Hina, employment solicitor Ben Payne and paralegal Zahra Mahmood bring additional strength and experience to the Excello Law employment team. Hina qualified in 1995 building her career of over 20 years within major City firms including DLA Piper, Pinsent Masons and Dentons before establishing her own practice in 2006. She has significant experience in Employment Tribunal, Employment Appeal Tribunal and High Court cases and her teams have been recognised in the Legal 500. She is a recognised trainer and commentator on employment law, co- authoring the ‘Penguin Guide to Employment Rights’ with preface by Cherie Booth, barrister and wife of Tony Blair, and published her first fictional novel, ‘Set Me Free’ in 2016, named as one of Amazon’s Best Debut Novels last year. She was approached by Morgan Freeman and his team to feature in a National Geographic series on inspirational people due for release later this year called ‘The Story of Us’.

‘We appointed Hina and her team to represent us in protracted Employment Tribunal proceedings involving complex legal issues and a difficult personality. Hina and her team guided us with great care and focus and her professional consultative style assisted us in making key strategic decisions. We won the Employment Tribunal claim hands down which we know deflected much larger threatened proceedings. This was an important case for us as we were able to publicly demonstrate that we will stand against those who unfairly challenge us when we have sought only to do the right thing. This was a great victory not only for the management, but because of the message it sent to everyone in the company. Hina’s guidance, along with the hard work of her dedicated team, meant we received the advice, and representation necessary to enabled us to achieve this outcome.’ NICK WATSON, DIRECTOR, PEARL & COUTTS LTD ‘A special thanks to Hina Belitz for her interesting talk on what we must take into account before employing someone at any level. She carried us through what could be a “heavy weight” topic with such ease that we could have listened to her for hours!’ MARILENA NARBONA, THE ATHENA NETWORK ‘I was very nervous and unsure about my situation, however, right from the initial meeting Hina and Ben guided me and managed my expectations in a very personal and professional manner. They negotiated on my behalf a package which reflected the situation and was fair so that I can maintain professional relationships with the firm for the future. A win for both sides. I would happily recommend Partners Employment Lawyers to anyone.’ KP, SENIOR EXECUTIVE, CITY OF LONDON ‘I have worked with Hina Belitz on numerous complex employment issues within our business. We have an open and consultative relationship which ensures risks are addressed in a consistent manner. This has led to the honesty and openness I rely on to make key strategic decisions for the business.’ HEAD OF HUMAN RESOURCES & RECRUITMENT, BUSINESS MONITOR INTERNATIONAL

Team

• Ben Payne - Solicitor
• Zahra Mahmood - Paralegal

Guest Speakers

• Gus Baker - Outer temple Chambers
• Mukhtiar Singh - Six Pump Court Chambers
• Smita Tharoor - Unconscious bias

Topics

• General Data Protection Regulation
• Employment Tribunal Fees
• Maternity Cover
• Unconscious bias
• Post Termination Restrictions

General Data Protection Regulation

25th May 2018

Date for your diary - UK data protection law will change on 25 May 2018 when the EU General Data Protection Regulation takes effect, replacing the Data Protection Act 1998.

Why?

• Significant advances in information technology
• Fundamental changes to the ways in which individuals and organisations communicate

and share information

• EU member states have take different approaches to implementing the Data Protection

Directive

What will this achieve?

General Data Protection Regulation:

• more updated
• more future-proof and forward-looking
• more technology-agnostic
• more harmonised data protection law

Impact of the GDPR on business and what they should be doing now

Many of the principles in the new legislation are much the same as those in the current Data Protection Act. If you are complying properly with the current law, then you have a strong starting point to build from. But there are important new elements and some things will need to be done differently. The GDPR will introduce several new concepts and approaches, some of the most significant of which will be outlined.

Key concepts and changes

KEY CONCEPT

Greater harmonisation The GDPR introduced a single legal framework that applies across all EU member states. This means that businesses will face a more consistent set of data protection compliance

• bligations from one EU member state to the next.

CHANGES

Positive change The GDPR is likely to require significant changes for many businesses, and many of these changes will require substantial lead time. Member states will have some flexibility over decisions, for example, the age at which online service providers must verify that parental consent has been given before providing the services can be set at 13 to 16 years of age.

Key concepts and changes

KEY CONCEPT

Expanded territorial scope Non-EU data controllers and data processors will be subject to the GDPR if they either:

• offer goods or services to data subjects in the EU irrespective of whether payment is

received.

• Monitor data subjects behaviour insofar as their behaviour takes place within the EU.

This means that many non-EU businesses that were not required to comply with the Data Protection Directive will be required to comply with the GDPR.

CHANGES

Broadly negative change for most businesses Businesses established outside the EU are not subject to the Data Protection Directive should consider whether any of their entities are subject to the GDPR.

Key concepts and changes

KEY CONCEPT

Increased enforcement powers Currently, fines under national law are low (for example, the UK maximum fine is £500,000). The GDPR will significantly increase the maximum fines based on a two tier basis:

• Up to 2% of annual worldwide turnover of the preceding financial year or 10 million euros

(whichever is the greater) for violations relating to internal record keeping, data processor contracts, data security and breach notification, data protection officers, and data protection by design and default.

• Up to 4% of annual worldwide turnover of the preceding financial year or 20 million euros

(whichever is the greater) for violations relating to breaches of the data protection principles, conditions for consent, data subjects rights and international data transfers.

CHANGES

Broadly negative change for most businesses Businesses that had previously regarded non-compliance with EU data protection law as a low-risk issue will be forced to re-evaluate their positions.

Key concepts and changes

KEY CONCEPT

Consent, as a legal basis for processing, will be harder to obtain The Data Protection Directive distinguished between ordinary consent (for non-sensitive personal data) and explicit consent (for sensitive personal data). The GDPR requires a very high standard of consent, which must be given by a clear affirmative action establishing a freely given, specific, informed and unambiguous indication

• f the individual's agreement to their personal data being processed, such as by a written

(including electronic or oral) statement.

CHANGES

Broadly negative change for most businesses Businesses that rely on consent, as a legal basis for processing personal data, will need to carefully review their existing practices to ensure that any consent they obtain indicates affirmative agreement from the data subject (opt in) (for example, ticking a blank box). Mere acquiescence (for example, failing to un-tick a pre-ticked box) does not constitute valid consent under the GDPR.

Key concepts and changes

KEY CONCEPT

The Risk-based approach to compliance The GDPR adopts a risk-based approach to compliance, under which businesses bear responsibility for assessing the degree of risk that their processing activities pose to data subjects.

CHANGES

Positive change Recommendations:

• Create awareness among the senior decision makers in the business.
• Audit and document the personal data they hold, recording where it came from and who it

is shared with.

• Review the legal basis for the various types of processing that they carry out and

document this.

• Review privacy notices and put in place a plan for making any changes to comply with the

GDPR

Key concepts and changes

KEY CONCEPT

The "one-stop shop” Under the Data Protection Directive, each Supervisory Authority may exercise authority over businesses operating on its territory. Under the GDPR, a business will be able to deal with a single SA as its "lead supervisory authority" across the EU.

CHANGES

Positive change Multi-nationals and businesses that operate in more than one EU member state will see a substantial change, as the one-stop shop will mean that they predominantly interact with a single SA as their "lead authority" (rather than multiple SAs).

Key concepts and changes

KEY CONCEPT

Privacy by design and by default, privacy impact assessments and prior consultation Mandatory privacy by design and default = Businesses will be required to implement data protection by design and by default, at the time of the determination of the means for processing and at the time of the processing itself. Mandatory privacy impact assessments = Businesses will be required to perform data protection impact assessments before carrying any processing that uses new technologies that is likely to result in a high risk to data subjects. Mandatory prior consultation = Where a PIA indicates that the processing would result in a high risk to individuals, the business must consult, before any processing taking place, with the SA.

CHANGES

Broadly negative change for most businesses Recommendations:

• Take data protection requirements into account from the inception of any new technology,

product or service that involves the processing of personal data, with an ongoing requirement to keep those measures up-to-date.

• Conduct data protection impact assessments where appropriate.

Key concepts and changes

KEY CONCEPT

Registrations Instead of registering with an SA (supervising authority), the GDPR will require businesses to maintain detailed documentation recording their processing activities and the GDPR specifies the information this record must contain. These obligations do not apply to an organisation employing fewer than 250 people unless the processing is likely to result in high risk to individuals, the processing is not occasional or the processing includes sensitive personal data.

CHANGES

Broadly neutral change for most businesses Recommendations:

• Take data protection requirements into account from the inception of any new technology,

product or service that involves the processing of personal data, with an ongoing requirement to keep those measures up-to-date.

• Conduct data protection impact assessments where appropriate.

KEY CONCEPT

New obligations of data processors The GDPR introduces direct compliance obligations for processors. Whereas under the Data Protection Directive processors generally are not subject to fines or other penalties, under the GDPR processors may be liable to pay fines of up to 4% of annual worldwide turnover of the preceding financial year or 20 million euros, whichever is greater.

CHANGES

Broadly negative change for most businesses The GDPR is likely to substantially impact both processors and controllers that engage processors, in the following ways:

• The increased compliance obligations and penalties for processors are likely to result in an

increase in the cost of data processing services.

• Negotiating data processing agreements may become more difficult, as processors will

have a greater interest in ensuring that the scope of the controller's instructions is clear.

• Some processors may wish to review their existing data processing agreements, to ensure

that they have met their own compliance obligations under the GDPR.

Key concepts and changes

KEY CONCEPT

Strict data breach notification rules The GDPR requires businesses to notify, the SA of all data breaches without undue delay and where feasible within 72 hours unless the data breach is unlikely to result in a risk to the

• individuals. If this is not possible it will have to justify the delay to the SA by way of a

"reasoned justification”. If the breach is likely to result in high risk to the individuals, the GDPR, requires businesses to inform data subjects "without undue delay", unless an exception applies.

CHANGES

Broadly negative change for most businesses Businesses will need to develop and implement a data breach response plan enabling them to react promptly in the event of a data breach. Complying with the data breach reporting

• bligations in the GDPR will also entail a significant administrative burden for businesses,

which may increase costs.

Key concepts and changes

KEY CONCEPT

The right to erasure (‘’right to be forgotten’’) Individuals will have the right to request that businesses delete their personal data in certain circumstances (for example, the data are no longer necessary for the purpose for which they were collected or the data subject withdraws their consent).

CHANGES

Broadly negative change for most businesses In general, the rights of data subjects are expanded under the GDPR. As a result, businesses will need to devote additional time and resources to ensuring that these issues are appropriately addressed. In particular, businesses should consider how they will give effect to the right to erasure (right to be forgotten), as deletion of personal data is not always straightforward.

Key concepts and changes

KEY CONCEPT

Data subject access requests Business must reply within one month from the date of receipt of the request and provide more information than was required under the Data Protection Directive.

CHANGES

Broadly negative change for most businesses Businesses should plan how they will respond to data subject access requests within the new time scale and how they will provide the additional information required.

Key concepts and changes

BREXIT and the GDPR

In the light of the UK's decision, on 23 June 2016, to leave the EU, many businesses were left wondering whether to comply with the GDPR. The widely held view was that the UK would still wish to be considered an "adequate" jurisdiction for data protection to enable trading with the EU.

Employment Tribunals

Employment Tribunal Fees

Fees were introduced in both the employment tribunals and the EAT on 29 July 2013. In the tribunals both issue and hearing fees were payable by a single claimant or by a fee group (in a multiple claim). In the EAT, an appellant was responsible for an issue fee and a hearing fee. Claims are subdivided into the administratively simple 'Type A' claims, with fees of £160 and £230 respectively; and 'Type B' unfair dismissal or discrimination claims, with fees of £250 and £950. Flat fees apply to employment appeal tribunal (EAT) cases. A remission system operated to exempt people on low incomes from having to pay the full fees.

Abolition of fees regime following judicial review

In R (on the application of Unison) v Lord Chancellor (2017), an application for judicial review, the Supreme Court on 26th July 2017 unanimously declared that employment tribunal and EAT fees are unlawful, under both domestic and EU Law, and quashed the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 (SI 2013/1893) (Fees Order 2013) on the basis that it:

• Effectively prevented access to justice, in breach of common law and constitutional rights.
• Was indirectly discriminatory under section 19 of the Equality Act 2010. (i.e because the

higher fees for bringing more complex claims put women at a particular disadvantage. Women are statistically more likely to bring these claims, for example claims for pregnancy discrimination.)

• Was contrary to EU law as it imposed disproportionate limitations on the exercise of EU-

derived rights. ET1 forms (for the present moment) can only be lodged online in light of this recent change.

Seeking refunds of tribunal fees paid since July 2013

Since the Supreme Court declared that the Fees Order 2013 must be regarded as unlawful, the effect of the decision is that all fees paid since 29 July 2013 must be reimbursed by the government, and fees are no longer payable for future claims. The government has accepted the court's ruling, and is putting in place systems for reimbursing all fees paid to date. It remains to be seen whether the government will introduce a replacement fee regime. While it is possible that a different system with lower, more proportionate fees would be lawful, it is unlikely that this will be proposed in the short term, given the government's slim majority, the relatively low amount of revenue which was yielded by the fee regime, and the need to prioritise Brexit issues.

Starting a claim

To start a claim, a claimant must present their claim form (ET1) to the tribunal within the relevant time limit. A claimant may apply for an extension of time to submit a claim in some circumstances.

Acceptance or rejection of claim

When an ET1 is received at the tribunal it will be checked to ensure it meets the minimum requirements of a valid claim. There are five grounds on which the tribunal will reject all or part of a claim:

• 1. The prescribed form has not been used.
• 2. The form does not contain the required information.
• 3. It is outside of the tribunal's jurisdiction.
• 4. It is in a form which cannot sensibly be responded to.
• 5. It is otherwise an abuse of process.

If the tribunal rejects the claim, the claim form will be returned to the claimant with a notice of rejection explaining the mistake made, what the claimant needs to do to rectify the problem and how to apply for a reconsideration if they think the decision to reject was wrong, or that the notified defect can be rectified. There used to be a sixth ground for rejecting a claim: the ET1 was not accompanied by an issue fee or a fee remission application. This ground no longer applies following the abolition of employment tribunal fees.

Responding to a claim

Where a tribunal accepts a claim, it will send a copy to the respondent together with:

• An ET3 form, to be used by the respondent to submit its response.
• A notice that explains:
• whether any part of the claim has been rejected;
• how to present a response to the claim;
• the time limit for doing so; and
• what

may happen if a response is not entered within the time limit. The respondent must present its response to the tribunal within 28 days of the date on which the tribunal sent out the ET1. It can apply for an extension if unable to do so.

Acceptance or rejection of the response

When preparing to submit a response, a respondent needs to be aware of the following key requirements. It must:

• Use the prescribed ET3 form.
• Ensure it provides the required information (that is, the respondent's full name, the respondent's address and

whether the respondent wishes to resist any part of the claim).

• Present its completed ET3 to the tribunal within the 28-day time limit, or make an application for an extension of

time to do so. If it does not do so, the response will be rejected. An employment judge can issue a judgment in respect of all or part of the claim, or fix a hearing in order to determine the claim if, on the expiry of the 28-day time limit to present a response, one of the following applies:

• The respondent has stated that it does not want to contest the claim.
• No response has been presented.
• Any response received by the tribunal has been rejected and no application for a reconsideration is outstanding.

Sift Stage

Once the response has been accepted, the case will be passed to an employment judge who will consider the claim and response and decide from the papers:

• Whether the claim or response should be struck out, either in full or in part, because it has no reasonable

prospects of success.

• Whether the claim should be struck out, either in full or in part, because it does not contain complaints

within the jurisdiction of the tribunal.

• Assuming the case should proceed, what case management directions are required to get the case ready

for the final hearing. If the employment judge decides that all or part of the claim or response should be struck out, they will write to the parties setting out their views and the reasons for them and explaining that the claim or response will be dismissed on a future date, unless the relevant party writes to the tribunal setting out the reasons why their claim or response should not be struck out before that date. If the party submits their written reasons within the deadline, they will be considered by the employment judge who will either allow the claim or response to proceed, or fix a hearing to determine whether to do so. The other party may attend the hearing, but they are not required to do so.

Case management

Once the claim and response have been received and accepted by the tribunal, employment judges and tribunals have considerable power and freedom to manage the progression of cases to final hearing through the use of orders and directions, whether on the application of either party or on their own initiative. These enable the tribunal to:

• Identify the issues between the parties at an early stage.
• Make any necessary orders (for example, for the provision of further particulars, disclosure, the exchange
• f witness statements or to secure witness attendance).
• Impose

a timetable by which the parties are required to prepare for the final hearing. An employment judge will review the tribunal's file after the response has been received at the sift stage and will then typically do one of two things in relation to case management:

• Issue a case management order setting out steps for both parties to take and a timetable for doing so.

List a preliminary hearing to consider case management issues and, potentially, substantive preliminary issues such as whether the tribunal has jurisdiction to hear the claim. The parties may also apply for general or specific orders to be issued, varied or revoked at any stage of the proceedings.

Conciliation of tribunal claims

Acas conciliation Pre-claim Acas early conciliation applies to most cases. Acas may also continue to assist the parties in reaching a settlement after proceedings have been issued.

Witnesses

Tribunals will generally direct that witness evidence must be provided in the form of written statements, to be exchanged between the parties (usually simultaneously) before the final

• hearing. Even where such a direction is not given, a written statement of a witness's

evidence should be prepared. When a party believes that a person has relevant evidence but will not attend the tribunal to give this evidence voluntarily, they may apply to the tribunal for a witness order compelling that person to attend.

The day of the hearing

Tribunals are less formal than other courts. Parties can be represented by solicitors, barristers, trade union representatives or non-legally-qualified consultants, or can represent

• themselves. No wigs or gowns are worn. Parties and witnesses remain seated for most of

the hearing. The tribunal can decide the order in which it hears from parties and witnesses and can take hearsay evidence into account. The tribunal may consist of an employment judge and two lay members. However, in many cases, including claims for unfair dismissal, the employment judge sits alone.

Things that people get wrong

• Open questions and closed questions
• Don’t guess what you might have done
• Say if you don’t remember – it’s ok
• Address the judge and lay members

– not the barrister for the claimant

• Don’t get riled up or angry
• Don’t guess what the judge is thinking
• The bundle and what you need to remember
• Watch your body language
• Stay calm
• Tell the truth – the forum is all about lie detection

Judgement

At the end of the final hearing, the tribunal will try to come to a unanimous decision on all the issues before it and will give its decision in the form of a judgment. A judgment:

• May be given orally at the end of a hearing or it may be reserved and a written judgment

subsequently issued.

• Might only deal with the question of liability, with remedy to be determined at a later hearing, or it

may deal with both liability and remedy.

• Must include reasons. These can be given orally at the time the judgment is issued or reserved

to be given in writing at a later date. If reasons for a judgment are given orally, written reasons will only be provided if they are requested by one of the parties:

• At the hearing.
• In writing, within 14 days of the date on which the judgment was sent to the parties. This time

limit may be extended by an employment judge if they consider it just and equitable to do so.

Costs

Costs do not "follow the event" in employment tribunals as they do in civil courts. If a party is successful in bringing or defending a claim before the tribunal, they will not necessarily benefit from an order that the unsuccessful party pays their costs. The costs regime in employment tribunals differentiates between orders that might be made in favour of legally represented parties (costs orders) and those that might be made in favour

• f unrepresented parties (preparation time orders).

A tribunal or employment judge may also make a wasted costs order against a party's representative.

Maternity

Key rights…

The key rights for employees are:

• Time off for antenatal appointments
• Health and Safety protection while pregnant and breastfeeding
• Up to 52 weeks’ maternity leave (made up of ordinary maternity leave and additional

maternity leave, regardless of length of service

• Statutory maternity pay for up to 39 weeks
• The right to return to the same job
• Priority for alternative employment in redundancy cases
• The right to request flexible working conditions on return to work
• Protection from dismissal or discrimination by reason of pregnancy or maternity

Shared Parental Leave

Shared parental leave effectively allows parents to share the statutory maternity leave and pay that is available to mothers (and allows adoptive parents to share the adoption leave and pay available to the primary adopter).

Basic concepts

Expected week of childbirth (EWC)

The EWC is the week, measured from Sunday to Saturday, in which childbirth is expected to occur. It will be confirmed on a certificate (MAT B1) given to the employee by her doctor or midwife. Many of the employee's rights are calculated by reference to her EWC, regardless of whether birth in fact

• ccurs earlier or later.

Compulsory maternity leave

All employees must take a minimum of two weeks' maternity leave starting with the day on which childbirth occurs. This is extended to four weeks for factory workers. An employer will be guilty of a criminal offence if it allows an employee to work during compulsory maternity leave.

Basic concepts

Additional maternity leave

AML follows immediately after the end of OML and lasts for up to a further 26 weeks, giving a total entitlement of 52 weeks' statutory maternity leave, and is also available to all employees regardless

• f their length of service.

Ordinary maternity leave

OML is a period of 26 weeks' leave available to all employees, regardless of length of service, who give birth and comply with the notification conditions. It applies only to employees, whether they are full time

• r part-time, fixed-term or permanent, and is not available to the self-employed or those who come

within the statutory definition of worker.

Notifying the employer

For maternity leave purposes, a pregnant employee is not required to inform her employer of her pregnancy until the 15th week before the EWC. However, she will not be able to benefit from rights such as the entitlement to paid time off for antenatal care, risk assessments and the statutory protection on account of her pregnancy from discrimination or dismissal until her employer is made aware that she is pregnant. To qualify for OML, an employee must comply with the notification provisions. These are that she must notify her employer no later than the end of the 15th week before the EWC (or, if that is not reasonably practicable, as soon as is reasonably practicable) of:

• The fact that she is pregnant.
• The EWC.
• The date when she intends her OML to start, which must be a date no earlier than the beginning
• f the 11th week before the EWC.

Statutory maternity pay

An employee will be entitled to statutory maternity pay (SMP) where she has both:

• 26 weeks' continuous employment with the employer up to and including the 15th week before

the EWC.

• Average earnings of at least the lower earnings limit for National Insurance during the eight-week

period ending with the 15th week before EWC. SMP is payable for 39 weeks at the following rates:

• The "earnings-related rate" (90% of average earnings) for the first six weeks.
• The "prescribed rate" (or earnings-related rate if lower) for the remainder of the period.

A woman who does not qualify for SMP may qualify for maternity allowance or other social security payments.

Maternity Cover - What should be considered

When an employer needs to recruit someone temporarily to cover the work of an employee absent

• n maternity leave, it is vital that:
• 1. the job offer and contract are in writing.
• 2. that the employer makes it clear that the role is temporary, for a fixed term and to cover maternity

leave.

• 3. the fixed-term employee’s terms of appointment should be no less favourable than those offered
• n a permanent basis.

Main issues an employer will need to consider

All employers should ensure when taking on maternity cover that contracts are drafted correctly so that there are no issues on termination. Employers need to be particularly wary if they are asking existing employees to “act up” ie covering the maternity position before returning to their previous role. If this is not handled correctly from the start, it may lead to problems later on.

Key legislation- s95(1)(b) of the ERA

• The end of a fixed term contract counts as a dismissal (s95 (1) (b) Employment Rights Act 1996)
• However, if it is a new employee, it is unlikely they will have the minimum 2 years services to

have protection from Unfair Dismissal.

• It is still best practice to ensure all employees are given notice in the correct manner.
• In any event, where it can be shown that a fixed-term contract
• was adopted for a specific and genuine purpose (ie Maternity cover)
• that purpose was known to the employee and the purpose for which the contract was

adopted has ceased to be applicable Then there is Some other Substantial Reason (SOSR) for dismissal, which is a potentially fair reason.

Key Legislation – s106 Employment Rights Act

• s106 2(a) of the Employment rights Act requires that Employers are clear that the position

being hired for is maternity:

• ‘on engaging him the employer informs him in writing that his employment will be terminated
• n the resumption of work by another employee who is, or will be, absent wholly or partly

because of pregnancy or childbirth, or on adoption leave or shared parental leave’

• The Employer must also be clear that when ending the arrangement they are dismissing the

cover employee ‘in order to make it possible to give work to the other employee’ ie the employee on Maternity leave (s106 2(b) ERA).

• In practice, any maternity cover contract should clearly state this. The following wording could

be used ‘Your employment as maternity leave cover shall commence on X date and shall continue, subject to the remaining terms of this agreement, until it terminates when Employee Y returns to work. We will give you X notice of this date;

Acting up – what needs to be done

• s4 of the Employment Rights Act requires all employers to give a written statement to

their employees if the terms of their contract are changing.

• If hiring an existing employee to cover a period of maternity leave, it is best to issue

them with a formal letter outlining any variation to their contract for the period of maternity leave.

• This ensures there is clarity and means there are less likely to be disputes.
• Practically speaking, an end date should not be given, as the date the maternity period

ends could be subject to change.

• Instead, a provision for notice should be included that notice will be given, once the

employee on maternity leave signals their intent to return, as they must give at least 8 weeks notice.

Unconscious bias

Post Termination Restrictions

Why impose Post Termination Restrictions?

• Employees are often well-placed to take advantage of confidential information,

strategic plans, customer and client details or other information about their employer’s business, after the termination of their employment.

• They may attempt to use this information for the benefit of their new employer, or in
• rder to set up a rival business

Common types of Post Termination Restrictions

Some of the most common types of Post Termination Restrictions include:

• Non-Solicitation Clause – A non-solicitation clause is to prevent an ex-employee from approaching

any of their former employers’ clients or potential clients.

• Non-Dealing Clause – A non-dealing clause is more rigid than a Non-Solicitation clause, as it will

prevent the employee from dealing with the employers’ clients even if it is the client who approaches the employee.

• Non-Compete Clause – A non-compete clause is to prevent the employee from working for a

competitor in a similar role and also from setting up a competing business.

• Non-Poaching Clause – A non-poaching clause is to prevent the employee from taking any key

employees with them to their new employment or business.

What are the benefits of the Post Termination Restrictions?

• Can limit the employee’s conduct and prevent them from damaging the former employer’s

business.

• May deter employees from joining competitors.
• Might deter potential new employers, who face the risk that the restrictions will be

enforced by the courts.

Key Principals

When enforcing, the court must consider the doctrine of restraint of trade. Any contractual term restricting an employee’s activities after termination is void for being in restraint of trade and contrary to public policy, unless the employer can show that:

• It has a legitimate proprietary interest that it is appropriate to protect.
• The protection sought is no more than is reasonable having regard to the interests of the

parties and the public interest.

How are they enforced?

• Post-termination restrictions are usually enforced by an injunction.
• Ultimately, it will depend on what the court regards as being fair in the circumstances as

to whether they will enforce the restrictions and each case will turn on their own facts.

Enforcement – What does the Court consider?

When deciding if a post termination restriction should be enforced the court will look at the following key principles:

• Reasonableness. Post-termination restraints are enforceable if they are reasonable, having

regard to the interests of the parties and the public interest. The question of reasonableness has to be considered at the point when the covenant was entered into, not in the light of subsequent events. Legitimate interest. To be enforceable, a restrictive covenant must be designed to protect a legitimate proprietary interest of the employer for which the restraint is reasonably necessary. Legitimate interests include an employer's trade connections with customers or suppliers, confidential information and maintaining the stability of the workforce. Special treatment for employment covenants. Restrictive covenants in employment contracts are generally viewed more strictly than those in commercial contracts, such as those between a seller and a buyer. They are usually less likely to be regarded as reasonable, because of the inequality of bargaining positions between employer and employee.

Enforcement – What does the Court consider?

Preventing competition must not be an end in itself. Restrictive covenants having the sole aim of preventing competition are never upheld by the court. A non-competition restriction must be designed to protect the employer's confidential information, trade secrets or customer connections, and prevent the employee from

• btaining an unfair advantage by exploiting these for their own, or another employer's,

benefit. For this reason, non-solicitation clauses are therefore looked on more favourably than pure non-competition clauses. Restrictions must be no wider than necessary - if a restriction is too widely drafted it is likely to be seen as unreasonable. For example, a worldwide geographical restriction would be seen as unreasonable, if all of the individuals work related to the UK market only.

To determine what rights may require protection, the employer must look at the nature of its business and the employee's position in the business. In broad terms, the rights that a court will allow to be protected fall into the following categories:

• Trade connections (with customers, clients or suppliers) and, more generally, goodwill.
• Trade secrets and other confidential information.
• Stability of the workforce.

When drafting, it is often advisable to set out the legitimate interest which you are looking to

• protect. If this is included, it is more likely the clause will be enforceable

Legitimate Interests

Enforcement – What does the Court consider?

Trade Connections

• An employer is entitled to protect its relationships with its customers, clients and other

trade connections.

• This is because the courts recognise that employees build up close relationships with

customers, and gain their trust.

• Therefore there is a risk they may then seek to take advantage of these relationships in a

subsequent role, even though the trade connections belong to the employer.

• If the customer, client or supplier want to continue dealing with their familiar contact, and

seek to follow them without any encouragement or solicitation by the employee, this can be protected by means of a non-solicitation or non-dealing covenant.

• In every case, the protection must be no wider than reasonably necessary to protect the

legitimate interest.

Trade Secrets and Confidential Information

• Most employment contracts will contain restrictions on using or disclosing confidential

information after termination. However, the courts have recognised that this may not provide adequate protection in itself, and that a covenant curbing the employee's ability to work for a competitor may be the only practical way of safeguarding the information.

• An employer can therefore legitimately use restrictive covenants to protect its confidential

information from being used for the benefit of a competitor. However, the employer must be able to demonstrate that the information is genuinely confidential information, or amounts to a trade secret.

• In particular, an employer should distinguish between confidential information that may

be regarded as the employer's property, and skills, experience and know-how that an employee has acquired during the course of employment.

• The courts will not prevent an employee from using this kind of information, even though

it may be useful to a competitor (FSS Travel & Leisure Systems Ltd v Johnson and another [1997] EWCA Civ 2759).

Stability of the Workforce

• The Courts recognise that employers have a legitimate interest in maintaining a stable,

trained workforce, and that this may warrant protection through restrictive covenants.

• Where a departing employee encourages others to join them in moving to a competitor

(often known as a team move), this can exacerbate the damage done to the employer.

• Employers can attempt to protect the stability of their workforce by using non-poaching

restrictive covenants

When is a restriction reasonable?

If there is a legitimate interest to protect, the employer should impose a restriction that is no wider than reasonably necessary to protect that interest. This will involve limiting not only the restricted activities themselves, but also the period and (if appropriate) the geographical extent of the restriction. Failure to do so may result in the covenant being treated as void for having too wide a scope. The test of reasonableness requires a balance between the interests of the employer's business (such as goodwill, confidential information, trade secrets and trade connections) and the individual's right to freedom of movement and to earn a living

When is a restriction reasonable? Continued

• It is generally thought that restrictive covenants in employment contracts are more difficult to

enforce than those found in commercial agreements. This is because of the relative inequality of bargaining positions between employer and employee.

• However, the court will take into account the parties' individual circumstances. Factors that are

relevant include the employee's seniority, status and the fact that they were involved in negotiating the wording of the covenants at the time they entered into them.

• Generally, the more senior the employee, the easier it will be for the employer to enforce a more
• nerous restriction. For example, in Thomas v Farr plc and another [2007] EWCA Civ 118, the

Court of Appeal upheld a 12 month non-compete restriction in a managing director's contract. It was relevant that, as managing director, the defendant employee was privy to all major and strategic operational decisions made by the employer and had overall responsibility for all of the company's existing business

When is a restriction reasonable?

• Salary: This is not a relevant factor
• In Norbrook Laboratories (GB) Ltd v Adair and another [2008] EWHC 978 (QB) the defendant

employee attempted to argue that a one year non-competition restriction was unreasonable, given her relatively modest salary level (£25,000 a year). The court disagreed and said that there was no reason to give her salary level any particular significance in determining the reasonableness of post-termination restrictions.

In summary….

• Reasonableness is assessed on a case-by-case basis
• In order to be reasonable, covenants should be tailored to the specific employee and the

business in which they operate. When drafting restrictive covenants, the employer should look at each employee and determine what level of protection is reasonably necessary in each case. What is appropriate for one individual may not be appropriate for another.

• For example, a senior employee may have more involvement in, and knowledge of, the

employer's affairs than a low-ranking employee; or two employees on the same level may have differing influences over the customers and have varying knowledge of confidential information.

• The fact that the employer distinguishes between two employees on the same level may help to

persuade the court that it has genuinely and reasonably sought to protect its interests.

For further information please contact Hina Belitz on: Call us: 020 7374 6546 / 07809694400 Email us: hina@partnerslaw.co.uk Like us: www.facebook.com/EmploymentLawyersLondon Tweet us: @Hinalegal Link us: www.linkedin.com/pub/hina-belitz/13/7aa/b60 Website – www.partnerslaw.co.uk

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