Key employment law cases: January 2021

Lack of interim relief for discrimination cases could be incompatible with ECHR

Steer v Stormsure - Employment Appeal Tribunal (21 December 2020)

The EAT has held that the absence of an interim relief remedy in discrimination cases appeared to be incompatible with the European Convention of Human Rights (ECHR) and has granted leave to appeal to the Court of Appeal to consider the issue.      

Ms Steer presented a claim in the Tribunal in which she alleged that she was dismissed by Stormsure and that the dismissal amounted to sex discrimination and/or victimisation. As part of her claim Ms Steer applied for the remedy of interim relief.  Interim relief applies where a claimant is complaining about being dismissed. If the claimant is successful in their application, the Tribunal will make an order that the claimant's employment contract continue for the purpose of their salary and other benefits until their claim is decided. This is of real benefit to claimants, who then have the financial cushion of their usual pay and benefits whilst they wait for their claim to be heard.

Interim relief is available as a remedy in whistleblowing retaliation cases, but not in discrimination cases. Ms Steer's application in the Tribunal was therefore rejected as they did not have jurisdiction to hear it. Ms Steer appealed the decision on the basis that, under the principles of under EU law (in particular, the principles of effectiveness and equivalence) there must be effective remedies for breaches of the right not to be discriminated against and that an EU right cannot be afforded less favourable remedies than an equivalent domestic right. The EAT took the view that the difference in treatment between employees who seek to bring claims for discrimination arising from dismissal and those who seek to claims for dismissal for whistleblowing was in breach of the ECHR.

The EAT granted Ms Steer leave to appeal to the Court of Appeal, so that it can consider whether to grant a declaration of incompatibility with the ECHR. If a declaration is granted, this may result in conforming amendments to UK equality law (there has, to date, never been an outright refusal by any government to act in response to any declaration of incompatibility). If interim relief were to become available for discrimination claims this would be a landmark development in UK employment law.

Financial adviser's restrictive covenants deemed void after leaving during probation period

Quilter Private Client Advisers Ltd v Falconer and anor  - High Court (04 December 2020)

The High Court has ruled that a nine-month non-compete and 12-month non-dealing and non-solicitation restrictions in a financial adviser's employment contract were unenforceable as unlawful restraints of trade.

Ms Falconer, a financial adviser, was employed by Quilter to take over a book of clients from a departing employee. However, she was unhappy in the role and left after six months (and within her probation period on two weeks' notice) to join a competitor, Continuum. She took with her confidential client information and sought to engage those clients in her new role.

In the interim, the High Court granted an injunction to enforce the restrictive covenants in her contract and to restrain further breaches of confidentiality. At full trial, whilst the Court upheld Quilter's claims of breach of contract (namely, misuse of confidential information), it held that the restrictive covenants were void for the reasons below:

• The non-compete clause was UK-wide despite the fact that Ms Falconer only covered clients in one region. She had only been employed such a short period of time (6 months) and was still within her probation period and had a short 2-week notice period. Quilter appeared to have taken a one size fits all approach as other more senior employees were subject to the same restraints. Further, Quilter could not provide any substantive evidence that a non-dealing covenant would not have sufficed.

• The non-dealing and non-solicitation restrictions applied to anyone who had been a client of Quilter at any time within 18 months prior to Ms Falconer leaving and with whom she had had any personal contact. This prevented her from dealing with anyone that she had had very minimal (or even no) contact with (e.g. where the client was included in the book of clients that she took over).

The case is a good reminder of the importance of tailoring restrictive covenants appropriately, but importantly that a short notice period (particularly during a probation period) may impact the enforceability of covenants.

Litigant permitted to refer to without prejudice material to argue COT3 was invalid

Cole v Elders' Voice - Employment Appeal Tribunal (26 November 2020)

The EAT has confirmed that a litigant in person who had argued in front of the ET (in a preliminary hearing) that a COT3 could not be relied on because of misrepresentation and estoppel should have been permitted to refer to without prejudice material in support of her submissions.

Mrs Cole was originally employed by Sanctuary housing association. Her employment transferred to Elders' Voice via TUPE on 1 September 2017. She was placed at risk of redundancy and engaged in settlement negotiations. In October 2017, she brought claims for unfair dismissal and race discrimination against Sanctuary (the transferor). During negotiations over the COT3, Mrs Cole's representative (who happened to be a disbarred barrister) seemed not to understand that TUPE operated to transfer the liability for Mrs Cole's claims against Sanctuary to Elders' Voice. Elders' Voice did not correct this misunderstanding and appeared to confirm that the COT3 would not prejudice her claims. The COT3 was signed in December 2017.

When Elders' Voice was later added as a second respondent, it argued that the tribunal had no jurisdiction to hear her claims because of the COT3. Mrs Cole, now representing herself, argued that Elders' Voice had made misrepresentations about the effect of the COT3 and made estoppel arguments. She argued that this was evidenced in the WP negotiations, but the tribunal refused to permit her to refer to this. Mrs Cole appealed to the EAT.

The EAT allowed the appeal. It confirmed that a COT3 could be challenged on the same basis as any other contract in common law or equity (and case law in the commercial arena). Once Mrs Cole had raised arguments of misrepresentation and estoppel, she should have been permitted to refer to without prejudice materials in support of those arguments. The case was remitted to a differently constituted tribunal for rehearing.

Agency workers are not entitled to apply for vacancies on same terms as direct hires

Angard Staffing Solutions Ltd & anor v Kocur & anor - Employment Appeal Tribunal - (11 December 2020)

Agency workers do not have a right to apply for and be considered for internal vacancies on the same terms as directly-recruited employees.

In this case, the claimants were employed as agency workers by Angard, an employment agency and a wholly-owned subsidiary of Royal Mail. Angard provides agency workers to Royal Mail (only) to assist with fluctuations in demand for postal workers. The claimants worked in Royal Mail's Leeds Mail Centre. They were given regular work there and attained the 12 weeks' qualifying service required for an agency worker to qualify for the rights in relation to the basic working and employment conditions set out in reg 5 of the Agency Workers Regulations 2010 (AWR 2010).

The claimants brought employment tribunal proceedings alleging various breaches of their rights under the AWR 2010, and in particular that they were prevented from applying for vacancies unless advertised externally. Royal Mail Group made the claimants aware of vacancies but also made it clear to them that the vacancies advertised for internal candidates were only open to directly-recruited employees. Agency workers were only eligible to apply for roles which were open also to external candidates.

Whilst the claimants succeeded before the employment tribunal, the EAT found that the right was limited to being notified of the vacancies and having the same information about them as directly-recruited employees. Agency workers do not have a right to apply for and be considered for internal vacancies on the same terms as directly-recruited employees.

The case offers a reminder that there is no overarching principle of equal treatment between agency workers and comparable employees generally, recognising that agency workers fulfil a different requirement to a hirer's permanent workforce.

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