Contracts of employment
In Murray v Leisureplay plc, the Court of Appeal holds that a clause in a director's service agreement that provided for one year's salary and other benefits to be paid on termination of the contract by the employer, was held not to be unenforceable as a penalty, as it was justifiable on commercial grounds.
Sally Logan, associate at Addleshaw Goddard, brings you a comprehensive update on the latest decisions that could affect your organisation, and provides advice on what to do about them.
In Forshaw and others v Archcraft Ltd, the EAT holds that the employment tribunal erred in holding that a dismissal for refusing to sign a contract of employment that contained an unreasonable restraint of trade clause was for "some other substantial reason".
This week's case round-up from Eversheds, covering unfair dismissal.
In Four Seasons Healthcare Ltd v Maughan, the EAT holds that frustration of a contract of employment requires some outside event or extraneous change of situation not foreseen by or provided for by the contract. The existence of a detailed disciplinary procedure specifically dealing with patient abuse should inhibit a tribunal from finding frustration.
In Webley v Department for Work and Pensions, the Court of Appeal holds that an employer's practice of refusing to renew fixed-term employment contracts once 51 weeks of service had elapsed was not unlawful under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002.
In Candler v ICL Systems Services IDS Brief 562 EAT, the Employment Appeal Tribunal held that, although scheduled telephone standby duties could be terminated by giving four weeks' notice, the only power to vary them was the general power to vary, which required 26 weeks' notice.
In Coutts & Co plc v Cure; Royal Bank of Scotland v Fraser, the EAT holds that, in a case where an employer refused to pay a non-contractual bonus to all non-permanent employees, including some fixed-term workers, the tribunal did not err in law by holding that the reason for the less favourable treatment was on the ground of the employees' status as fixed-term workers.
In Horkulak v Cantor Fitzgerald International [2004] IRLR 942 CA, the Court of Appeal held that, even where the employment contract states that payment of a bonus is discretionary, the employer is under an implied duty to exercise that discretion genuinely and rationally, and a wrongfully dismissed employee could recover damages that reflect the bonus payments that he could have expected to receive had he remained in employment.
In Allen v National Australia Group Europe Ltd, the EAT holds that the tribunal was wrong to decline jurisdiction to hear a claim under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002.
Employment law cases: HR and legal information and guidance relating to contracts of employment.