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Employees not under duty to disclose intention to compete 9 June 2017
Are employees under a duty to disclose their intention to compete?
Probably not, held the Chancery Division in MPT Group v Peel .
Two moderately senior employees planned to set up a new company in competition with their employer after their restrictive covenants expired.
When questioned by their employer (after handing in their resignation) they lied about their intentions. The employer sought an injunction based misuse of confidential information, and also upon breach of the duty to answer questions truthfully. The judge held that whilst there was a general duty to answer questions truthfully, he was "reluctant to hold" that a departing employee is under a contractual obligation to explain his own confidential plans to set up in lawful competition - see para 86 of the judgment.
Although the court did not need to consider this, it might have reached a different conclusion if the employees were sufficiently senior to owe fiduciary duties to their employer.
With thanks to Daniel Barnett’s employment law bulletin for providing this update.
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Holiday pay implications for 'gig economy' workers 20 June 2017
An opinion by an Advocate General (AG) of the European Court of Justice (ECJ) on holiday pay could have implications for 'gig economy' workers.
With thanks to Pinsent Masons for the following report:
Mr King (K) worked as a salesman for Sash Window Workshop Limited (SWWL), and was paid commission. He received no paid leave on the basis that he was considered to be self-employed. When he was finally let go at age 65, after 13 years’ service, he made a claim to ET, including a claim for unlawful deductions of wages in relation to unpaid holiday pay for the entirety of his service.
The ET found that he was a worker and as such was entitled to holiday pay. The Court of Appeal referred the case to the ECJ asking for a ruling on several issues, and the AG has now issued his opinion:
If a worker does not take some or all of his holiday entitlement in the applicable leave year - because he is prevented from taking leave (e.g. as Mr King was because the leave would not have been paid), the right carries over until he has the opportunity to exercise it; the worker does not first have to take leave to be able to establish he is entitled to be paid for it (in circumstances where he is prevented from taking the leave); and upon termination of the relationship, a worker is entitled to an allowance in lieu of paid leave that has not been taken. A limit of 18 months is not compatible with Article 7 of Directive 2003/88.
Pinsent Masons comment:
The Chartered Institute of Payroll Professionals
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