Case round-up

This week’s legal case round-up

Finding new employment
Tibbett & Britten UK Ltd v Burke, EAT, 27 November 2002, All ER (D)

Employers can take some comfort from the employment appeal tribunal’s (EAT)
approach to assessing compensation for unfair dismissal in this case.

Burke, 57, resigned from his job with Tibbett & Britten and successfully
claimed constructive dismissal. Since leaving his job, Burke had found new
employment via an agency, but it paid less.

In calculating his ongoing loss, the tribunal concluded that Burke would
have remained in Tibbett & Britten’s employment until retirement at the age
of 65, and took account of the difference in pay between his former and current
employment in awarding £54,836 compensation. Tibbett & Britten successfully
appealed to the EAT.

The EAT held there had to be a finding, and an allowance, if appropriate, in
respect of whether Burke, having found relatively less well paid employment,
would have been able to secure a better job on more favourable terms at some
stage in the future, notwithstanding his age. Furthermore, the tribunal had
been wrong in making no discount for accelerated payment – it failed to take
account of the fact that Burke would have received future years’ salary as a
lump sum payment up front.

Restricting employees in the future
Arbuthnot Fund Managers Ltd v Nigel Rawlings, CA, 13 March 2003, All ER
(D) 181

– This case should serve as a reminder to employers to check that
restrictive covenants in employees’ contracts are appropriately drafted.
Rawlings was employed as an executive director by a company engaged in fund
management and investment for private clients, trusts and charities.

After Rawlings left his employment, the company issued proceedings seeking
to enforce the restrictive covenants in his service agreement which prevented
him from:

– Soliciting or dealing with any person, firm or company who had, within the
12 months prior to termination, done business with the company

– Soliciting or dealing with anybody who was a prospective client of the
company in the six months prior to termination

An interim injunction was granted which restrained Rawlings from acting in
breach of the restrictive covenants until the matter could be heard at a full

Rawlings appealed on the grounds that the restraint terms were too wide and
his appeal was successful in part. The Court of Appeal held that the terms of
the restraint clauses in the service agreement (as reflected in the interim
injunction), were too wide.

In particular, the use of the words "any person, firm or company"
could be interpreted as meaning any person who was a client or prospective
client of the company. It could not have been intended to include all persons
with whom the company had or was to have dealings, rather only those persons
who were investment clients.

The interim injunction was amended to restrain Rawlings from soliciting or
dealing with any client who had carried out investment business with the
company at any time during the 12 months leading up to termination.

Comments are closed.